Adolescents’ financial literacy: The role of financial socialization agents, financial experiences, and money attitudes in shaping financial literacy among South Korean youth Sang-Hee Sohn a , So-Hyun Joo b, * , John E. Grable c , Seonglim Lee d , Minjeung Kim e a Department of Consumer Science, The Research Institute of Human Ecology, Seoul National University, Seoul, Republic of Korea b Consumer Studies, College of Social Sciences, Ewha Womans University, 11-1 Deahyun Dong, Seodaemum Gu, Seoul, 120-750, Republic of Korea c Personal Financial Planning, Kansas State University, Manhattan, KS, USA d Department of Consumer & Family Sciences, Sungkyunkwan University, Seoul, Republic of Korea e Department of Consumer Studies, College of Human Ecology, Chungbuk National University, Chungbuk, Republic of Korea Keywords: Financial socialization agents Money attitudes Financial experiences Financial literacy Financial education abstract The purpose of this study was to test the relationships between financial socialization agents, financial experiences, money attitudes, demographic characteristics, and the financial literacy of Korean adolescents. Using the 2006 Korean National Financial Literacy Test Survey for Adolescents (N ¼ 1185), a series of regression analyses were performed to determine the factors related to financial literacy. It was found that those who chose media as their primary financial socialization agent, and those who had a bank account, exhibited higher levels of financial literacy. Among the sample, those who saw money as good or as a reward for efforts tended to report higher levels of financial literacy, while those perceiving money in terms of avoidance or achievement had lower levels of financial literacy. Students with mid-range monthly allowances showed higher levels of financial literacy compared to the highest allowance group. Implications for financial educators, policy makers, and researchers are provided. Ó 2012 The Foundation for Professionals in Services for Adolescents. Published by Elsevier Ltd. All rights reserved. Financial literacy can be generally defined as a person’s ability to understand, analyze, manage, and communicate personal finance matters (Vitt et al., 2000). Specifically, financial literacy refers to the knowledge and skills necessary to handle financial challenges and decisions in everyday life. Financial literacy at the macro-level ensures that citizens of a country are adequately equipped to deal with everyday financial situations and transactions in the marketplace. Low levels of financial literacy can produce sub-optimal financial decisions, which, in the aggregate, can yield low levels of well-being by making it difficult for consumers to meet their financial needs essential for living. Previous research has found that low financial literacy is associated with a tendency for consumers to be disengaged from processes leading to optimal decision making. This often results in financial behaviors varying greatly from recommended guidelines, which, in turn, contributes to low levels of financial well-being (Hilgert, Hogarth, & Beverly, 2003; Lusardi & Mitchell, 2007). Furthermore, gauging the financial literacy of young people is especially important when viewed from the perspective that financial knowledge and skills acquired early in life create a foundation for future financial behavior and well-being (Beverly & Burkhalter, 2005; Martin & Oliva, 2001). As a fast developing country, Korea shares many of the same consumer financial problems faced by other developing and developed nations. In 1997, Korea faced a severe currency crisis. The country emerged from the predicament financially * Corresponding author. Tel.: þ82 10 6322 0905; fax: þ82 2 3277 4010. E-mail address: sohyunjoo@ewha.ac.kr (S.-H. Joo). Contents lists available at SciVerse ScienceDirect Journal of Adolescence journal homepage: www.elsevier.com/locate/jado 0140-1971/$ – see front matter Ó 2012 The Foundation for Professionals in Services for Adolescents. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.adolescence.2012.02.002 Journal of Adolescence xxx (2012) 1–12 Please cite this article in press as: Sohn, S.-H., et al., Adolescents’ financial literacy: The role of financial socialization agents, financial experiences, and money attitudes in shaping financial literacy among South Korean youth, Journal of Adolescence (2012), doi:10.1016/j.adolescence.2012.02.002