• Educational attainment;
  • financial behaviour;
  • financial education;
  • financial independence;
  • self-efficacy;
  • young adults


Young adults are in an important transition period from financially depending on their parents to becoming financially independent. The purpose of this study was to identify factors associated with perceived financial independence among American young adults aged 18–23. Taking an interdisciplinary perspective, we hypothesized that major contributing factors of young adults’ financial independence would include economic, psychological and family factors. Data were from two linked data sets, the 2009 Transition into Adulthood data set and its parental companion data set, the 2009 Panel Study of Income Dynamics, a nationally representative US sample. Results indicated that economic factors, such as young adults’ income, assets, work status and educational attainment were positively associated with financial independence. Several psychological factors such as economic self-efficacy, money management ability and problem-solving ability were also positively associated with financial independence. Family economic factors such as parental income, stock holding and financial assistance decreased the level of young adults’ financial independence. Additional analyses indicated that the level of financial independence of college graduates was higher than those who had never attended college or were currently in college but did not differ from those who had dropped out of college. Common and different factors associated with young adults’ financial independence were also identified among the four education groups. The findings of this study have implications for consumer educators to develop and implement targeted financial education programs for young adults aged 18–23 who differ by educational attainment.