Page 18 - Payne Research Center ~ Money Matters

P A YN E C E N T E R . OR G
Discussion
Early exposure to financial challenges can have a lasting impact. Education, housing, and transportation— aspects of student daily life—posed challenges to the families of the survey participants due to their lack of financial literacy. Growing up in families that experienced these issues can have a lasting traumatic impact, potentially influencing financial behaviors and decision-making (Lusardi, 2019). Lusardi has shown that proactive financial interventions and developing essential skills can lead to improved financial practices and better long-term financial outcomes. Targeted interventions have also proven effective, such as personalized financial coaching that focuses on individual goals and helps develop greater confidence and autonomy (Federal Reserve Bank of San Francisco, 2015).
Students’ accounts of family financial challenges stemming from limited financial knowledge substantiate the need for greater financial literacy education. These findings suggest that financial difficulties are not isolated incidents but rather systemic issues that affect families across generations. The challenges related to education, housing, and transportation highlight the interconnectedness of various aspects of financial well-being. For example, the ability to afford quality education can impact future earning potential, while housing instability can create stress and insecurity that affect overall well-being.
Moreover, the findings highlight how intergenerational financial knowledge and practices shape individual financial outcomes. Children who grow up in households where financial literacy is low are more likely to inherit those same patterns, perpetuating a cycle of financial instability. This highlights the need for early and ongoing financial education interventions that target both students and their familial support systems. By equipping individuals with the knowledge and skills to manage their finances effectively, it is possible to break this cycle and promote greater financial well-being across generations.
First-generation college students especially require financial knowledge and skills as they face more financial challenges than their peers. Over one-third of the TMCF survey participants are the first in their families to attend college. First-generation students face considerably more financial stress than their peers whose parents’ attended college, including difficulty balancing college costs with their monthly expenses (Rehr et al., 2022). They are also more likely to take on education debt and have higher amounts of outstanding debt than those students with a college-educated parent (Fry, 2021).
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