Factors Related to Financial Stress among College Students
Thoughts
Financial stress may be defined as the inability to meet one’s financial obligations, but can also include psychological or emotional effects, as per Northern et al. (2010).
Financial stress has negative outcomes: anxiety, depression, poor academic performance, poor health and difficulty persisting towards degree completion.
This study measured financial stress through a list of seven questions called financial stressors.
The authors used an adapted framework of the Roy Adaptation Theory:
- Stimuli as financial stressors
- Current level of adaptation represented by sociodemographic characteristics
- Self-concept represented by financial self-efficacy and financial optimism
- State of stress measured by “I feel stressed about my personal finances in general”
Reported determinants of financial stress:
- Gender: women more likely to experience financial stress @brougham2009, corroborated by this study
- Anticipated debt
- Financial anxiety
- Financial stressors:
- “Not having enough money to participate in the same activities as peers” (OR=5.7)
- “Regularly spent more money than they could afford” (OR=2.2)
- “Not able to pay my bills on time” (OR=1.7)
- “Have debt” (OR=1.8)
- “Don’t know if in debt” (OR=1.5)
- “How much student loan debt do you expect to accumulate by the time you graduate?”: “below average” (OR=1.7), “average debt” (OR=2), “above average” (OR=3.02)
- Color: Black students less likely to report financial stress (need further investigation)
- Financial self-efficacy: “I manage my money well” (OR=0.670)
- Financial optimism:
- “Positive about future financial situation” (OR=0.819)
- “Able to support myself after graduation” (OR=0.771)
Connects with: @archuleta2013 @heckman2014 @northern2010
Annotations
heckman2014 - p. 20
Although the incidence of financial stress has been well-documented, much less is known about the factors related to financial stress among college students.
heckman2014 - p. 20
This study sought to fill this gap in the literature by identifying the factors that are associated with increased likelihood of financial stress.
heckman2014 - p. 20
this study contributes by introducing a new theoretical framework based on the concept of adaptation
Note: Roy Adaptation Theory
heckman2014 - p. 20
Financial stress may be defined as the inability to meet one’s financial obligations, but can also include psychological or emotional effects (Northern et al., 2010)
heckman2014 - p. 20
negative outcomes of financial stress: (a) depression (Andrews & Wilding, 2004; Clark-Lempers, Lempers, & Netusil, 1990), (b) anxiety (Andrews & Wilding, 2004), (c) poor academic performance (Andrews & Wilding, 2004; Harding, 2011), (d) poor health (Northern et al., 2010), and (e) difficulty persisting towards degree completion (Letkiewicz, in press; Joo, Durband, & Grable, 2008; Robb, Moody, & Abdel-Ghany, 2011)
heckman2014 - p. 21
Financial stress was measured by summing the number of positive responses to seven financial stressors, such as “not able to save for an emergency” and “not able to pay utilities.”
heckman2014 - p. 21
Very few studies have examined factors related to the likelihood of reporting financial stress
heckman2014 - p. 21
They found that college women were more likely to report financial stress than college men (Brougham et al., 2009).
heckman2014 - p. 21
Anticipated debt has also been shown to be a strong predictor of financial stress among medical students (Morra, Regehr, & Ginsburg, 2008).
heckman2014 - p. 21
Archuleta, Dale, and Spann (2013) found that among college students, higher levels of financial satisfaction were significantly and negatively related to financial anxiety.
Note: what’s the definition of financial anxiety? how’s it related to financial stress?
heckman2014 - p. 21
While being unable to pay bills and other financial difficulties may indeed produce stress, there are important psychological aspects of stress that may be missed when using financial data alone
heckman2014 - p. 21
Stress is certainly a complex construct, but the differences in measurement of financial stress are likely a result of a lack of theory-based research. Many of the studies mentioned above do not include an explanation of the theoretical framework used to investigate issues related to financial stress.
heckman2014 - p. 21
Two important concepts have been linked to stress in the college student literature: self-efficacy and optimism.
heckman2014 - p. 21
Research has shown that self-efficacy is associated with a reduced likelihood of stress among college students (Zajacova, Lynch, & Espenshade, 2005) and is positively related to academic performance (Chemers, Hu, & Garcia, 2001; Zajacova et al., 2005).
heckman2014 - p. 21
Optimism has also been found to be an important construct among college student academic outcomes (Chemers et al., 2001) and health outcomes (Scheier & Carver, 1987).
heckman2014 - p. 23
Since it is assumed that each student has a unique level of adaptation given his or her experiences and personal history demographic characteristics represent the student’s current level of adaptation
heckman2014 - p. 23
Self-efficacy and optimism, in the context of personal finances, were chosen to represent the student’s self-concept.
heckman2014 - p. 23
As the student is presented with possible financial stressors (stimuli), he or she processes these stressors based on previous adaptation and his or her self-concept (coping mechanism).
heckman2014 - p. 24
A binary variable representing financial stress served as the response variable. This variable was based on the following statement: “I feel stressed about my personal finances in general.” Students responded on a four-point Likert-type scale from 1 (strongly disagree) to 4 (strongly agree).
heckman2014 - p. 25
financial stressors that could potentially cause financial stress among college students: 1. “I have enough money to participate in most of the same activities as my peers do.” 2. “I regularly spend more than I have by using credit or borrowing.” 3. “I pay my bills on time every month.” 4. “Do you currently have debt from any source, including student loans, credit cards, car loans, personal loans from financial institutions or from family/friends, or any other type of credit or loans?” 5. “How much student loan debt do you expect to accumulate by the time you graduate?”
heckman2014 - p. 26
Financial self-efficacy was measured by a single item on the OSFWS, “I manage my money well.”
heckman2014 - p. 26
Financial optimism was measured by two items, a general optimism question and a question about the students’ ability to support themselves after graduation.
heckman2014 - p. 29
Not having enough money to participate in the same activities as peers had the largest positive effect (OR=5.708) on reporting financial stress.
heckman2014 - p. 29
Students who had debt (OR = 1.811) or who didn’t know if they had debt (OR = 1.525) were significantly more likely to report financial stress than students who did not have any debt.
heckman2014 - p. 30
Compared to students who did not expect to have any student loan debt at graduation, students who expected to have below average debt (OR = 1.686), average debt (OR = 2.023), and above average debt (OR=3.024) were significantly more likely to report financial stress.
heckman2014 - p. 30
Males were significantly less likely to report financial stress than females (OR = .593).
heckman2014 - p. 30
Black students were significantly less likely to report financial stress than White students (OR = .465).
heckman2014 - p. 30
Students reporting higher financial self-efficacy were significantly less likely to report financial stress (OR = .670).
heckman2014 - p. 30
students who were optimistic about their financial situation in the future and who believed they would be able to support themselves after graduation were significantly less likely to report financial stress (OR = .819 and .771, respectively).
heckman2014 - p. 37
Andrews, B., & Wilding, J. M. (2004). The relation of depression and anxiety to life-stress and achievement in students. British Journal of Psychology, 95(4), 509-521. doi: 10.1348/0007126042369802
heckman2014 - p. 37
Archuleta, K. L., Dale, A., & Spann, S. M. (2013). College students and financial distress: Exploring debt, financial satisfaction, and financial anxiety. Financial Counseling and Planning, 24(2), 50-62.
heckman2014 - p. 37
Archuleta, K. L., & Grable, J. E. (2010). The future of financial planning and counseling: An introduction to financial therapy. In J. E. Grable, K. L. Archuleta & R. R. Nazarinia (Eds.), Financial Planning and Counseling Scales (pp. 33).
heckman2014 - p. 37
Brougham, R., Zail, C., Mendoza, C., & Miller, J. (2009). Stress, Sex Differences, and Coping Strategies Among College Students. Current Psychology, 28(2), 85-97. doi: 10.1007/s12144-009-9047-0
heckman2014 - p. 37
Chemers, M. M., Hu, L., & Garcia, B. F. (2001). Academic self-efficacy and first year college student performance and adjustment. Journal of Educational Psychology, 93(1), 55. doi: 10.1037/0022-0663.93.1.55
heckman2014 - p. 37
Clark-Lempers, D. S., Lempers, J. D., & Netusil, A. J. (1990). Family Financial Stress, Parental Support, and Young Adolescents’ Academic Achievement and Depressive Symptoms. The Journal of Early Adolescence, 10(1), 21-36. doi: 10.1177/0272431690101002
heckman2014 - p. 37
Harding, J. (2011). Financial circumstances, financial difficulties and academic achievement among first-year undergraduates. Journal of Further and Higher Education, 35(4), 483-499. doi: 10.1080/0309877x.2011.584969
heckman2014 - p. 38
Hayhoe, C. R., Leach, L. J., Turner, P. R., Bruin, M. J., & Lawrence, F. C. (2000). Differences in Spending Habits and Credit Use of College Students. Journal of Consumer Affairs, 34(1), 113-133. doi: 10.1111/j.1745-6606.2000.tb00087.x
heckman2014 - p. 38
Joo, S.-h., Durband, D. B., & Grable, J. E. (2008). The academic impact of financial stress on college students. Journal of College Student Retention: Research, Theory and Practice, 10(3), 287-305. doi: 10.2190/CS.10.3.c
heckman2014 - p. 38
Letkiewicz, J. C., Lim, H., Heckman, S. J., Bartholomae, S., Fox, J. J., & Montalto, C. P. (in press). The path to graduation: Factors predicting on-time graduation rates. Journal of College Student Retention: Research, Theory and Practice.
heckman2014 - p. 38
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heckman2014 - p. 38
Morra, D. J., Regehr, G., & Ginsburg, S. (2008). Anticipated debt and financial stress in medical students. Medical Teacher, 30(3), 313-315. doi: 10.1080/01421590801953000
heckman2014 - p. 38
Northern, J. J., O’Brien, W. H., & Goetz, P. W. (2010). The development, evaluation, and validation of a financial stress scale for undergraduate students. Journal of College Student Development, 51(1), 79-92. doi: 10.1353/csd.0.0108
heckman2014 - p. 38
Robb, C. A., Moody, B., & Abdel-Ghany, M. (2011). College student persistence to degree: The burden of debt. Journal of College Student Retention: Research, Theory and Practice, 13(4), 431-456. doi: 10.2190/CS.13.4.b
heckman2014 - p. 38
Ross, S. E., Niebling, B. C., & Heckert, T. M. (1999). Sources of stress among college students. College Student Journal, 33(2), 312.
heckman2014 - p. 38
Roy, C., & Andrews, H. A. (2008). The Roy Adaptation Model: Pearson Prentice Hall.
heckman2014 - p. 38
Scheier, M. F., & Carver, C. S. (1987). Dispositional optimism and physical well-being: the influence of generalized outcome expectancies on health. Journal of Personality, 55(2), 169-210. doi: 10.1111/j.1467-6494.1987.tb00434.x
heckman2014 - p. 39
Zajacova, A., Lynch, S. M., & Espenshade, T. J. (2005). Self-Efficacy, Stress, and Academic Success in College. Research in Higher Education, 46(6), 677-706. doi: