financesforeveryday.com

This blog is being written by Gerri A Harrison CFP EA.  As the designations indicate I am a certified financial planner and an enrolled agent.  For those of you not familiar with it, an EA designation is given out by Internal Revenue Service after passing a four part test specializing in taxation.  I became an EA in 1989 and a CFP in 1999.  I own a small business which deals in multiple areas of personal finances.  I am in the process of getting my masters degree in personal finance.  My true passion is assisting people in improving their financial lives.  So – whether it is cash flow, debt management, financial planning, insurance, taxation or the many other areas of personal finances I think I can offer some help.  Like any advice from a financial professional you need to look at it and determine if it is applicable to your situation.


We are all capable of becoming millionaires.  Your first reaction might be, not me.  You do not know my situation.  I do not need to know the particulars of your situation.  Individuals earning no more than $25,000 a year have done it.  You can do it.  What it takes is learning to live on less than what you make.  Taking that difference and at first start by saving.  And second, by investing wisely.  For some that might mean being able to invest $500 a month – that means they will get there quicker.  For others, it might mean being able to initially only invest the change out of your pocket every night.  That means it will take longer to get there, but you can get there.

So – where do you get the money to start investing?  First step - start tracking your expenses.  You cannot know where to cut your expenses if you do not know where your money is going.  It does not matter if you use personal financial software or a spiral notebook.  For several months you need to figure out where every cent is going.  Then gradually make changes in the areas where you feel you are spending too much money.  Maybe it is too much money eating take out.  Maybe it is too much money at the grocery store.  Maybe it is too much money for clothes.  Maybe there are ways that you can cut the amount you are spending on insurance without reducing coverage.  Everything should be suspect.  I am not saying that you have to give up your morning cup of coffee on the way to work if that is what gets you going in the morning, but you need to become more conscious of how money is being spent.  Then decide if the value you are receiving is worth it or if you would rather spend that $5 another way.