Economic difficulties in early childhood are associated with significant adverse long-term socioemotional and cognitive outcomes. In this study, we examine an understudied financial stressor that is often observed during periods of high unemployment--transient familial financial stress (TFS). We use the early childhood longitudinal study--(birth) cohort, to examine the association between exposure to TFS during early childhood and subsequent socioemotional and cognitive development. Exposure to TFS early in life is associated with a 1.25- and 1.16-point reduction (p < 0.05) in preschool reading and math scores, respectively. Path analysis suggests that these outcomes are partially mediated by mother-child interaction and parental investment. These findings provide important insights that can help inform early intervention efforts.