Financial literacy among children: the role of involvement in saving money

Abstract

Purpose This study aims to examine the role of involvement in saving money (ISM) to better understand children’s saving behavior and allow a deeper understanding of financial literacy processes among children. The emphasis on ISM is based on previous studies indicating the central role of involvement variables in information processing among young people. Design/methodology/approach The study is based on one-on-one interviews among 103 first-grade children. The interviews explored the relationship between the child’s ISM and substantial finance-related outcomes (attitudes toward saving money, intention to save money and saving behavior) and factors that might explain the child’s ISM (access to money, perceived importance of parental and peer attitudes toward saving money and actual parental and peer attitudes toward saving money). Findings Children with a high level of ISM expressed more positive attitudes toward saving, as well as more positive behavior with regard to saving. With respect to the factors that might explain the child’s level of ISM, two out of the three variables, namely, the perceived importance of parental and peer attitudes toward saving money and the child’s access to money, played a significant role in determining the child’s level of ISM. Originality/value This initial study demonstrates the importance of the involvement variable in the context of financial literacy and the need to investigate the child’s perceptions of, and motivation for, saving, with a focus on the child’s viewpoint.