The Influence of Financial Self-Efficacy and Financial Socialization on Student's Financial Stress and Coping Choices

Abstract

College is the overwhelming choice for high school graduates in the United States with over 2.2 million 2016 high school graduates enrolled in college (BLS, 2016). Those 2.2 million students represent about 70% of 2016 high school graduates (BLS, 2016). These new undergraduate college students face considerable opportunities and challenges. The many changes facing college students have been termed ecological transitions (Bronfenbrenner, 1979). The ecological transitions facing college students include less parental supervision, more autonomy and new interpersonal relationships (Holinka, 2015). Increased academic expectations, both real and perceived, influence feelings of stress (Holinka, 2015). The rate of increase in college student stress has been described as “alarming” (King, Vidourek, Merianous, & Singh, 2014, p. 133). The initiators of this stress, stressors, take many forms including academic pressures and lifestyle changes (Friedlander, Reid, Shupak, & Cribbie, 2007). It is well documented these academic and lifestyle changes do indeed create a feeling of stress in many college students (King, Vidourek, Merianous, & Singh, 2014). The negative impact of stress on health includes decreased mental acuity, depression, suicide and many physical ailments including musculoskeletal disorders (Bauer, Chesin, & Jeglic, 2014; Ekpenyong, Daniel, & Aribo, 2013; Lester, 2014; Pedersen, 2012; Pelletier, Lytle, & Laska, 2016). Students often choose to cope with their stress with risky lifestyle choices such as binge drinking, drug use and promiscuity (Lester, 2014; Pedersen, 2012; Pelletier, Lytle, & Laska, 2016). Feelings of stress have been shown to be mitigated by high levels of self-efficacy. Self-efficacy is the belief that a person can accomplish what they set out to do (Bandura, 1997). Similarly, feelings of stress can be mitigated by positive socialization by parents, other family members, teachers and social networks. The impact of stress is considerable and well documented. This research seeks to further understand how a student’s financial self-efficacy and financial socialization may impact those feelings of financial stress and their coping choices. This deeper understanding may provide insight into the steps parents, educators, counselors and others may take to mitigate a college student’s sense of financial stress thus limited their feeling of need to choose adverse coping options.