Financial Behavior among Emerging Adults

Abstract

A broad understanding of financial well-being among emerging adults necessarily requires some understanding of their financial behavior. In this chapter, we focus on several broad categories of consumer behavior that have received attention from social scientists and policymakers. Respectively, we provide a deeper exploration of budgeting, saving, investing, and credit/debt management. These categories provide a strong foundation for understanding financial flourishing or floundering. While it can be difficult to separate behavior from broader factors such as financial literacy and institutional considerations, we strive to provide a picture of emerging adults’ observed behaviors and consider the implications of those behaviors. This chapter highlights the unique challenges of needing to borrow more at younger ages, challenges in saving for the short and long term, and general financial security among emerging adults. These challenges are considered in the context of general wage stagnation and increasing cost of living. Recommendations for emerging adults are provided.