A Pilot Study of Financial Independence from Perspective of American College Students

• In Event: Poster session III
  In Poster Session: Poster session 3

Proposal

Problems
Due to centuries of Western domination and other histories, many Chinese people have assumed that American parents are more rational in fostering their children’s ability to be self-reliant and self-sufficient (Americans, n.d.). Hence, we believe most American young adults above age 18 can become financially independent. However, many scholars found transitioning to adulthood for American children had been prolonged since the late 1970s (Sironi & Furstenberg, 2012). There is a trend that more young adults, especially college graduates, come back home—sometimes called the boomerang generation (Goldfarb, 2013)—and depend on parents to support them financially. This results from a series of economic, social, educational and psychological factors (Xiao, Chatterjee, & Kim, 2014) and imposes a huge burden on their families and parents, which could lead to social instability.
Although the extensive literature is based on parents’ role in college students’ financial behavior and education, little research has been done on their reflections on their own role in FI. This study aims to explore how college students perceive their financial independence (FI), how this process shapes their identity and mindset, and how it affects their family relationships. Investigating the economic outlook of young Americans is conducive to fully understanding the overall characteristics of this group and of positive significance for analyzing and illustrating the reasons for the young people's behavior, formulating corresponding coping strategies, and guiding measures.

Method
The overall research design used a qualitative approach to collect and analyze data. Sixteen undergraduates from a public university in southern California participated in one-on-one interviews. The semi-structured interviews usually begin with: “When it comes to financial independence, what do you think of? As the interview progresses, such thought-provoking question will be asked: “How do you view the relationship between FI and maturity and responsibility?” All the interviews were audio recorded, transcribed verbatim, and coded, such as “Idea of FI”, “influence on thoughts/behaviors/family relationships”. After initial coding, the researchers revisited each interview transcript to confirm that the data reflected its initial code.

Findings:
1. Many interviewees claim FI is a difficult but rewarding process that shapes who they are, boosts their economic self-efficacy, teaches them to be grateful, and enhances their sense of responsibility.
2. Almost all students in this study expressed their concerns or even struggle when they must work on top of school to act like an adult. Parental support, both financially and emotionally, at this time, assists the undergraduates to eliminate their worries so that they can focus on their academics.
3. Respondents’ FI and their family relations tend to be mutually affected.

Implications
The findings in this study have the following implications:
1) Parents should act as scaffolding systems to help their adult children realize their goals.
2) Policies should be made, and measures should be taken by the government to help undergraduates go smoothly into adulthood and achieve the overall independence. “…support does not have to compete with an idea of independence; it can be conceptualized as a step toward autonomy” (Swartz, Kim, Uno, Mortimer, & O’Brien, 2011)

Author

• Jingwen Xing, Chapman University