THE ROLE OF POCKET MONEY IN THE FINANCIAL SOCIALIZATION OF YOUNG PEOPLE

Abstract

The paper examines the role of pocket money in relation to both financial socialisation and financial literacy. The results based on academic and grey literature and on primary research shows that pocket money has a significant impact on the development of financial awareness. The main conclusion of our research is that financial socialisation can be understood along an eight-stage, pocket money-centred development model in which theoretical knowledge is complemented by practice according to the receptive capacity of children and young adults. The development model can also serve as a starting point for programmes to improve financial literacy and increase their effectiveness. However, for the completion of financial socialisation and financial inclusion, it is also necessary that the fees and costs applied in the financial system should not distort the socialisation process outlined in the developmental model - all financial services should be available free of charge to individuals up to the age of 24, without excessive risk-taking. This can be interpreted as an investment by financial system actors in financially aware customers.