Financial behavior among young adult consumers: the influence of self-determination and financial psychology

Abstract

Purpose In the uncertainty of the global economy, many young adults have financial independence from their parents and are making financial decisions in a difficult financial environment. This study aims to focus on debt management behavior for young adult consumers. Design/methodology/approach The data is from the 2010 National Longitudinal Survey of Youth 1997 (NLSY97). The NLSY97 includes information on US young consumers’ financial, demographic and attitudinal characteristics, as well as various socio-economic conditions, making it convenient to explore the relationships between financial behavior and psychology variables. In the 2010 survey, 4,110 young consumers were interviewed. Findings The results show that self-determination and motivation alone cannot bring about a direct change in financial behavior without the mediation of financial psychology. Therefore, consumer finance research should consider debt-management behavior by presenting different strategies than those currently used. Originality/value In the self-determination theory, emphasizes the internal grounds for distinguishing self-regulation from personality development and behavior. Specially, this paper deals with the financial behavior of young adult consumers through self-determination theory.