Longitudinal Relationships Between Financial Stress, Career Related Optimism, and Psychological Distress During Emerging Adulthood in Australia

The current study examined financial stress, career-related optimism, and psychological distress from the age of 19 (2013; n = 5,787), until the age of 25 (2019; n = 2,933) using the Longitudinal Surveys of Australia Youth (2009 cohort). Longitudinal mediation using latent growth curve modeling observed trajectories of change across young adulthood, whereby financial stress and career-related optimism decreased, while psychological distress increased across time. The inclusion of regression parameters in the analyses indicated that participants with shallower reductions in financial stress reported steeper increases in distress, and this effect was mediated by shifting career-related optimism. With ongoing financial pressures around the world disproportionately impacting young people, our work further illustrates how these stressors can shape the life course via shifts in vocational optimism and subsequent mental health. Moving forward, policies and timely clinical interventions should be implemented to assist young adults in navigating this pivotal developmental period.