Financial literacy among Hong Kong's Chinese adolescents: Testing the validity of a scale and evaluating two conceptual models

Against today's global backdrop where financial responsibility has been transferred from the government to individuals, financial literacy, as a key component of financial capacity, could be an effective strategy to escape from lifecourse poverty. Compared with young adults, research demonstrates that financial literacy among adolescents is of greater importance. The present study fills the theoretical gap to measure the financial literacy of Hong Kong Chinese adolescents by validated Financial Fitness for Life (FFFL) Test, and explore its development by fitting data collected in Hong Kong into a model of socialization and a model of general poverty and comparing their ability to explain the link between family income and the financial literacy of adolescents. The results of the model of socialization show that parental financial behavior can explain the link between family income and the financial literacy of adolescents. The results of the model of general poverty are associated with better influential power, showing that the same link can be mediated by both parental stress and positive parenting behavior. The findings of this study specify the critical role of parents, offer specific entry points for interventions by policymakers and educators, and provide parents with pathways to positively influence the development of financial literacy among adolescents. Copyright © 2018 The Author(s).