No matter how hard you may have tried to teach your children about money, our Millennial generation offspring--now youths and young adults--are facing financial failure, says author and personal finance expert Alice Wood.

“So many of our estate planning clients have told me their children are bad with money,” says Wood, author of Wealth Watchers: A Simple Program to Help you Spend Less and Save More (Free Press, Jan. 2010). As an estate lawyer, she has worked with more than a thousand families over the years who are hoping to leave money to their children.

“Why are young people so confused?” she asks.

The answer, she believes, is due in part to three trends that thwart an understanding of our own personal finances. Together they have made it more difficult for all of us, not just the younger generation. But most of today’s youth have never lived in a time when their personal finances weren’t ruled by:

Impersonal fee driven corporate banks

Loose lending standards

Access to Plastic without any guidance

Branch banking. Wood is the daughter of a bank president from the pre-branch banking era and was one of seven children. “I grew up not knowing that being a bank president was a good job,” she says, “because we lived so frugally. One time my father just about had a stroke over a bill from our local department store. There were multiple bra purchases and my mother had to remind him that they had five daughters.”

But seriously, she adds--speaking Wednesday at a dinner meeting at the Woman’s Athletic Club of Chicago--before the 1994 Riegle-Neal Interstate Banking and Branching Efficiency, bank presidents knew their towns and its residents. If they did not handle people’s money properly, they might hear about it at church, or at Rotary, or at the golf course.

“There are many fine bankers out there still,” she says, “but I worry that big banks are all about transactions and fees and less about relationships.”

One way that advancements in the financial services industry have hurt young people, she asserts, is their tendency to accumulate large overdraft fees.

“Teenagers and young adults today use credit or debit cards for almost everything, but before the last round of bank reform, they were allowed to overdraw their bank accounts or exceed their credit limits ‘as a convenience,’” she said. “And then the banks charge an overdraft fee. I’ve talked to students who have had more than a hundred dollars in overdraft charges because they didn’t understand how important it was to know their balance and to cover any shortfall as soon as possible.”

They make the mistake of checking their balance at an ATM and they think that balance is accurate. They don’t know there can be a lag between the time they make a purchase and when the bank actually takes that money from their account.

Some merchants post a transaction right away while it may take a couple of days for other transactions to be deducted from an account. It’s no wonder young people are constantly making mistakes. They haven’t been taught to keep track of their spending so they know where they stand on any given day.

That, Wood says, just would not have been kosher during the pre-branch bank era. Community bankers seemed to take a more paternal role when it came to banking. Making money on people’s mistakes was not part of their business plan.

Changes in lending. Those who did not apply for a mortgage or loan during the past 10 years or so may have been unaware of sweeping changes in lending – changes that led to our current economic collapse.

Prior to the past decade, borrowers needed to have collateral, make a substantial down payment on their purchase themselves, and provide proof of income and stability. All those safeguards were swept aside but nobody told us. Older parents would never have dreamed their children would buy homes they couldn’t afford because they were operating under the old rules where you had to qualify for a loan. By the time they found out that their children were about to lose their homes in foreclosure it was too late.

“Parents don’t always ask a lot of questions of their adult children about their personal finances,” Wood says. “If a young adult says she has gotten a loan, the parents might assume that she can afford it. But that can be far from the truth.”

“And look at where the loose lending standards got us,” she says. “It sends a mixed message to young adults who don’t understand what it means to qualify for credit, or why it’s probably not a good idea to have most of their income going toward debt.”

Plastic. Credit and debit cards are convenient, but they have made mindless spending way too easy, Wood says. “Why do we spend more money when we use plastic? Because we can.

“The plastic industry is here to stay and we can’t function in today’s society without it. But it seems to have given us such a disconnect from our own money,” she says. “It doesn’t look or feel like money. The card doesn’t disappear when your bank account is overdrawn. In the old days, our parents paid for things with cash or checks. When they ran out of cash or their bank balance was too low they had to quit spending. With credit cards, you never feel like you have run out of money. You can spend and spend and spend.”

Wood’s organization, Wealth Watchers International, is on a mission to change the way the world looks at money. “We help people set and track a daily goal for spending and saving so they can understand down to the day how much money they can spend without going into debt.” We shouldn’t blame a bank if we overdraw our account. It’s up to us to keep track of our spending, even if it means doing something as simple as writing down everything we spend.

Fortunately, says Wood, her organization, Wealth Watchers International, has a new iPhone application that is perfect for young savers, who tend to be technologically adept.

The app, called “Wealth Watchers,” can currently be downloaded for free to an iTouch or an iPhone from the iTunes store. A key to the Wealth Watchers program is having a daily goal for spending and saving. When you spend money, you note it in the phone app. If you go over your daily limit, the application gives you a bright red arrow pointing down. If you live within your means that day, you get a green, upward-pointing arrow. The program calculates how much debt or savings you can accumulate by the end of the year based on your daily spending.

“Getting that red arrow just gives me a stomach ache,” she says. “Having that visual indication of how you are doing is extremely helpful, and I will do almost anything to stay away from the red arrow.”

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Alice Wood is an estate and probate attorney and a mother of three. She and her family live in Naperville, Illinois. Her inspiring Wealth Watchers program is detailed in Wealth Watchers: A Simple Program to Help you Spend Less and Save More (Free Press, Jan. 2010). For more information go to www.eWealthWatchers.com.