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2022 was supposed to be my year. Covid-19 was fading, our mom-and-pop video production business had its best year ever in 2021 and this year was supposed to be even better. After spending 17 years building a solid and reliable client base, we were finally hitting our stride. I was also developing healthy habits, like working out and eating healthier. Then during a routine checkup, my doctor mentioned that I missed a few years of mammograms during the pandemic and that I should go for my screening. I didn’t think anything about it; no one in my immediate family had breast cancer. I did the test and forgot about it. Several days later the health portal app pinged on my phone that my test result was in. I popped it open and found I needed to do an additional screening.
After the follow-up test, I was ushered into an ultrasound room. The radiologist then spoke to me with a grim look, saying they believed I had a malignant tumor and I needed a biopsy ASAP. Two biopsies, a contrast dye test that made me break out in a whole-body rash and so many appointments with too many doctors later, I was diagnosed with stage 1A invasive ductal carcinoma. I had the tumor removed and a bilateral reconstruction, and now I’m on the road to recovery. Thankfully, we caught it early. All the costs ($100,000 and mounting) were covered by our company’s medical policy, and we have enough cash in the bank that I comfortably took a couple of months off from working on our business.
But if this was 15 years ago? I don’t think we would have made it. We would have faced paying for my care on credit cards or applying to hospitals for charity care. Neither are good solutions. As entrepreneurs, it’s important we take time to create a plan in case of emergency situations, such as a medical crisis that could impact our work and health long-term. Based on my experience, here is how you as a business owner can approach creating a safety net.
Pay Yourself and File Taxes
Entrepreneurial TV shows praise contestants when they say, “I haven’t paid myself in 5 years,” like that is some great virtue. It’s not. If you don’t pay yourself, then you are not paying into FICA, which is a federal payroll tax aimed at providing support for retirees and people with disabilities. Once you quit a traditional job and start your business, you have 10 years from the last time your wages contributed to FICA to apply for Social Security Disability if you need it, and you must contribute before you’re eligible. No one wants to go on disability but what if that’s your last resort? Also, when you reach retirement age, do you want a huge gap in your wage averages, so you get fewer Social Security benefits?
Put Your Oxygen Mask on First
It’s hard to put money away when you are building a company or skating through a rough quarter. Your business is your baby. You want to nurture it, encourage it and make it grow, which means investing every penny. But if you go down with no oxygen mask during a health crisis, your baby isn’t going to make it. I recommend you challenge yourself to put away money in a tangible account every single month and don’t touch it unless you absolutely must.
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Consider Opening a Retirement Account
I waited until I was 40 to open an IRA. Before I started my business, my employers didn’t offer retirement benefit programs. That means I missed close to 20 years of contributions that could have lowered my yearly tax burden and 20 years of growth. Just like putting money away for a rainy day in a savings account, putting money into a retirement account can be just as important for a business owner. Depending on the type of account, you may be able to withdraw without penalty during a health crisis.
Survey Your Health Insurance Options
It’s common for entrepreneurs to skimp on health insurance for themselves. All of us hope the unthinkable won’t happen so we just push it off. Don’t fall into this trap. Make space in your monthly budget, look at all options like a PPO, HMO or HSA and see what works for you. We opted for an HMO a few years back — it has saved us quite a lot in premiums and co-pays, and it paid for my health costs with few issues. Even if you are young, it can be helpful to prepare for a crisis at any point in your life.
Don’t Skip Regular Checkups
A brand-new car needs an oil change every three to six months. Your body is the only machine you’re going to get. I skipped two years of screenings because of the pandemic and then ended up with cancer. When you work 18-hour days on your business, it can be hard to find time to prioritize your needs. Would you never take your brand-new car into the shop for regular maintenance? No. Don’t neglect yourself.
Calm Your Anxiety
I experienced crippling anxiety after receiving my cancer diagnosis. It would have been much worse if I didn’t set things up years ago to make this blip in my life easier to cope with. Hopefully, you will never face a crisis like I am, but if you do, a sound plan can help calm your anxiety and help you over the hurdle. Your baby needs you to be at your best!
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
