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· financial literacy,do not worry,financial benchmarks,tax deductions,taxes
A recent study found that nearly 9 in 10 Americans feel anxious about money.
April is National Financial Literacy Month, and so it’s a good time for all of us to gain more knowledge around money matters, to help to relieve financial stress.
Like most types of stress, this can impact your sleep, physical and emotional health, relationships, performance at work, and family life. Since financial stress occurs when there’s uncertainty and worry about the future or a lack of security, I want to first share with you one of my favorite spiritual quotes on how not to worry so much about money or anything else…
“Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they?"
- Matthew 6:25-26
Yes, it’s a Bible verse from the Book of Matthew. I take spirituality from many sources, and this one has always been one of my favorites. Although I don’t subscribe to a particular religion or church these days, I grew up Southern Baptist, and this particular verse has been one of my guiding mantras and what’s helped me to not worry so much.
In 2020, during the height of the pandemic I wrote the below, and I think it’s still very applicable in today’s economic ups and downs:
As a freelance TV producer, I would work on a show for a few months and then not work for a few months. I was fortunate to work most of the time, and when my friends and I had “time off” at the same time, we would go find the happy hours that also served food, so we could get a cheap meal with a drink. That's when most of my friends would ask me..."how do you not worry?" "How do you not fall into the 'I'll never find another job loop?'" I had never thought I was all that unusual, in my way of thinking, until my friends asked me those questions, and I have to say it's because of the above Bible verse. It's been my mantra, of sorts, a deeply held belief in a higher power that will take care of me and my needs. I always know that I will have enough. It's up to me to create the "more than enough" part.
This moment is one where our faith is being tested. One of my spiritual teachers says that when your worry list is a mile long, it means your faith is very small. When your worry list is very small or non-existent, it truly shows the strength in your faith.
So, if you have worries right now...about work and not having enough money, or even about not having access to food or toilet paper (OK remember when people were hoarding it?), it's time to give your worries over to a higher power. The birds do not need to store or hoard their food and nest building supplies, and so why should we? I would encourage you to write down your worries and then say a prayer and give it to God, a higher power, your angels or whatever you believe in because wouldn't your higher power be able to take on your worries and help you sooo much better than you?
I just want to remind you that if you can trust and have faith in a source that’s bigger than you, that your needs are always met.
Now, besides the spiritual, I wanted to also share some practical financial tips as well. The two go hand in hand because as I teach my clients and members of the Financial Freedom for Creatives Club, money is of this earth. We can’t take it with us, so we also need to do some practical work, and especially learn the ins and outs of what truly wealthy people know, so that we can empower ourselves.
Since taxes are due in the U.S. on April 18th unless you’ve requested an extension, I’ve put together a list of deductions for freelancers and small business owners. (Please know that this is NOT a complete list. There may be things in your particular industry that could be considered a write-off.) Just click on the button below to sign up to get the list AND some financial benchmarks you could measure yourself against.
Here are a few other more higher level things you may want to ask your tax or financial advisor about:
- Tax-loss harvesting: A strategy investors can use to reduce capital gains taxes owed from selling profitable investments. The strategy involves selling an asset or security at a net loss. The investor can use proceeds from a sale to purchase a similar asset and maintain the portfolio balance.
- Roth IRA conversions: If you’re likely to make a lot more money this year or in future years, but last year’s income was the lowest you’ve had, converting a traditional IRA to a Roth IRA now, when your tax rate is still relatively low, could be advantageous. A Roth IRA can help provide tax-free growth potential and tax-free withdrawals in retirement or for anyone inheriting your money, especially if they live in high-tax states like New York or California.
- Bunching charitable deductions: If you don’t need as many deductions because your salary wasn’t high enough to itemize deductions or you didn’t have a lot of charitable donations, it may make sense to wait and combine charitable donations in a year where either you’re in a higher tax bracket and need the deductions or when you have a larger donation to combine them all together.
- In-kind transfers: If you have a grantor trust, you may want to consider moving high-cost-basis assets into your trust and taking low-cost-basis assets of equal value out. Bringing those low-basis assets back into your estate will allow your spouse or children to "step-up" the basis of the assets to the fair market value when they inherit them, offering substantial savings on capital gains taxes.
With Love & Gratitude and Without Worry,
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