During the Transition to College



College marks the beginning of a developmental period characterized by several life-changing experiences.  Mounting academic demands, in an atmosphere of independence and flexibility, present a challenge to many first year students.  

It is a time for making new friendships and developing social connections through classes, student activities, and programs, which are essential components of a successful undergraduate experience. It is also a formative time for making independent financial decisions and establishing financial behaviors that will stay with them into their adult lives.


Key Study Findings:

Early financial socialization strengthens college students’ financial behaviors.  Parents, work experience and formal financial education in high school increase college students’ financial knowledge. Direct teaching by parents has the most influence—more than work experience and high school financial education combined.

Parents’ expectations and students’ attitude minimize college students’ use of risky financial behaviors.  Students’ positive attitudes towards responsible financial behaviors are the most potent indicators of the behaviors they practice. Parental expectations play a role in reducing risky borrowing behavior.    

Parental involvement matters more than parental finances.  When it comes to college students’ financial behavior and well-being, parental communication and expectations matter more than parental finances.

Changing Economic Conditions & Financial Behaviors

Wave 1.5


Changing financial conditions due to individual circumstances (e.g., a new job or tuition increase) or macro-level changes (e.g., recession, weak labor market) require that people modify their attitudes and behaviors.


Key Study Findings:

Financial stress triggers hasty financial decisions with the potential for high future cost. A lack of financial experience coupled with an increase in financial demands leads to increased use of reactive behavior (e.g., cost cutting, borrowing) and decreased use of proactive behavior (e.g., saving, planning).

Practicing proactive financial behaviors have a protective effect. College students who practice proactive financial behaviors are better able to withstand unexpected demands and changing circumstances. The act of saving, rather than the amount saved, is a proactive life strategy for achieving present and future happiness and well-being.

From College to Career

Wave 2


During the college years, young adults have several opportunities to develop the knowledge and skills needed make better financial decisions. In addition to formal classes and seminars, they also practice several routine financial activities (e.g., paying bills, buying groceries).

These experiences build knowledge and prepare young adults for life after college, as they enter the world of full-time adult roles and responsibilities, including career, relationships, and self-sufficiency.


Key Study Findings:

Financial Capability is a life-long process. Financial knowledge, financial self-beliefs, and financial behavior are part of a dynamic process. A change in any of these components triggers change in the others. Financial decision-making begins with knowledge about personal finance and improves with practice, experience and self-reflection.

Positive financial socialization contributes to positive change young adults’ thinking and behavior regarding finances.  Relationships with parents, financial classes, and information from multiple sources contribute to a positive financial attitude, a higher degree of control and efficacy, and, ultimately, more responsible financial decision-making.  

Early financial knowledge plays a small but lasting role in minimizing risky financial behaviors.  Financial knowledge of first year college students, both objective knowledge (e.g., financial content) and subjective knowledge (i.e., personal understanding and relevance of financial topics) reduce risky financial behaviors of fourth-year college students.

Stability, Self-Sufficiency & Financial Capability in Early Adulthood

Wave 3


While some researchers and policy makers question the value of investing in financial education, findings from our study consistently demonstrate its positive benefits.

Financial education lays a foundation for greater financial self-awareness, personal agency, and more responsible financial behaviors during the college and plays a key role in differentiating young adults who thrive after college from those who struggle.


Key Study Findings:

College financial behaviors indicate more successful adult outcomes. The more often young adults practice responsible financial behaviors during college the more likely they are to be self-sufficient after graduating from college, regardless of gender, ethnicity or family socioeconomic status.

By the time they leave college, most young adults are ready for the financial and social responsibilities that come with adult status. Although they have not yet attained financial stability, they are making significant progress towards becoming self-sufficient.