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Finances for Emerging Adults: From Cradle to Owning Your Own Crib

Emerging adulthood is a time of change that can influence whether or not young adults become their ideal adult selves.1

This period begins at the age when they leave home for college or other pursuits (about 18 years old) and ends at the age where they have begun a steady job and, possibly, their own family (about 25 to 30 years old).2,3 With an ever-growing body of research that supports the importance of this time in human development, it is beneficial to study and understand the factors that can influence young adults towards becoming the adults they would like to be.4,5

Finances, specifically, play a significant role in our development from our adolescence to adulthood.6 In order to understand this role, Dr. Ashley LeBaron-Black and her colleagues performed two studies that yielded interesting results.

Preparing For Young Adulthood Finances

In the first study, Parental Financial Education During Childhood and Financial Behaviors of Emerging Adults, researchers wanted to determine the effects of learning about finances during childhood on an individual’s financial habits once they had reached emerging adulthood. This study also aimed to see whether there was any difference in how men and women had been taught about finances. If there were differences, the researchers wanted to see how those differences affected the financial behaviors for men and for women in emerging adulthood.

Piggy Bank

To meet the aims of the study, the researchers surveyed 437 emerging adults. The survey asked questions that allowed the researchers to gauge the direct financial teaching from parent to child. For example, the survey asked whether or not a parent explicitly taught the participant about aspects of finances, such as credit cards, debt, and budgeting. The survey also asked questions to discover how often the participants engaged in healthy financial behaviors.

LeBaron-Black and colleagues found that those participants who reported receiving direct financial education from their parents also reported engaging in healthy financial activities more often than those who did not have that education. The researchers also found that if any differences in teaching finances between young men and young women did exist in the sample data, then those differences did not affect the frequency of healthy financial habits of emerging adults.

Improving Emerging Adulthood Finances

In the second study, Financial behaviors, financial satisfaction, and goal attainment among college-educated young adults: A mediating analysis with latent change scores, researchers focused on the period of life where adolescents become emerging adults and take the reins of their own financial wellbeing. Specifically, Dr. Xiaomin Li (lead author), Dr. LeBaron-Black, and their colleagues set out to determine how the financial development of emerging adults affects their ability to achieve the life goals that make up their ideal adult selves.

Some adults, for example, envision their ideal adult selves as having a steady, well-paying job, a house, and a car. To study this aspect of financial development, the researchers needed to see what differences develop over time between emerging adults who begin their emerging adult years by regularly engaging in healthy financial practices compared to those who do not. They also wanted to see whether the participants’ satisfaction level with their own finances had an effect on depressive symptoms and life goal achievement.

Group with a ipad

Li, LeBaron-Black, and their colleagues found that higher initial frequency of healthy financial habits and larger increases in healthy financial habits over time were associated with greater financial satisfaction. Also, higher initial levels of financial satisfaction were linked with lower initial depressive symptoms, lower initial financial obstacles to life goal achievement, and larger decreases over time of financial obstacles. The same outcomes can be said for those that were able to increase their financial satisfaction over time.


Whether you have already achieved the goals that define your ideal adulthood or whether you are still working towards them, these two studies have practical applications to improve your journey. The following are two ways you can act on what has been discovered.

1. Teach your children about finances. The first study made clear the benefits of learning about money from parents and guardians. Whether it involves teaching your children to divide their allowance money into categories (e.g., Save, Spend, and Give) or budgeting as a family (rather than just as parents), teaching children at home seems to give them a better chance at healthily managing finances in emerging adulthood.8 Keep in mind that continued financial instruction into emerging adulthood is also beneficial, but it will likely involve less hands-on instruction as parents. For instance, children may require examples in which you give them play money or allowances and then let them discover the pros and cons of spending and saving that money in various situations. Emerging adults may require advice about spending and saving money that they can then apply to the financial situations they are currently experiencing9,10

2. Invest time in learning and developing healthy financial habits as an emerging adult or as soon as possible. Taking time out of a busy college or work schedule is no easy task, but the sooner emerging adults begin to develop healthy financial habits, the happier they seem to be and the more likely they are to reach their future ideal-self goals. Reaching out to your parents for instruction or taking a personal finance course from a local community group or college are great ways to understand how to manage your money better.11 Also, the university you attend could already have a family/personal finance course available to take. If money management skills are present, but financial satisfaction has not set in, seeking help from a professional counselor to develop a positive perception of your finances can help you see and feel the benefits of your good financial habits. To achieve your life goals, whether they be financial or social, consider utilizing professional assistance: online counseling for individuals and couples can be found here, and online financial counseling can be found here.


1Ebner, N. C., Freund, A. M., & Baltes, P. B. (2006). Developmental changes in personal goal orientation from young to late adulthood: From striving for gains to maintenance and prevention of losses. Psychology and Aging, 21(4), 664–678.

2Tanner, J. L. (2006). Recentering during emerging adulthood: A critical turning point in life span human development. In J. J. Arnett & J. L. Tanner (Eds.), Emerging adults in America: Coming of age in the 21st century (pp. 21–55). APA.

3Côté, J. E.. (2014). The dangerous myth of emerging adulthood: An evidence-based critique of a flawed developmental theory. Applied Developmental Science, 18(4), 177–188.

4Shulman, S., Kalnitzki, E., & Shahar, G. (2009). Meeting developmental challenges during emerging adulthood: The role of personality and social resources. Journal of Adolescent Research, 24(2), 242–267.

5Shulman, S., & Nurmi, J. E. (2010). Understanding emerging adulthood from a goal-setting perspective. New Directions for Child and Adolescent Development, 2010(130), 1–11.

6Sorgente, A., & Lanz, M. (2017). Emerging adults’ financial well-being: A scoping review. Adolescent Research Review, 2(4), 255–292.

7Ranta, M., Dietrich, J., & Salmela-Aro, K. (2014). Career and romantic relationship goals and concerns during emerging adulthood. Emerging Adulthood, 2(1), 17–26.

8Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students. Journal of Youth and Adolescence, 39(12), 1457– 1470.

9Jorgensen, B. L., Foster, D., Jensen, J. F., & Vieira, E. (2017a). Financial attitudes and responsible spending behavior of emerging adults: Does geographic location matter? Journal of Family and Economic Issues, 38(1), 70–83.

10Gudmunson, C. G., & Danes, S. M. (2011). Family financial socialization: Theory and critical review. Journal of Family and Economic Issues, 32(4), 644–667.

11LeBaron, A. B., Marks, L. D., Rosa, C. M., & Hill, E. J. (2020). Can we talk about money? Financial socialization through parent-child financial discussion. Emerging Adulthood, 8(6), 453–463.