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NEFE-Funded Research

Financial Education Informs Adult Behaviors

Teaching teens financial management skills prepares them to enter adulthood poised for success, according to the Arizona Pathways to Life Success for University Students (APLUS) project, a 10-year NEFE-funded study.  

APLUS demonstrates that financial behaviors learned early on remain relatively stable. Therefore, pre-college financial education leads to more financial knowledge in college, leading to healthier financial behaviors later in life. 

The study found that students who receive financial education in high school are 54 percent more likely to engage in financial education during the first year of college. And those students who received financial education in the first year of college are 73 percent more likely to further their financial education during their second and third years of college.

Putting Teens on a Path for Stability and Happiness

Several APLUS findings can help inform youth financial education, whether students are heading off to college, the military or into the workforce.

  1. Practice Proactive Financial Behaviors – Students who practice proactive financial behaviors are more likely to withstand unexpected demands and changing circumstances. Financial stress can cause young adults to make hasty, and potentially unwise, financial decisions. Practicing ahead of a crisis can prepare students to make better informed decisions. 
  2. Include Problem-Solving Exercises – A more active approach to problem-solving in general led to more successful loan repayment. Running through problem-solving exercises can help students achieve better financial well-being. 
  3. Continue the Conversation at Home – Parental teaching has the greatest influence on young adult financial behaviors. It’s important to note that parental communication and expectations are more important than parental finances. 

Parents Play a Critical Role

The learning doesn’t begin—or end—at school. The APLUS study determined that parents play an important role in preparing their children early on to be financially self-sufficient. Even after children leave home, parents remain a critical source of financial information.

There are many ways in which instructors can assist parents in ensuring their teens are prepared for adulthood. For example, teachers can provide information on navigating the application for student loans on Free Application for Federal Student Aid (FASFA), as well as how to negotiate aid awards.

For more ways to ensure students are better prepared for adulthood, check out 4 Financial Resources for Graduating Seniors.

What is APLUS and Why Does it Matter?

The Arizona Pathways to Life Success for University Students (also known as APLUS) research project, funded by the National Endowment for Financial Education, was launched in 2007 to discover what factors influence individual pathways to adult stability and happiness over time.

APLUS is a longitudinal research study that follows the same group of young adults from their first year in college through adulthood. The study merges family and developmental theories to analyze how young adults develop financial capability, including financial knowledge, values and skills, and adult life outcomes such as career, family formation, health and happiness.

Five waves of data have been collected:

  • Wave 1 Cultivating Positive Financial Attitudes and Behaviors for Healthy Adulthood, collected in spring 2008 (ages 18-21)
  • Wave 1.5 Economic Impact Study: Financial Well-Being, Coping Behaviors and Trust among Young Adults, collected in spring 2009 (ages 19-22) analyzes the direct impact of the 2008 financial crisis
  • Wave 2 Young Adults’ Financial Capability, collected in fall 2010 (ages 21-24)
  • Wave 3 Life After College: Drivers for Young Adult Success, collected in spring-summer 2013 (ages 23-26)
  • Wave 4 Insights on the Journey to Financial Adulthood: The Kids Are (Mostly) All Right, collected in spring-summer 2016 (ages 26-29)