It's no secret that Gen Y is an online generation that wants instant access to everything, including their financial institutions. The issue that credit unions should be looking at is what Gen Y is doing with that instant access.A recent survey from Digital Insight showed that 97% of Gen Y respondents use online banking to track accounts and 90% use it to transfer money, but only 25% use budgeting tools. Another survey from Aite Group on Gen Y banking habits found that just 5% of the Gen Yers it surveyed use personal finance management tools weekly, with an additional 12% using the tools less frequently.The Aite survey also found that awareness among Gen Y of emerging financial services-related Web sites was low. Aite asked Gen Y respondents about their familiarity with 27 different sites, and only five sites were known to at least 10% of respondents. Also, few of those who had heard of the sites had actually visited them.Shawn Ward, co-founder of personal finance solutions provider Geezeo, said that one of the challenges with Gen Y is that many are impulse minded."They look at if they have enough money to go out right now, which they can see from their online account. They're not thinking how to stretch their money."For some, college graduation causes a shift in thinking from impulsive to saving, Ward said, making them more likely to use budgeting tools.Another issue, Ward said he encountered early on in his business, is that consumers prefer to get their personal finance tools from their bank or credit union rather than a third party.Geezeo's original business plan was to provide personal finance tools directly to consumers. In a survey Geezeo conducted, it found that 80% of people, across all age groups, would rather get these types of tools from a bank or a credit union than go to a third party. This caused Geezeo to shift focus and concentrate on providing tools to banks and credit unions."There may not be enough push with Gen Y to get them to go out and seek a third party. You're more likely to get them to use the tool if the push comes from a bank or credit union."When Aite group asked Gen Yers about their familiarity with financial service-related Web sites, free personal finance site mint.com got higher rates than most of the other sites. Almost one in five were familiar with the site, and of those, almost half have been to the site and of those that had visited the site half said it was helpful.Stephen Bohanan, vice president and senior business consultant for financial services consultant CCG Catalyst, said that upbringing and education and the tools themselves are the two main reasons he thinks that Gen Y doesn't use budgeting tools."Gen Y is the first generation to be raised on credit. They were taught to spend as much as credit allows for so they can get it now and pay later. Budgeting is a life skill that you're taught to do, and Gen Y didn't learn it at home and they didn't learn it at school.""When these kids reach a college campus, the first thing they see are booths offering them credit cards. No one along the way is taking responsibility for teaching them this life skill of budgeting."Bohanan said that he thinks that 25% is actually a good number for the amount of Gen Y survey responders that use budgeting tools, but that there is always going to be a set of people that already budget and save. The issue, he said, is getting the people that don't budget and save to use the tools."Nearly a quarter of the people that file for bankruptcy each year are under 26 years old. That tells you that we have an issue of education and how critical budgeting and money management is as a life skill."The problem with the budget tools is that they facilitate people that are already in the budgeting mindset and don't get to people who haven't started budgeting, Bohanan said."Our culture is 'what's in it for me' and budgeting is like eating healthy, there isn't an immediate payback, so it's tough to sell to Gen Y."That's why integrating the tools into a consumer's everyday online banking practices is so important, Ward said. The member already trusts the online platform, and the credit union and the member are already accustomed to using the system.Overall, Geezeo has an average user age of 31 years old among both its bank and credit union clients, but Ward said the age drops as functionality is integrated."As more integration comes out, you will see more relevance in the statistics," Ward said.Bohanan said education and incentives to budget will help promote use. For example, he said credit unions could give discounts on rates if a member actively uses the credit union's budgeting tools.Bohanan also said targeting families and younger members around the age of 12 will help instill the budgeting state of mind."Have families come in and set up accounts for all the family members and offer prizes and awards for the kids that budget their allowance. If it is instilled in them growing up, then they won't have a problem when they get to be 20."Getting members set up with a budgeting tool at a young age can also benefit the credit union, Bohanan said. Typically, he said, credit unions lose members to bigger banks at the age of 18 when they go off to college because bigger banks have more branches and ATM locations. With technology and online banking, Bohanan said, there's not really a need to switch and if a member already has a budget set up at the credit union, they're more likely to stay with the credit union.–[email protected]