Emerging Adults’ Financial Decisions: A Neurocognitive Perspective

Emerging adults are required to assume more and more responsibility over their financial situation by making decisions that will affect their future financial well-being. However, at the same time, younger individuals are more likely to exhibit impulsive decisions, risk- and sensation-seeking behaviors, and an overestimation of their knowledge and capabilities in financial domains. This can be due to changes in neural development that occur until early adulthood and to psychological characteristics that can negatively affect their decision-making process. The present chapter investigates individual differences involved in financial decision-making by exploring cognitive and neural correlates. Understanding the main neural and cognitive mechanisms that affect emerging adults’ financial decision-making may have various practical implications, including the development of financial education initiatives specifically for emerging adults.