April 24, 2020
Take Care of Your Financial Wellness
When the world around you feels like it’s spinning out of control, it’s important to control what you can. And that includes your financial plan. “The antithesis to emotional decision-making is putting systems into place,” says Mariah Hudler, a financial therapist with Koru Financial Therapy in Sacramento, Calif. “There’s power in knowing your numbers and in being critical about the decisions you make about your money.”
Closely look at monthly expenditures and profit and loss statements, she advises. What can you change? Is there an opportunity to adapt, redeploy, or get rid of expenses? What other ways could you bring in income? What opportunities does this upheaval offer?
Both Hudler and certified financial planner Mari Adam of Mercer Advisors in Boca Raton, Fla., whose clientele includes independent contractors, say this is a time to hold on to some cash. And since the IRS and the U.S. Treasury have deferred the deadline for tax payments to July 15, Adam recommends keeping that money in cash so it’s available when payment is due.
Adam also recommends investing what you can. If you don’t already have an investment vehicle, she is bullish on the solo 401(k) for independent contractors without employees. “It gives you a higher contribution limit than other plans, and it’s free to set up,” she says. The IRS even allows you to include your spouse under this plan if he or she earns income from your business.