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Financial Identity-Processing Styles Among Young Adults: A Longitudinal Study of Socialization Factors and Consequences for Financial Capabilities






  • Soyeon Shim ( is a professor and Dean of the School of Human Ecology at University of Wisconsin-Madison. Joyce Serido ( is an assistant research professor in the Norton School of Family and Consumer Science and Leslie Bosch ( is a doctoral candidate in the Norton School of Family and Consumer Sciences, both at the University of Arizona. Chuanyi Tang ( is an assistant professor of marketing in the College of Business & Public Administration at Old Dominion University. The authors wish to thank National Endowment for Financial Education (NEFE) and Citi Foundation for funding the study.


Using identity theory as a basis for conceptualizing and clustering the financial identity-processing styles of young adults, this study examines antecedent socialization factors and consequent financial capabilities associated with those clusters. Using two-timed longitudinal surveys (N = 1,511) of college students, we proposed and confirmed three financial identity-processing styles, resembling Berzonsky's three identity-processing styles (i.e., informational, normative, and diffused-avoidant). Labeled Pathfinders, Followers and Drifters: these three clusters were profiled with respect to their socialization factors and financial capabilities. We concluded that identity theory can be applied to the financial domain, financial identity-processing styles are influenced by socialization factors (e.g., parents, learning), and these styles have consequences for individuals' financial capabilities (financial knowledge, self-efficacy, attitudes, and behaviors). Insights from this study may inform the design and implementation of effective financial parenting, financial education and intervention programs, and identify those young adults who may benefit from education and intervention efforts.