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December 20, 2010 L.A. Times Money Makeover
Free-spirited actress needs to focus on material things
Tamika Lamison, who has worked sporadically over the years, now has a full-time job at a museum. But she has no health insurance and is in default on a student loan.
MONEY MAKEOVER
Tamika Lamison is a show business triple threat — actress, writer and director. She has appeared on television shows and commercials, written short films that have gotten awards and appeared in numerous plays, including the long-running "Shear Madness" at the Kennedy Center in Washington.
But like many in the field, Lamison, 41, has worked sporadically over the years, and her income has fluctuated wildly. She has sometimes lived off unemployment benefits, and one year her income was only $12,000.
But like many in the field, Lamison, 41, has worked sporadically over the years, and her income has fluctuated wildly. She has sometimes lived off unemployment benefits, and one year her income was only $12,000.
It has been a struggle, but Lamison stuck to it. "I was always on a carousel of working for three months and then being unemployed," Lamison said. "It was stressful. But I wasn't interested in the alternatives."
Until she hit her 40s.
Lamison recently landed a full-time job outside show business — she's working as a gallery educator for the California African American Museum. "For some reason, when I turned 40 years old, my left-brain, Virgo side kicked in," said Lamison, laughing and casually flipping a bright green and yellow scarf over her shoulder. Her patchy financial past, however, has followed her. She is in default on a student loan that started out at $5,000, but with unpaid interest has mushroomed to $15,000. She has $10,000 in savings, but none of that in retirement accounts. And she has no health insurance.
Saving and preparing for the future does not come naturally to Lamison. "One of the hard things about being an actor is that we're taught to be in the moment," she said, "and it's sometimes difficult to think about the future." But it's time for her to quit ignoring the financial bind she's gotten herself into, said Jennifer Hartman, a certified financial planner with Greenleaf Financial Group in Los Angeles who reviewed Lamison's finances.
The museum job is a good first step.
"At her age she can't just get by living on $12,000 a year anymore," Hartman said. Overall, this will be a relatively good year for Lamison. She'll earn about $45,000 in her new job and $5,000 in residuals from appearances in television commercials. Nibbling on fries at a Chick-fil-A fast-food restaurant during a two-hour lunch meeting, Lamison listened to Hartman tell her she needed to use her income to repay her student loan, create an emergency savings account, stash money away for retirement and get health insurance.
It's a big undertaking, but Hartman noted that Lamison had shown persistence in the past. Even when down on her luck financially, Lamison founded the nonprofit Make a Film Foundation to give children with life-threatening illnesses a chance to make short movies.
"You're a strong-willed and determined person," Hartman said. "You need to put those qualities toward your finances." Getting Lamison to focus on money will take an attitudinal shift. Free-spirited and ethereal, Lamison — who either wears a fedora or her hair in pigtails — has not been much concerned about material things. She has to think for a while before naming the make of her car (a used Dodge Stratus). She doesn't have credit cards, at least partly because she couldn't get credit while in student loan default. She also didn't file her income taxes for five years.
Recently, Lamison asked a friend to help her with her taxes. Luckily she owed only $200. Lamison said that information about finances "never stuck to her," adding that her father tried unsuccessfully to teach her about money management. Her mother was horrified when Lamison, as a college student at American University, switched her major from journalism to performing arts. "My mother is still worried about me," Lamison sighed. Even with the money she has managed to save, Lamison has taken risks. Recently she invested $5,000 in an upcoming one-man play staring Tom Sizemore, who is trying to resurrect his career after a bout with drug addiction.
"That should not be considered an investment," Hartman said. "If it pays off, pat yourself on the back. But that's like going to Vegas." Instead, the planner said, Lamison needs to focus on the long-languishing student loan. "She needs to take the bull by the horns and pay off that debt," Hartman said. Hartman advised Lamison to contact her lender and try to renegotiate the amount she owes or get on a payment plan. Any extra income she earns from acting in commercials, as well as $100 a month from her museum salary, should go toward paying down the student loan.
The planner told Lamison to develop a household budget and pare her already low expenses. Lamison pays $1,000 a month for rent and spends about $400 on food. She rarely buys new clothes. "You now have the opportunity to make decisions with your money," Hartman told Lamison. "The question is, which way will you go?" Hartman told Lamison that after paying off the loan, she needs to create emergency savings that are equivalent to 12 months of her income.
"People in the entertainment business need to have bigger emergency savings because they can go for long periods without employment," Hartman said. While she establishes the emergency savings, Lamison needs to start saving for retirement. As much as 20% of her income should go into a money market account that is set up in a Roth IRA. In a dire situation, that account could be used as an emergency fund because Roth IRA contributions that are withdrawn before retirement age aren't penalized (earnings on that account, however, may be penalized if withdrawn too early). Once Lamison has sufficient emergency savings, the IRA could be instead invested in a mutual fund that has a mixture of 60% stocks and 40% bonds.
Getting health insurance is crucial too. "It's not real to her how fast things can go bad," insurance broker Bonnie Milani said when asked about Lamison's situation. "The hospital will save your life. Then it will ruin it financially if you can't pay your bills."
A high-deductible plan covering catastrophic illnesses as well as annual physical exams would cost Lamison about $165 a month, Milani said. But Lamison balked at buying health insurance. Despite her recent fast-food lunch, she said, she takes care of herself by eating right and exercising. Nonetheless, by the end of the meeting Lamison said she might look into a healthcare plan.
One thing she will definitely do is make good on her student loan. "I want to get that monkey off my back," she said. Overall Lamison, who wears a pendant inscribed with the word "Hope," is optimistic about reordering her finances and her future. Her job at the museum gives her some freedom to pursue other opportunities to earn money. She recently went on an audition for a national Toyota commercial. And there are prospects for her to eventually draw a small salary from her nonprofit foundation.
"All possibilities are in flux," Lamison said.
Do you need a money makeover? Each month the Sunday Business section gives readers a chance to have their financial situations sized up by a professional advisor at no charge. To be considered, send an e-mail to makeover@latimes.com. You also can send a letter to Makeover, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. Include a brief description of your financial goals and a daytime phone number. Information you send us will be shared with others.
Until she hit her 40s.
Lamison recently landed a full-time job outside show business — she's working as a gallery educator for the California African American Museum. "For some reason, when I turned 40 years old, my left-brain, Virgo side kicked in," said Lamison, laughing and casually flipping a bright green and yellow scarf over her shoulder. Her patchy financial past, however, has followed her. She is in default on a student loan that started out at $5,000, but with unpaid interest has mushroomed to $15,000. She has $10,000 in savings, but none of that in retirement accounts. And she has no health insurance.
Saving and preparing for the future does not come naturally to Lamison. "One of the hard things about being an actor is that we're taught to be in the moment," she said, "and it's sometimes difficult to think about the future." But it's time for her to quit ignoring the financial bind she's gotten herself into, said Jennifer Hartman, a certified financial planner with Greenleaf Financial Group in Los Angeles who reviewed Lamison's finances.
The museum job is a good first step.
"At her age she can't just get by living on $12,000 a year anymore," Hartman said. Overall, this will be a relatively good year for Lamison. She'll earn about $45,000 in her new job and $5,000 in residuals from appearances in television commercials. Nibbling on fries at a Chick-fil-A fast-food restaurant during a two-hour lunch meeting, Lamison listened to Hartman tell her she needed to use her income to repay her student loan, create an emergency savings account, stash money away for retirement and get health insurance.
It's a big undertaking, but Hartman noted that Lamison had shown persistence in the past. Even when down on her luck financially, Lamison founded the nonprofit Make a Film Foundation to give children with life-threatening illnesses a chance to make short movies.
"You're a strong-willed and determined person," Hartman said. "You need to put those qualities toward your finances." Getting Lamison to focus on money will take an attitudinal shift. Free-spirited and ethereal, Lamison — who either wears a fedora or her hair in pigtails — has not been much concerned about material things. She has to think for a while before naming the make of her car (a used Dodge Stratus). She doesn't have credit cards, at least partly because she couldn't get credit while in student loan default. She also didn't file her income taxes for five years.
Recently, Lamison asked a friend to help her with her taxes. Luckily she owed only $200. Lamison said that information about finances "never stuck to her," adding that her father tried unsuccessfully to teach her about money management. Her mother was horrified when Lamison, as a college student at American University, switched her major from journalism to performing arts. "My mother is still worried about me," Lamison sighed. Even with the money she has managed to save, Lamison has taken risks. Recently she invested $5,000 in an upcoming one-man play staring Tom Sizemore, who is trying to resurrect his career after a bout with drug addiction.
"That should not be considered an investment," Hartman said. "If it pays off, pat yourself on the back. But that's like going to Vegas." Instead, the planner said, Lamison needs to focus on the long-languishing student loan. "She needs to take the bull by the horns and pay off that debt," Hartman said. Hartman advised Lamison to contact her lender and try to renegotiate the amount she owes or get on a payment plan. Any extra income she earns from acting in commercials, as well as $100 a month from her museum salary, should go toward paying down the student loan.
The planner told Lamison to develop a household budget and pare her already low expenses. Lamison pays $1,000 a month for rent and spends about $400 on food. She rarely buys new clothes. "You now have the opportunity to make decisions with your money," Hartman told Lamison. "The question is, which way will you go?" Hartman told Lamison that after paying off the loan, she needs to create emergency savings that are equivalent to 12 months of her income.
"People in the entertainment business need to have bigger emergency savings because they can go for long periods without employment," Hartman said. While she establishes the emergency savings, Lamison needs to start saving for retirement. As much as 20% of her income should go into a money market account that is set up in a Roth IRA. In a dire situation, that account could be used as an emergency fund because Roth IRA contributions that are withdrawn before retirement age aren't penalized (earnings on that account, however, may be penalized if withdrawn too early). Once Lamison has sufficient emergency savings, the IRA could be instead invested in a mutual fund that has a mixture of 60% stocks and 40% bonds.
Getting health insurance is crucial too. "It's not real to her how fast things can go bad," insurance broker Bonnie Milani said when asked about Lamison's situation. "The hospital will save your life. Then it will ruin it financially if you can't pay your bills."
A high-deductible plan covering catastrophic illnesses as well as annual physical exams would cost Lamison about $165 a month, Milani said. But Lamison balked at buying health insurance. Despite her recent fast-food lunch, she said, she takes care of herself by eating right and exercising. Nonetheless, by the end of the meeting Lamison said she might look into a healthcare plan.
One thing she will definitely do is make good on her student loan. "I want to get that monkey off my back," she said. Overall Lamison, who wears a pendant inscribed with the word "Hope," is optimistic about reordering her finances and her future. Her job at the museum gives her some freedom to pursue other opportunities to earn money. She recently went on an audition for a national Toyota commercial. And there are prospects for her to eventually draw a small salary from her nonprofit foundation.
"All possibilities are in flux," Lamison said.
Do you need a money makeover? Each month the Sunday Business section gives readers a chance to have their financial situations sized up by a professional advisor at no charge. To be considered, send an e-mail to makeover@latimes.com. You also can send a letter to Makeover, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. Include a brief description of your financial goals and a daytime phone number. Information you send us will be shared with others.
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