1. Financial Parenting During Young Adulthood: Waning Power, Staying Power, or Changing Power? Joyce Serido, Jaime Ballard, Veronica Deenanath, Soyeon Shim Financial Parenting During Young Adulthood: Waning Power, Staying Power, or Changing Power? Joyce Serido, Jaime Ballard, Veronica Deenanath, Soyeon Shim Using OLS hierarchical regression, we created three models to assess the influence of financial parenting on life satisfaction, financial satisfaction, and financial behaviors. Findings & Implications At each wave of the study, concurrent financial parenting influenced young adults’ financial behavior and financial satisfaction, although the size of the effect diminished over time and the effect did not carry over from one wave to the next. Early financial parenting directly influenced life satisfaction in the first year of college and the effect carried over into the fourth year of college but disappeared by wave 3. As children mature, there is an ongoing shift in the relationship, from adolescent dependence to a more egalitarian peer-like relationship (Shanahan, 2000). Although parents may continue to provide financial support to young adult children, the influence exerted on their children’s financial practices comes from ongoing involvement. Because financial responsibilities change as young adults assume greater personal responsibility for their financial and life choices, parents who stay engaged have the opportunity to coach their children through the challenges they face as they transition to full-time adult roles. At each wave of the study, concurrent financial parenting influenced young adults’ financial behavior and financial satisfaction, although the size of the effect diminished over time and the effect did not carry over from one wave to the next. Early financial parenting directly influenced life satisfaction in the first year of college and the effect carried over into the fourth year of college but disappeared by wave 3. As children mature, there is an ongoing shift in the relationship, from adolescent dependence to a more egalitarian peer-like relationship (Shanahan, 2000). Although parents may continue to provide financial support to young adult children, the influence exerted on their children’s financial practices comes from ongoing involvement. Because financial responsibilities change as young adults assume greater personal responsibility for their financial and life choices, parents who stay engaged have the opportunity to coach their children through the challenges they face as they transition to full-time adult roles. Family Social Science The present study considers how the impact of financial parenting changes over time. Using data from a longitudinal panel study of young adults (N=977), the present study examines the associations between financial parenting and young adults' financial satisfaction, financial behavior and life satisfaction. The findings of the study suggest that concurrent (within wave) financial parenting (communication, modeling, explicit teaching, and monitoring) plays a significant role in young adults’ positive financial and life outcomes. Abstract During childhood and adolescence, parents are the primary source of financial education for their children (Danes & Haberman, 2007; Webley & Nyhus, 2006). Financial parenting during childhood is associated with more responsible financial behaviors in college (Grinstein-Weiss et al., 2011). However, little is known about the associations between financial parenting and children’s financial and life outcomes as they transition to adulthood. Young adulthood is marked by many financial decisions with long-term ramifications (Xiao, Shim, Barber, & Lyons, 2007), yet many American young adults lack the financial knowledge, attitudes, and skills to make sound decisions (FINRA, 2009). Because parents continue to provide financial support to their young adult children (FINRA, 2013; Pew, 2012; Schoeni & Ross, 2005), parents may have an ongoing opportunity to influence young adult’s financial behaviors and well-being. During childhood and adolescence, parents are the primary source of financial education for their children (Danes & Haberman, 2007; Webley & Nyhus, 2006). Financial parenting during childhood is associated with more responsible financial behaviors in college (Grinstein-Weiss et al., 2011). However, little is known about the associations between financial parenting and children’s financial and life outcomes as they transition to adulthood. Young adulthood is marked by many financial decisions with long-term ramifications (Xiao, Shim, Barber, & Lyons, 2007), yet many American young adults lack the financial knowledge, attitudes, and skills to make sound decisions (FINRA, 2009). Because parents continue to provide financial support to their young adult children (FINRA, 2013; Pew, 2012; Schoeni & Ross, 2005), parents may have an ongoing opportunity to influence young adult’s financial behaviors and well-being. Background Study Design and Sample We used web-based survey data from a three-wave longitudinal study of young adults’ financial behaviors (N=977). Baseline data at Wave 1 (W1) was collected from first year college students (ages 18-21) during spring 2008. Wave 2 data (W2) was collected in fall 2010 in fourth year of college (ages 21-24). Wave 3 data (W3) was collected in 2013 (ages 24-27) when the majority completed college. The majority of the participants were women (64.2%). Sixty-eight percent were White, 14.9% Hispanic, 10.2% Asian/Pacific Islander, 4.6% Native American or other, and 2.7% African American. Forty-two percent of participants were from lower-income families (annual income $150K). Measures Financial parenting measured the extent to which participants agreed (1=strongly disagree, 5=strongly agree) with thirteen statements about parents’ financial socialization (e.g., parents are role models for managing money) (α at W1, W2, W3 =.81,.85,.85). Financial satisfaction measured the extent to which participants agreed (1=strongly disagree, 5=strongly agree) with three items (e.g., I am constantly worried about money, reversed) (α=.84,.81,.82). Life satisfaction measured the extent to which participants agreed (1=strongly disagree, 5=strongly agree) with five items (e.g., in most ways, my life is close to my ideal) (α=.86,.85,.90). Financial Behaviors measured how often (1=never; 5=very often) participants engaged in eight financial management tasks (e.g., track monthly expenses, save money each month) (α=.79,.80,.79). Control variables included sex, ethnicity, and parental SES. Study Design and Sample We used web-based survey data from a three-wave longitudinal study of young adults’ financial behaviors (N=977). Baseline data at Wave 1 (W1) was collected from first year college students (ages 18-21) during spring 2008. Wave 2 data (W2) was collected in fall 2010 in fourth year of college (ages 21-24). Wave 3 data (W3) was collected in 2013 (ages 24-27) when the majority completed college. The majority of the participants were women (64.2%). Sixty-eight percent were White, 14.9% Hispanic, 10.2% Asian/Pacific Islander, 4.6% Native American or other, and 2.7% African American. Forty-two percent of participants were from lower-income families (annual income $150K). Measures Financial parenting measured the extent to which participants agreed (1=strongly disagree, 5=strongly agree) with thirteen statements about parents’ financial socialization (e.g., parents are role models for managing money) (α at W1, W2, W3 =.81,.85,.85). Financial satisfaction measured the extent to which participants agreed (1=strongly disagree, 5=strongly agree) with three items (e.g., I am constantly worried about money, reversed) (α=.84,.81,.82). Life satisfaction measured the extent to which participants agreed (1=strongly disagree, 5=strongly agree) with five items (e.g., in most ways, my life is close to my ideal) (α=.86,.85,.90). Financial Behaviors measured how often (1=never; 5=very often) participants engaged in eight financial management tasks (e.g., track monthly expenses, save money each month) (α=.79,.80,.79). Control variables included sex, ethnicity, and parental SES. The present study In examining the impact of financial parenting during the transition to adulthood, we pose the following research questions: Research Question 1: How does financial parenting influence young adults’ financial behaviors, financial satisfaction, and life satisfaction? Research Question 2: Is the influence of financial parenting on young adults’ financial behaviors, financial satisfaction, and life satisfaction long-lasting? In examining the impact of financial parenting during the transition to adulthood, we pose the following research questions: Research Question 1: How does financial parenting influence young adults’ financial behaviors, financial satisfaction, and life satisfaction? Research Question 2: Is the influence of financial parenting on young adults’ financial behaviors, financial satisfaction, and life satisfaction long-lasting? The authors wish to thank the National Endowment for Financial Education (NEFE), the Citi Foundation and the Take Charge America Institute at the University of Arizona for funding data collection, and the participants for their effort. Results Note. Only significant pathways are displayed in this figure. Results Life SatisfactionFinancial SatisfactionFinancial Behaviors PredictorW1βW2βW3βW1βW2βW3βW1βW2βW3β Biological sex0.020.050.02-.08**-.12*** -0.05-0.02-0.01 SES.09**0.030.05.19***.17***0.05-0.03-0.05-0.02 Ethnicity.14***.13***.11**0.0200.06 -0.030.004 W1 Fin. Parenting.27***.09*0.08.30***-0.03-0.01.23***-0.060.03 W2 Fin. Parenting.16***0.02.29***0.09.24***0.08 W3 Fin. Parenting 0.05.13**.12* Total R 2 0.090.080.030.160.130.060.050.040.03 Method Acknowledgements.092* W1 Financial Satisfaction W1 Life Satisfaction W1 Financial Behaviors W1 Parenting.304***.269***.234*** W2Financial Satisfaction W2 Life Satisfaction W2 Financial Behaviors W2 Parenting.289***.162***.239*** W3 Financial Satisfaction W3 Financial Behaviors W3 Parenting.133**.120*