Using the Expectancy-Value Theory to Understand Emerging Adult’s Financial Behavior and Financial Well-Being

Abstract

Using expectancy-value theory as a framework, we examined the independent effects of both early parental and personal financial expectations and values on emerging adults’ later financial behaviors and financial well-being during the college-to-career transition. Data were collected at three time points over 8 years from a cohort of college-educated emerging adults (N = 754 participants from a larger longitudinal study). The main finding showed that emerging adults’ personal expectations and values, but not parental values or expectations, predicted the financial behaviors they practiced in college; early parental expectations predicted financial well-being after leaving college. The financial behaviors practiced in college were associated with subsequent financial well-being. Finally, college financial behavior mediated the effect of early personal values on subsequent financial well-being, but not personal financial expectations. We discuss the findings in regard to facilitating emerging adults college-to-career transition.