Objective This study examines how differences among young adults' residential arrangements and parental support are related to variation in university students' financial and psychological well‐being. Method Six‐hundred four students completed an online survey about financial experiences and support, and well‐being. Students were split into four groups depending on their living situation and perceptions of adequate parental support. A multi‐groups approach tested test path differences among the groups. Results Living at home with parents combined with perceiving lower parental financial support was associated with lower financial strain and higher psychological well‐being, compared with reporting higher financial support when living at home, and living out of home regardless of support (p < .001). For students living outside of the parental home and perceiving inadequate parental financial support, economising was most strongly associated with perceived financial strain (p < .05), which in turn most strongly predicted lower well‐being (p < .05). Conclusions It is suggested that the non‐monetary assistance provided by remaining in the family home nullifies the protective benefits of perceiving adequate parental financial support; however, when living away from the parental home, perceiving adequate parental financial support can buffer negative effects of financial strain on well‐being.