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Social media play a role in the lives of young adults (18-25 years old), but motivators and influences of this and similar sources on their money handling are not well-understood. This study examined their personal finance information source choices using a non-random online survey (N = 229). Results of structural equation modeling suggested that four personal financial execution antecedent factors (i.e., impulse control, financial planning, financial motivation, and financial organization) may influence their selection of information source and such choice may affect financial satisfaction. Young adults who sought social media and online sources for personal financial decisions belonged to a distinct group, whereas their choices were associated with financial satisfaction. This study suggests that financial institutions and financial advisors targeting young adults should consider their financial executive orientations and connect with them through effective information sources, including social media.
Keywords: executive orientation, information source, personal finance, social media
Because more Americans are concerned about savings and retirement than ever before, the situation may become worse for young adults commonly known as the millennials-the children of baby boomers and later generations (Morin & Fry, 2012). It is reported that young adults are not saving for retirement and they face many challenges. For example, they do not participate in retirement planning as much when compared to previous generations (Steiner, 2009). Analysis from a brokerage firm suggests that younger and lower income clients hold poorly diversified portfolios and demonstrate lack of investor sophistication (Goetzmann & Kumar, 2008), and their financial positions are more fragile than analysts expected (Steiner, 2015). The Fidelity Investment firm reports that young adults are most at-risk of being unable to afford retirement expenses in comparison to other generations (Hicken, 2013).
Nevertheless, these young adults have unique characteristics that the financial industry should have a better understanding to design an effective communication plan to help them overcome related challenges. This generation includes approximately 80 million individuals born between 1981 and 2001. Some were born to parents of Generation X, and others were born to parents of baby boomers. These young adults behave and see the world differently than their parents or baby boomers do; they do not conform to older generations' expectations regarding investing and represent the first generation in history to communicate everyday...