Navigating Rough Economic Terrain: RESEARCH ON THE FINANCIAL BEHAVIORS OF YOUNG ADULTS Joyce Serido,...

Navigating Rough Economic Terrain: RESEARCH ON THE FINANCIAL BEHAVIORS OF YOUNG

ADULTS

Joyce Serido, PhD, MBATake Charge America Institute

University of ArizonaOctober 21, 2013

Funding for this study provided by the National Endowment for Financial Education (NEFE) and the Citi Foundation

Copyright @ Take Charge America Institute 2013

Spoiled Rotten? New Yorker, July 2012

Huffington Post, December 11, 2011

OR

• Where do financial behaviors come from?• Do financial behaviors change?• What promotes financial capability among

young adults?

Today’s Agenda


ARIZONA PATHWAYS TO LIFE SUCCESS FOR UNIVERSITY STUDENTS (APLUS)

Project Synopsis


Project Recap


In The Transition To College:

• Early financial socialization strengthens college students’ financial behaviors.

• When it comes to financial behavior and well-being, parental communication and expectations matter more than parental finances.


Financial Parenting

• Ways parents make a difference– Directly and explicitly teach financial behaviors– Model positive behaviors– Expect responsible behaviors– Cultivate positive adult relationships


Financial Education

• Formal and Informal Instruction- Reinforces parents’ teaching - Extends understanding of financial topics

• Part-Time Paid Employment- Makes financial management relevant- Provides money-management experience


WHAT CHANGES FINANCIAL BEHAVIOR?

Young Adults’ Financial Behavior


Faced With Changing Financial Demands

• The financial behaviors of many young adults are reactive rather than proactive

• Those who practice proactive financial behaviors, feel better now and in the future


As They Prepare To Graduate• Significant changes in financial knowledge and skills

• Changes in knowledge changes in self-awareness changes in behavior changes in well-being– The changes are not uniform

• Taken together, the changes suggest a dynamic process of emerging financial capability


12

Is it STILL worth it?

WHAT WORKS?Effective Techniques


Promoting Financial Capability of Youth

• Communicating

• Modeling

• Direct teaching

• Setting clear expectations


Communicate = Dialogue

Most effective “teaching strategy”• Listen for the pressure points

• Offer specific/concrete advice


Modeling

The 60/40 Reading Literacy Rule Applies

• Introduce strategies for coping with common financial problems

• Show them how to dialogue about financial matters

• Be a mentor - not an expert


Direct Teaching

The eight-minute lesson:• Lather

• Rinse

• Repeat

Individual understanding is evolving: Each lesson is a seed for the next lesson, class, seminar, workshop


Set Clear Expectations

Financial capability is a life course - not a financial class

• Embed interventions in day-to-day context

• Provide practice in making complex decisions


Questions?

Arizona Pathways to Life Success for University Students (APLUS): Examining the connections between financial behavior and well-being

http://aplus.arizona.edu

http://aplus.arizona.edu/

http://aplus.arizona.edu/

Navigating Rough Economic Terrain: RESEARCH ON THE FINANCIAL BEHAVIORS OF YOUNG ADULTS Joyce Serido,...

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