Linking Identity Processes to Spending Self-Control Capacities in Emerging Adulthood: The Mediating Role of Self-Regulatory Identity Functions

Abstract

Becoming financially independent requires financial capabilities, such as capacities to control spending, and prior research suggests that identity may play a role in developing such capacities. This cross-sectional study sought to investigate how identity formation is related to spending self-control through the mediating role of self-regulatory identity functions. Participants were 481 Lithuanian students (40% employed; 57.8% women; M age = 20.27, SD age = 1.39). Results revealed that general domain identity processes affected financial capabilities both directly and indirectly (through the mediation of identity functions). Specifically, the findings highlighted that (a) ruminative exploration may make individuals more vulnerable to impulsive buying, whereas exploration in depth can promote controlled spending (direct effects) and (b) exploration in breadth and identification with commitment may promote spending self-control by strengthening goal-setting capacities (indirect effects). In synthesis, this study contributes to the understanding of favorable and unfavorable implications of identity formation on financial capabilities in emerging adulthood.