Think your kids aren't listening when you tell them to save their money, or to make wise choices when spending? Think again.
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Recent research from the University of Arizona Norton School of Family and Consumer Sciences, shows early efforts by parents and guardians to instill good monetary habits has a snowball effect and exponentially increases the likelihood that students will seek to further their financial knowledge over time.
The study, Arizona Pathways for Life Success in University Students, also found that young adults in high school and college develop three distinct personalities when it comes to their spending and saving identities: oathfinders, followers and drifters. The most positive financial attitudes and behaviors are linked to pathfinders, or those who actively choose their own financial management style. The study surveyed more than 1,500 current and dropout students over four years after they entered the University of Arizona in Fall 2007.
Soyeon Shim, University of Arizona professor and director of The Norton School of Family and Consumer Sciences, says students that came into the university armed with some financial knowledge or background took the initiative to further deepen that education.
"They were more prone to taking courses in college years and worked more closely with their parents," Shim says. "Financial education may be less relevant to them over time, but the knowledge accumulated can make a difference as they get older. Financial parenting is very important."
The researched shows nearly 31% of young adults are pathfinders and are most engaged in defining their financial style. They also tend to have more positive financial attitudes, feel better about their efficacy and control and report the most positive financial behaviors.
The largest percentage of young adults were determined to be followers with 39% of respondents falling under this label. This group mirrors their parents' financial management behavior, and is most unconcerned about the process of learning about finances.
The research identified 30% of respondents as drifters, or those who are least accepting of their parents' financial management style. Drifters have yet to establish their own approach and their financial behaviors tend to be worse than their peers. Despite that factor, their financial knowledge and awareness are "solidly average," according to the research.
According to Shim, one surprising factor in the research was that students' monetary attitudes deteriorated over time. The older they got, the more negative their outlook became toward finances.
"In the middle of [the study] the market crashed and their financial well being is up and down depending on the economy," she said. "You like students to have a more positive attitude as they get older, but it's going down.
Males also displayed more interest and confidence regarding finances, Shim says. In a financial quiz, men scored higher than women at an average of 72% vs. 68%. Men were also more likely than women to take formal financial education classes (62% vs. 40%) and were also more likely to engage in informal learning about finances (75% vs. 68%).
"During their freshman year, that knowledge was objectively the same," Shim says. "But for their subjective knowledge and subjective confidence, male students are more confident and on a positive trajectory."