CPA Expert Lahteefah Parramore Discusses Managing Finances During Massive Layoffs

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The print, digital, and broadcast media industry is experiencing significant layoffs and cutbacks, reports Forbes. Lahteefah Parramore offers some financial tips for those navigating the dismal terrain of unemployment. Leaning on her 15 years of experience working as a CPA at Ernst and Young, she found INQUE Management, a consultation firm located in Miami, New York, Beverly Hills, Atlanta, and Los Angeles. “God really put it into my heart to help people in the arts, help creators, and help independent contractors really scale their businesses and see how they can make money, and protect their money, and build their wealth,” said Parrmore to Bombshell By Bleu. “Everybody doesn’t understand financial statements. Everybody doesn’t understand taxes. But that’s why I’m here.” Parramore is considered a trusted expert in accounting in the entertainment industry who specializes in “business management and CFO services; her clients include nationally and internationally known athletes, creatives, entrepreneurs, record labels, and groups working for positive social change.” She educates her clients on advancing their financial literacy, personal accounting, supervising and increasing cash flows, investing, and money management.

Yolanda Baruch: What financial tips can you give those navigating layoffs, and how should they manage their finances after a layoff?

Lateefah Parramore: With great tragedy always comes opportunity. Everyone should be trying to pivot from whatever job, financial situation, or status they were in, especially from a corporate perspective. For people that were laid off, there are a couple of critical components; the first thing that they need to do is take some time to quiet their minds. Take some time to form peace; you can’t have faith and fear simultaneously. Realize that the situation is temporary because financial health is connected and tied to emotional stability and health. I have learned over my 20 years of doing this that when I have clients that are emotionally down, depressed, or just experiencing turmoil, it directly impacts their financial life. Right. I would recommend that people take time to find a little bit of peace and little more faith. Second, when someone has been living off a financial level, whether they’re making $20,000 a year, six figures, or more a year, many people have had to downsize drastically. So, when you reduce at such a rapid rate, sometimes it’s hard to crawl out of that, so to speak.

But everyone needs to assess their monthly spending and the necessary bills. They need to determine if the features on their cell phone bill or insurance can be changed to save money. Many of us have many different types of apps, like Netflix and all of these other platforms, charging you. Can you consolidate your entertainment and bills? Every dollar adds up, and that’s why one of the first things I mentioned is having a clear head because once you have a clear mind space, you can sit down and do an accurate budget. Also, look at your network of people, family, and the resources they have access to, and see how you can cross-fusion items like financial resources; you’ll be surprised there could be a barter system component within your family friends network.

Baruch: How can people diversify their income?

Parramore: Now is the time for people to take a moment to diversify their revenue. Many people say you should have seven income streams by having passive income. What do I mean by that? My active income is from business management, accounting, and tax filing. That’s what I do every day; that’s my income stream. But I also have invested in real estate and investment trusts, so I have a company specifically for real estate holdings. In many instances, it provides monthly cash flow or even dividends. In addition to that, I have another business that invested in a franchise; I don’t run the franchise daily, there’s an entire team that runs it, but I receive royalty payments from that franchise. People can sometimes get overwhelmed with the pressure of having more than one resource of income without knowing how to do it. One of the things that I encourage my clients to do is maximize the income potential of what they do. If you are someone like me, I’m a CPA. I do planning, business management, review contracts, and negotiate through these things. The next level for me is sharing my knowledge, which is why I wrote a book to help people understand taxes, share tips on royalties and rights, and I could teach some online classes. From there, I could create a, you know, some ecosystem where people can share knowledge. I can even make my version of a calculator, pencil, and accessories, items that you need as a startup entrepreneur to be successful from an accounting perspective for your business. It’s just maximizing the potential of the business that you’re in, which is a few examples of how individuals can diversify their income.

Baruch: What should individuals do if they can’t meet their financial obligations?

Parramore: People can consider starting a business, look for grants, and seek out SBA funding to pivot in earning revenue differently. Suppose many people can’t meet their financial obligations once they go through their budget, see what their financial picture looks like, and cut the fat of anything unrelated to housing or food. In that case, they also need to call anyone they have financial obligations for, and many of those companies will provide three months where they don’t have to pay and add those three months to the back, like with car notes and some mortgages. You add those payments to a later time or extend the due date of the obligation. Then some may not be able to pay, and they’ll have to contact the people, let them know this is the financial situation, and have open conversations with those companies. You will be surprised some will take the time and provide guidance. As I said, tragedy turns into opportunities and now is the time to think about the chance you want to manifest for yourself.

Baruch: For those laid off and they’re trying to find a new job, how should they utilize their savings? Should they dip into their 401k to stay afloat?

Parramore: That’s an excellent question. If they have to, but with the extreme market fluctuations, many people’s portfolios have lost 20-30%. You will suffer significant losses if you take money out of your 401k. In the last case scenario, or if they had no other means, liquidate or reach your 401k. I think it would be best to do a rollover. But if they had to, because of the losses and the political climate we’re currently living in, I would wait for the stock market to settle a bit.

Baruch: How can people right now protect their finances?

Parramore: I would say protecting their finances is a vast picture because people can have money in the bank money and CDs like you mentioned 401k; for things like that, if they have their money invested, they need to do thorough research before liquidating any investments, do an assessment to determine how much they could potentially lose. They also need to look at different tax structures. Let’s say they’re a sole proprietor with an LLC; an LLC may not be an entity that best serves them in this climate; they may need to switch to an S-Corp because they wouldn’t be paying self-employment taxes. Once they look at their budget and switch to more of an emergency budget system, they need to look at all of their investments, whether complex investments or investments in the market, to determine what the risk would be before they take it out. Then they need to look at their tax structures. For instance, a lot of times, people can pay more tax if they have corporate jobs as a way of getting money back at the end of the year; they overfunded their taxes and need to make sure their tax return is done as soon as the year-end, and that will be some financial cash flow that they will be able to receive. But they also need to look at their current tax structure to determine if that’s the best structure they should have, whether it’s them personally or their business.

Baruch: How should individuals plan their budget?

Parramore: They should start with a review of the last 12 months’ actual results, then eliminate non-planned spending to less than 1% of the overall budget, write down financial goals for five years, and create accounts for saving, investing, and one for their goals. Then review and budget monthly and be honest.

Baruch: What financial disparities do Black Americans face, and how can they improve them?

Parramore: Financial disparities are a result of our broken homes. Parramore: The foundational financial tools that should be implemented. Stop waiting for the perfect house – purchase a multi-family property with friends as an investment, buy land, and use credit as a wealth tool, not as a debt tool. How can we focus when we don’t eat well, don’t pray, don’t have family time, or don’t work out when we don’t have accessible business executives or mentors accessible? Wealth is a mind, body, and soul.

Baruch: How can financial literacy lessen the Black-White wealth gap?

Parramore: Every generation wouldn’t have to start from zero. Looking at insurance policies as startup money for the next generation would take the morbidness out of it. We need to create an estate to remove the burden from the next generation. If we empowered the people we love by allowing them to make decisions on our trust or estate instead of leaving those decisions to people, like a judge or state lawyer, that don’t know us – we would close the gap significantly.

For more on Lahteefah Parramore, follow her on Facebook and Instagram.

This interview was edited for length and clarity.





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