- Financial planner Anna N’Jie-Konte and Vice President of Fidelity Investment’s Young Investors for Personal Investing Kelly Lannan sat down with Business Insider’s Tanza Loudenback to discuss managing money in uncertain times during the Master your Money Live Digital Bootcamp.
- The two experts had three main suggestions: Make a financial plan if you don’t have one, adjust the one you have if you need to, and invest consistently to weather the storm.
- Watch the video of the event below.
- This article is part of a series focused on millennial financial empowerment called Master your Money.
Personal finance correspondent Tanza Loudenback sat down with two financial professionals to talk about financial planning, investing, and managing money during the first Master your Money Live Digital Bootcamp.
Financial planner Anna N’Jie-Konte of Dare to Dream Financial Planning and Vice President of Fidelity Investment’s Young Investors for Pe
rsonal Investing Kelly Lannan have three pieces of advice for anyone wanting to work on their overall financial picture right now.
1. If you don’t have a financial plan, now is the time to make one
Both experts agree that having a financial plan is the key to weathering a recession and continuing to work towards your goals consistently.
In its most basic form, a financial plan consists of taking stock of your situation. “Know where everything is and know who you owe, what you owe, and what you own,” N’Jie-Konte said. Then, focus on looking forward. “Having a concrete set of goals and an
action plan to get there is what’s really important,” she said. “I think a lot of times we can kind of coast along with our finances … without acting with intentionality, we can shortchange ourselves.”
N’Jie-Konte says budgeting apps can be a great place to start working on a financial plan if you’re looking to make one yourself. “I am a big fan of tracking apps because I think they do two things. One, they force you to know where all of your accounts are, where your debts are. Then, it can do account aggregation and pull those transactions for you so that you have a good idea of where your money’s going as well.”
2. There’s no right or wrong time to invest if you’re looking to build long-term wealth
Investing right now should be about working towards your long-term financial goals rather than trying to find deals in the market. Lannan said that one of the best ways to do it right now is by creating automatic, recurring deposits to an investment account.
“Automatic investments are a really powerful way to both get started as well as continue,” Lannan said. In some ways, this investing strategy can take the pressure off. “You have more time to take advantage of compounding, and you also don’t necessarily run the risk of trying to time the market.”
Timing the market is “something that we can never do,” Lannan said. “We have some of the smartest people in the world working at Fidelity, and they can’t do that. You never want to try to time the market because not only can you miss out on some opportunities for compounding growth, but you could also open to yourself up to risk,” she said.
Automatic investing is an easy way to implement a strategy called dollar-cost averaging, where money is put in consistently over time instead of invested irregularly in lump sums. With this strategy, money can grow more consistently through the market’s ups and downs.
3. You can — and should — adjust your financial plan
As the coronavirus pandemic and its economic impacts continue, your financial plan and goals might change. Lannan said that keeping yourself open to changing your strategy is critical.
“If you have an unexpected expense or you spend more than you intended to, we don’t want that to derail you from your budget,” Lannan said.
If you do face a big change to your financial situation, don’t scrap your financial plan altogether. Instead, N’Jie-Konte recommends adjusting it.
“Look at whatever your goals and your priorities are. Some of those might have shifted, like travel, and that’s something you can cut.”
“These times give people the opportunity with a plan to reevaluate it,” Lannan said. “Because creating a plan is not just like a one-and-done thing.”
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- Read more from Master Your Money:
- A New Jersey couple who saved over $50,000 in case of emergencies says automatic transfers are the key
- How to make a plan for your goals, no matter how big or small
- 11 tips from Business Insider’s Money Council for creating a financial plan to reach your goals
- How the American millennial is overcoming debt, the dollar, and the economy they were handed
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