Beginning To Invest? Finance Experts Layout Pivotal Principles
By Makula Dunbar
Money matters such as earning and spending are easy concepts that those most far removed from finance careers understand. Though, in the middle ground – where organizing money, planning, strategizing and saving comes into play, many shy away. Coincidently, it is the combination of these practices – investing especially – that separates the wealthy from those who struggle at some point financially.
For African American women, understanding, most importantly jumping on the bandwagon – and taking the first steps toward investing – is a major contributor of living comfortably in the future. Simply put, investments can be any account, savings plan or fund set up to generate future wealth and stability.
Budgeting and Preparing to Invest
“I think the first piece of investing is saving an emergency fund. Somewhere between three to six months of your regular expenses,” says Janet Stanzak, a certified financial planner at Financial Empowerment. “It’s a cushion to have when things come up. Beyond that investment is a retirement plan.”
When Harrine Freeman landed a job just after graduating, an individual retirement account (IRA) was the last thing that she was considering. By the time she was a senior in college, she had overused 13 credit cards and garnered $19,000 in debt.
“I didn’t know who to go to or where to turn. I decided that I wanted pay off my debt, but it was a struggle because the creditors didn’t want to accept the payment I was providing,” said Freeman, now a financial counselor and founder of H.E. Freeman Enterprises.
“They sent the check back and I’d send it right back. Through my persistence they saw that I truly wanted to pay the debt back and after five months they decided to work with me. I put myself on a strict budget and I was able to pay it off in four years.”
Minimizing her expenses to just rent, debt and groceries, Freeman eliminated shopping, eating out and all other fun from her activities.