(Albuquerque Journal (NM) (KRT) Via Thomson Dialog NewsEdge) Oct. 29--They aren't pulling in the money like their baby boomer parents, but members of Generation Y certainly inherit their elders' free-spending consumerism.

Today's teens and 20-somethings -- a population bubble some 60 million strong -- represent both a challenge and the promise of future growth for financial institutions.

"Gen Y knows they have options," Peter Sheahan, an Australian who is a business consultant about the generation. "If not satisfied with their treatment, they'll go to a competitor."

Young consumers have always been the targets of marketing, in the hopes that they will carry early product recognition and branding into their more lucrative years.

Unlike their boomer parents, who have always reveled in their status as the darlings of marketers, Gen Ys are put off by heavy commercialization. But like their parents, buying stuff is a way of life.

"The culture is so focused on spending, spending, spending," said Sharla Reinhart of New Mexico Educators Federal Credit Union. And often cashstrapped Gen Ys become victims of their own spending, she said.

Expectations

Also called the generation of Echo Boomers, Gen Y is defined by years in which the nation's birth rate increased. Although it varies from one source to another, the most common range for Gen Y birth years is 1979-1994.

Thus they follow Generation X, which is generally defined as those born between 1965 and 1978. The Gen X years marked a sharp drop in birth rate from the preceding Baby Boom.

Although still not as numerous as the roughly 75 million boomers, Gen Ys outnumber Xers substantially, more than 2 to 1.

Raised by boomers, Gen Ys were -- and are -- often indulged by parents who want to be their friends rather than authority figures. As a result, they have high expectations in life.

Demographic studies and surveys describe them as generally idealistic, involved and impatient.

Gen Ys are also characterized as being highly sociable and interested in relationship building. They use their technology savvy to blog, text-message friends and post on Web sites like MySpace.com.

But they are far less likely than Gen Xers to bank or buy online, at least at this stage in their lives.

Around a corner

"They're all pretty much the same," said 28-year-old Ernest Doty: "Banks are never open when I need them to be open."

Hanging out near Silver and Yale SE with skateboard in hand, Doty said he chose Wells Fargo because it had a branch close to where he lives.

It's no secret that convenience is an allencompassing priority with Gen Y.

"They want to do it now and in their own time zone," said Linda Wedeen of First Community Bank.

With a branch in the Student Union Building, the New Mexico Educators F.C.U. has cornered the market on convenience at the University of New Mexico. It is the only financial institution on campus.

"I can come in between classes and there are ATMs all over town," said UNM junior Derek Duszynski, 24, while preparing a deposit.

Online banking is convenient, but another N.M. Educators customer, 20-year- old UNM junior Eric "Red" Schreiber, pointed out, "It doesn't put cash in my hand when I need it."

Online banking is also not a big deal because Gen Y banking needs are still pretty simple: checking account, savings account and debit card.

And their account balances are typically not high finance. "I live check to check," Doty said.

Credit cards are everywhere.

"Most people in my peer group have at least one," Schreiber said. "My roommate has three. He uses them a lot and is always complaining about it."

UNM sophomore Leo Sainz, 20, said he had a credit card before he had a checking account.

Sophia Cota, a 20-year-old sophomore, appears to be an exception.

"I haven't tapped into that whole thing yet," she said about credit cards. "It's tempting. I'm so close to getting one."

Debt literacy

"How can I fix my credit?"

That's by far the most common question asked by Gen Ys when Reinhart conducts money management seminars at high schools and colleges around the state.

"A lot of times they'll say, 'If I can't find a job and get some money, I'll just use my credit card,' '' Reinhart said. "They think credit solves things."

A recent survey of 18- to 24-year-olds showed nearly threequarters had some sort of debt.

Another survey by Atlantabased Synergistics Research Corp. found more than onethird of recent college graduates were at least $20,000 in debt.

Easy credit, including college loans, is only part of the issue.

"The research we've done shows over half of this generation graduates from high school without any formal education on money management or financial literacy," said Gina Fung of Wells Fargo in San Francisco.

In addition, younger Gen Ys are often clueless about how expensive it is to live on their own in the "real world," Reinhart said. Rent, food and car costs add up to much more than they expect.

To close the financial literacy gap, Wells Fargo has its Hands on Banking program geared to Gen Y's preference to learn by experiencing the use of a product or service.

The program uses an interactive kiosk and an online, role-playing video game called Stagecoach Island (Wells Fargo's logo is a stagecoach).

While Gen Ys may have a problem with living within their means, studies show they are more likely to do something about it -- seek advice or research answers -- than the youth of preceding generations.

Copyright (c) 2006, Albuquerque Journal, N.M.
Distributed by McClatchy-Tribune Business News.
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