Psychosocial Factors Determining Long-Term Financial Planning Tendencies of University Students: Anxiety About the Future and Financial Socialization Within the Family

Ahmet Onay

doi:10.55047/transekonomika.v6i3.1231

Authors

Ahmet Onay* Transportation Vocational School, Eskisehir Technical University, Turkey https://orcid.org/0000-0003-1182-6003

DOI:

https://doi.org/10.55047/transekonomika.v6i3.1231

Keywords:

Behavioral Finance, Family Financial Socialization, Financial Literacy, Future Anxiety, Long-Term Financial Planning

Abstract

Backgrounds: The psychosocial factors, shaped by young people’s financial decisions, are heavily influenced by macroeconomic uncertainties, global inflationary pressures, and contractions in the labor market. Financial literature and traditional theories tend to explain individuals’ long-term financial decisions primarily through their level of financial literacy. In contrast, behavioral finance literature argues that these decisions cannot be explained solely by the level of financial literacy. Variables such as psychological state and sociological upbringing also influence the shaping of these decisions.

Objectives: This study aims to identify the factors determining the long-term financial planning tendencies of associate degree students in construction inspection and the actual role of financial knowledge in this process, from a behavioral finance perspective.

Methodology: The research sample consists of associate degree students. Data were collected through a questionnaire. Long-term financial planning, future anxiety, and family financial socialization variables were measured using a 5-point Likert scale. Pearson correlation, independent samples t-test, and multiple linear regression analyses were conducted using Jamovi statistical software.

Findings: Correlation analyses showed moderate negative correlations between future anxiety and financial planning, and strong positive correlations between intra-family financial socialization and planning. In the regression analysis, intra-family financial socialization was found to be the only significant variable predicting long-term planning.

Conclusions: The findings indicate that strategies that consider family-related factors are needed in integrating young people into rational financial systems. The findings of this research can be used to develop recommendations for macro-level education policies and micro-level policies for families and individuals.

Downloads

Download data is not yet available.

References

Ackert, L. F., & Deaves, R. (2010). Behavioral Finance: Psychology, Decision-making, and Markets. South-Western Cengage Learning.

Barış, S. (2016). Finansal Okuryazarlık ve Bütçeleme Davranışı: Üniversite Öğrencileri Üzerine Bir Araştırma. TESAM Akademi Dergisi, 3(2), 13–38. https://izlik.org/JA82UK67DW

Başarır, Ç., & Sarihan, A. Y. (2017). Üniversite Öğrencilerinin Finansal Okuryazarlıklarının Belirlenmesi: Bandırma Onyedi Eylül Üniversitesi Örneği. Yönetim ve Ekonomi Araştırmaları Dergisi, 15(1), 143–162. https://doi.org/10.11611/yead.330952

Durak, A., & Palabıyıkoğlu, R. (1994). Beck Umutsuzluk Ölçeği Geçerlilik Çalışması. Kriz Dergisi, 2(2), 311–319. https://doi.org/10.1501/Kriz_0000000071

George, D., & Mallery, P. (2010). SPSS for Windows Step by Step: A Simple Guide and Reference, 17.0 Update. Allyn & Bacon.

Grable, J., Heo, W., & Rabbani, A. (2015). Financial Anxiety, Physiological Arousal, and Planning Intention. Journal of Financial Therapy, 5(2). https://doi.org/10.4148/1944-9771.1083

Gudmunson, C. G., & Danes, S. M. (2011). Family Financial Socialization: Theory and Critical Review. Journal of Family and Economic Issues, 32(4), 644–667. https://doi.org/10.1007/s10834-011-9275-y

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2010). Multivariate data analysis 6th Edition. Pearson Prentice Hall.

Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household Financial Management: The Connection between Knowledge and Behavior. Federal Reserve Bulletin, 89, 309–322. https://www.federalreserve.gov/pubs/bulletin/2003/0703lead.pdf

Jorgensen, B. L., Rappleyea, D. L., Schweichler, J. T., Fang, X., & Moran, M. E. (2016). The Financial Behavior of Emerging Adults: A Family Financial Socialization Approach. Journal of Family and Economic Issues, 38(1), 57–69. https://doi.org/10.1007/s10834-015-9481-0

Jorgensen, B. L., & Savla, J. (2010). Financial Literacy of Young Adults: The Importance of Parental Socialization. Family Relations, 59(4), 465–478. https://doi.org/10.1111/j.1741-3729.2010.00616.x

Jung, S., & Vranceanu, R. (2019). Competitive compensation and subjective well-being: The effect of culture and gender. Journal of Economic Psychology, 70, 90–108. https://doi.org/10.1016/j.joep.2018.11.002

Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263. https://doi.org/10.2307/1914185

LeBaron‐Black, A. B., Curran, M. A., Hill, E. J., Toomey, R. B., Speirs, K. E., & Freeh, M. E. (2022). Talk is cheap: Parent financial socialization and emerging adult financial well‐being. Family Relations, 72(3), 1201–1219. https://doi.org/10.1111/fare.12751

Lusardi, A., & Mitchell, O. S. (2011). Financial literacy around the world: an overview. Journal of Pension Economics and Finance, 10(4), 497–508. https://doi.org/10.1017/s1474747211000448

Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. American Economic Journal: Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5

OECD. (2020). OECD/INFE 2020 International Survey of Adult Financial Literacy. OECD/INFE. https://www.oecd.org/content/dam/oecd/en/publications/reports/2020/06/oecd-infe-2020-international-survey-of-adult-financial-literacy_bbad9b27/145f5607-en.pdf

Pak, T., Fan, L., & Chatterjee, S. (2023). Financial socialization and financial well‐being in early adulthood: The mediating role of financial capability. Family Relations, 73(3), 1664–1685. https://doi.org/10.1111/fare.12959

Sirsch, U., Zupančič, M., Poredoš, M., Levec, K., & Friedlmeier, M. (2019). Does Parental Financial Socialization for Emerging Adults Matter? The Case of Austrian and Slovene First-Year University Students. Emerging Adulthood, 8(6), 509–520. https://doi.org/10.1177/2167696819882178

Strömbäck, C., Lind, T., Skagerlund, K., Västfjäll, D., & Tinghög, G. (2017). Does self-control predict financial behavior and financial well-being? Journal of Behavioral and Experimental Finance, 14, 30–38. https://doi.org/10.1016/j.jbef.2017.04.002

Tabachnick, B. G., & Fidell, L. S. (2013). Using multivariate statistics (6th ed.). Pearson Education.

Xin, Z., Xiao, H., & Lin, G. (2023). Math Anxiety and Financial Anxiety Predicting Individuals’ Financial Management Behavior. Depression and Anxiety, 2023, 1–10. https://doi.org/10.1155/2023/3131631

Zaleski, Z. (1996). Future Anxiety: concept, measurement, and preliminary research. Personality and Individual Differences, 21(2), 165–174. https://doi.org/10.1016/0191-8869(96)00070-0

Zhao, H., & Zhang, L. (2020). Talking money at home: the value of family financial socialization. International Journal of Bank Marketing, 38(7), 1617–1634. https://doi.org/10.1108/ijbm-04-2020-0174