The study is based on data collected at three different time points over a six-year period and researchers tracked a group of students in the US from their fourth year of college to five years post-graduation.
Participants were asked at three different points to self-report on financial behaviour such as spending, saving, budgeting and borrowing.
"We found that financial behaviours during that fourth year of college continue to have positive implications for emerging adults more than half a decade later," said Melissa Curran, Associate Professor at University of Arizona in the US.
The findings, published in the Journal of Applied Developmental Psychology, showed that those who had good financial habits in their fourth year of college or who showed marked improvement in their habits over the course of the study, were more likely to see themselves as adults at the end of the study period, when they were 26 to 31 years old.
They found that those who practiced more responsible financial behaviours reported having fewer symptoms of depression and higher relationship satisfaction, both of which, in turn, seemed to promote the formation of adult identity.
While the study focused on college-educated students, future research should consider the implications of financial behaviour on adult identity formation in non-college educated young adults, said lead study author Xiaomin Li from the University of Arizona.
( With inputs from IANS )