Financial literacy of Hong Kong Chinese adolescent: Testing the validity of a scale and evaluating two conceptual models

Financial literacy is important because it can positively direct human financial behaviors and strengthen financial status. Measuring and improving the financial literacy of adolescents in Hong Kong is associated with special significance. Financial literacy plays the important role underlying intergenerational poverty, and can be transmitted between generations. However, financial literacy may not be the cause. Family poverty status may influence the financial literacy of next generations, and the financial literacy of next generation may further impact their poverty status when achieving adulthood. With a convenience sample of 789 Hong Kong students, current research validated the Financial Fitness for Life test among Hong Kong Chinese adolescents. With another convenience sample of 200 paired parents and students, current research adopted the FFFL test to measure the financial literacy of adolescents and adopted structural equation modeling to explore mechanisms explaining the impact of family income on the financial literacy of adolescents, namely the models of socialization and general poverty. International comparison demonstrates that the financial literacy of Hong Kong Chinese adolescents is worse, compared to that of the U.S., New Zealand and Japan. 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 show that the same link can be mediated by both parental stress and positive parenting behavior. All rights reserved.