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If I Could Only Teach Three Financial Lessons

If I Could Only Teach Three Financial Lessons

April 09, 2021

Recently, I started working with many of my clients’ children from the ages of 23 to 35 and older. I enjoy working with this group of young people because we can start implementing good habits early. These good financial decisions lay the groundwork for a solid wealth management strategy and will set them up for success and financial freedom throughout their lives. Together, when we meet, we tackle all the different aspects of financial management, including budgeting, reducing debt, setting up an emergency fund, and the benefits of setting up a Roth IRA as well as taking advantage of their employers’ 401(k)s. 

Below are a few financial lessons that I try to impart to my young clients. This is the best general advice I can give to them as they are setting up their own wealth management plan. 

1. Budgeting Is Key To Building A Future

Budgets don’t have to be complex, tedious, or difficult to maintain. Different companies offer a litany of options that are perfect for young people to help them implement a budget. Mint, NerdWallet, Truebill, and Personal Capital are great tools for tracking all of your spending and financial data, including your bank accounts, credit cards, debt, and investments. Connecting your accounts to one of these apps will allow you to monitor your spending daily. 

Additionally, many of these tech resources advise their financially savvy users to implement a 50-30-20 budget, which allots 50% of your income to your living needs, such as housing, groceries, and bills; 30% to your discretionary spending, including vacations, dining out, hobbies, and other interests; and 20% to your financial goals, which include savings and retirement contributions. This strategy is key when implementing a healthy budget. 

2. Start Saving Early 

I often advise my younger clients to get into the habit of saving often and early because saving money is crucial to any wealth management plan. Your savings don’t have to sit untouched in a savings account; I often advise young people to invest in accounts that have a compounded interest, meaning that an investor earns interest on the initial investment in addition to any interest the investment collects. If you start putting away $100 each month into an S&P 500 fund when you’re in your 20’s and don’t touch it, it will be worth over $1 Million dollars by age 65! Your total contribution would amount to $51,000 of your total portfolio value. 

3. Understand Different Retirement Funds 

It is really important for young people just starting out in life to understand what a potential employer offers for a retirement benefit and what to look for in retirement plans when they are job searching. Typically, employers offer a 401(k), which allows employees to contribute a certain amount of their paycheck to retirement pre-tax. This can help the employee reduce their income taxes by lowering their tax bracket. Oftentimes, employers can make matching contributions to the retirement plan, which helps the employee save for retirement. Because these contributions are not taxed, they will be taxed when you withdraw them. 

Contributions to a Roth IRA, on the other hand, offer tax-free growth and tax-free withdrawals in retirement. This is because Roth IRA contributions are made with after-tax dollars. If you are covered by an employer’s retirement plan, you can still contribute the maximum amount to an IRA as long as you don’t exceed the IRS’s income limits. For the 2020 and 2021 tax years, you can contribute up to $6,000 if you are under age 50. 


Regardless of your current financial situation, together we can discover the right financial tools and strategies to get you where you need to be to develop a healthy wealth management plan. Email me at or give me a call at 916-276-8677 to see if I am the right fit to help you pursue your ideal financial future. 

About Jim

James Callens is a financial advisor at GLH&C Financial Services, a full-service, comprehensive wealth management firm. Jim has over 30 years of experience in the financial industry and uses his extensive resources, knowledge, and experience to help his clients experience simplicity and clarity in their financial life. Jim spent over 20 years working for GE Financial Advisors, both in their insurance services department and as a regional manager and financial advisor. He took part in GE’s Six Sigma Quality Training program and completed the National Association of Life Underwriter’s four-year LUTCF course. Jim also earned his certificate in financial planning from the University of California at Davis. In 2011, Jim combined his own firm, Callens Financial Group, with GLH Financial Services, creating GLH&C Financial Services, so he could provide even more value to his clients. 

Jim is a member of the Financial Planning Association of Northern California and National Association of International & Financial Advisors (NAIFA). He has served as a board member of several nonprofit organizations and has been involved in Cub Scouts leadership and youth sports coaching. Jim lives in Folsom, CA, with his wife, Melissa, and his four children, Jacob, Kristen, Grant, and Andrew. Together, they enjoy outdoor activities such as kayaking, bicycling, and vacationing at Lake Tahoe. To learn more about Jim, connect with him on LinkedIn.