PROGRESS NOT PERFECTION

STRATEGIC GOAL AREA ADVANCE

PROGRE$$

not perfection

WRITTEN BY: SABRINA MELGAREJO, GF, FINANCIAL COACH

Every day, women confide in me to discuss their finances and I would say at least 90% of the time, those women have negative emotions when it comes to their money. Whether they feel they don’t have enough money to enjoy their life, they feel trapped by debt, they are constantly comparing themselves to others who may appear to have more money or they don’t feel capable of handling their finances by themselves - I’ve heard it all.

If that sounds like you, don’t stress - it’s not your fault! Growing up in school we were taught how to identify metaphors in novels and memorize the periodic table but we were never taught financial literacy, something that we would have to use every day for the rest of our lives.

Regardless of our past, we can always improve ourselves moving forward and that is what matters. This is the key to the success of myself, my clients and what will be successful for you too - the PNP mindset. The Progress Not Perfection mindset is what I instill with every one of my clients. Having this mindset means you are focused on how to improve yourself each day little by little as opposed to wishing you had this subjective “perfect” financial situation. Every individual has a different definition of “perfection” - for some, that’s having a lot of nice cars, for others, that’s having a lot in your savings account. You yourself might have changed your definition of perfection over time too. In high school, being perfect with money may have been having a lot in your bank account. In your late twenties, being perfect with money may have been having a lot of money invested. Our definition of perfection always changes but our consistent determination to improve ourselves doesn’t have to. Don’t freak out over your number. Remember, we are focusing on progress not perfection. This number is just a starting point. Regardless of how low you might think it is, as long as you are improving it over time, you’re killing it! If you calculate your number and you are stressing, reach out to me and I will get rid of that fear ASAP.

Wondering how to measure progress in your finances? Net worth! Here's how to calculate it:

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Calculate your assets a.k.a. things you own like cash, the balance in your bank accounts, investment accounts, homes, cars (even if you owe money on your home/car, you can still include it as an asset if you own it). Calculate your liabilities a.k.a. things you owe like credit cards, student loans, mortgage, car loans. Take your assets and subtract your liabilities - that's your net worth number

Now let’s talk about how to improve your net worth number as I am sure you are excited to get this journey going. There are two types of ways we can improve - through the asset side of the equation or the liability side of the equation.

Here are some actions to take to increase your assets: Here are some actions to take to decrease your liabilities:

• Focus on increasing your savings rate (this is the percentage of the money you are saving/ investing out of the income you are receiving).

• Start investing (no matter how small).

• Set up automatic transfers to your savings accounts or investment accounts.

• Set up payment elections with your employer - you can tell your employer to put a percentage or dollar amount of your paycheck into your savings account before they even give it to you to spend. • Take advantage of 401k matches with your employer.

• Go on Pinterest and start a savings challenge - there are hundreds on there.

• Open a HYSA (high yield savings account) - your money will grow a lot faster in there than in a regular savings account. • Pick a debt payoff method like snowball or avalanche for example - get your game plan set up when it comes to tackling debt. Take them one at a time and it will go quicker.

• Increase your automatic payments to above the minimum payment - instead of paying $20/month, can you pay $40/month? Every little bit counts.

• Call the credit card company and see if they can lower your interest rate. The worst thing that can happen is that they say no and everything stays as-is.

• Focus on “bad” debt over “good” debt first.

“Bad” debt is high-interest debt like credit cards that cost you a lot more in the long run.

• Create a tracking system to keep yourself accountable and celebrate the small wins.

• Don’t beat yourself up. Fear and embarrassment will paralyze your progress.

You might put those feelings on yourself or you might hear other personal finance

“experts” tell you that having debt means you are dumb. Ignore this. We are not focusing on the past. We are focusing on improving ourselves day by day moving forward.

As sisters of Alpha Sigma Alpha, we understand the value of responsibility in our lives and why we need to focus on getting our money right. However, do not forget enjoyment needs to be prioritized as well. Life is meant to be lived. There will be days when you save and there will be days when you spend. Practice getting comfortable balancing the two and watch your stress go down and your happiness increase.

If you have any personal finance questions or just need to talk to someone about what might be stressing you out, reach out to me. I’m here for you sister.

Instagram: @__financiallyfree__ YouTube: Sabrina Ana Maria Email: support@sabrinaanamaria.com