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Understanding and Protecting Your finances

**Investment Overview Article One

“Millennials are old enough to have been negatively affected by the Great Recession. But we’re also young enough to still be early to mid-career still when the COVID-19 pandemic hit,” says Ana Hernández Kent, a Policy Analyst at the Federal Reserve Bank of St. Louis. “What this means is that we were economically vulnerable going into the pandemic – more so than older generations.”

In such a volatile environment, it’s important to have a back-up plan. Meaning, have about six months worth of reserve in your savings (or under your couch), in case things really do get worse. It’s also important to reorganize your budget and place all nonurgent purchases aside. Having a plan that’s written out keeps you focused and on track and will immensely prepare you for the future.

So how do you have a game plan? We’ve compiled a list of the top four best ways to protect your assets and take care of your future. Here they are:

  1. Know What’s Behind Your Financial Decision: Before you start creating a budget, or trying to organize your finances in whatever manner possible, you have to know and understand what carries the most value for you. Is it saving up for next semester’s tuition, or a fancy new car? At the end of the day, it comes down to prioritizing what you need over what you want, and sometimes that means walking right by the Prada dress on the mannequin.
  2. Know Where Your Money Goes: This should be almost second nature. Every penny needs to be monitored. If that means having one account to just pay bills and having another for “fun”, then separate your funds. However, creating an excel spreadsheet or using budget tracking apps can help organize the thoughts behind your finances.
  3. Review and Reduce Your Debt: This includes credit card debts, student loans, or even auto loans. It’s always best to pay more towards your loans if you can, and make your payments on time. The last thing you would want to do is accrue more interest on what you’re already paying for. This also means monitoring changes that banks may make to your credit card limits. Debt consolidation is always a good option to make paying on your debts a little less of a burden.
  4. Build A Strong Credit Score: We cannot emphasize this enough. Your credit score matters, and it always will. Especially when you are applying for a loan or are wanting the new American Express Gold Card. Many institutions are looking at your credit history such as payments, delinquencies and so forth. Your credit score will not only pave the way for your future, it will provide a safety net as well.

Once you have your finances organized and tracked in a manner that makes sense to you, you can then branch out into different areas such as investment options.

As always, do your research and don’t hesitate to reach out to a financial professional if you’re curious as to how to manage your finances better.

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