The impact of pocket money and term-time employment on the financial confidence of adolescents in New Zealand

Purpose Confidence has been found to play an important role in financial behaviour and has been found to be a more accurate predictor of outcomes related to day-to-day money management than financial knowledge. Youth have been specifically identified as a group at risk of low financial confidence. This study uses a large sample of 3,681 twelve- to fourteen-year-old adolescents to examine predictors of financial confidence. Design/methodology/approach This study uses principal component analysis alongside structural equation modelling analysis to establish predictors of adolescent financial confidence. Structural equation modelling analysis is used to establish whether predictors of financial confidence are moderated through receiving pocket money or having a part-time job. Findings A family financial culture of openness is significantly correlated with greater financial confidence. Living in a more affluent household, being of male gender and having a term-time job are all positively correlated with greater financial confidence. The increased financial confidence correlated with more affluent households is moderated through an adolescent having a term-time job. Youth may be able to mitigate the negative effect on financial confidence of living in a lower-affluence household by having a term-time job. Originality/value This study adds to previous research showing the impact of financial socialisation in the home. A unique finding from this study is evidence for term-time jobs being correlated with higher financial confidence, while receiving pocket money is not. Evidence is also found for greater household affluence and higher financial confidence being moderated through having a term-time job.