Tori Dunlap wants to remind you: personal finances are personal. To achieve financial success, she must do what is best for her own situation, not someone else’s.
Dunlap gained a following on her blog about her journey to save $100,000 on her 25th birthday. When she achieved that goal three months after her 25th birthday, she quit her job and turned the blog into Her First $100K, a financial education brand that aims to help women fight financial inequality and take control of their lives. your money.
More recently, Dunlap, now 28, published her first book, “Financial Feminist,” already a New York Times bestseller.
Along the way, he learned some tips that can help anyone looking for financial success, whether that means taking early retirement, starting a business, or fulfilling another dream. Here are the three most important lessons he says you must learn before you can achieve financial freedom, no matter what that means to you.
1. Being good with money takes practice, and you may be on a learning curve.
Good money management does not come naturally to everyone. For many, it’s a skill they have to learn, often later in life.
“I think we came out of the womb expecting to be magically good with money, but we don’t expect to be magically good at anything else,” Dunlap tells CNBC Make It.
She considers herself lucky that her parents instilled good financial habits in her from a young age, but she acknowledges that not everyone has the same foundation. And even if they do, without consistent effort it’s easy to stop practicing and slip into financial crisis.
You have to practice and get in the habit of learning about money before you can really master its effective use, she says.
“Just like anything new, whether it’s playing the tuba or learning to speak Italian, you’re going to be bad at it. It’s not going to work for you for a while,” says Dunlap. “That doesn’t mean you stop trying, it means you give yourself a lot of fun.”
2. Identifying your values makes a difference
Before you set your specific money goals, you need to understand your personal values, regardless of what others are doing.
“We really need to understand what our values are,” Dunlap says. “We have to put our brains on board to worry about anything. And that’s not a matter of willpower.”
Many people aspire to goals like homeownership or early retirement, but if your values are more aligned with the flexibility of renting or the joy of your career, then those don’t have to be your goals.
“You need to attach a ‘why’ and your values behind your financial goals instead of just ‘My parents told me I should buy a house, maybe I should do that,'” Dunlap says. “If you don’t want to do that, don’t. It’s okay. You need to find things that really reflect your values.”
3. Your emergency fund should always come first.
While most personal finance advice isn’t one-size-fits-all, Dunlap says the one thing everyone should listen to is building an emergency fund before anything else. She recommends saving three to six months of living expenses in a high-yield savings account for whatever calamity life may throw at you.
“We should all, regardless of age or financial status, work toward that emergency fund,” Dunlap says. “That’s the first step, even before paying off any debt.”
Hopefully, you won’t have to touch the money, but having a cushion can prevent further financial chaos and stress when life throws your way.
“[Your emergency fund’s] job is just sitting there in case you need to because of a job loss, your dog gets sick, you get sick, your car gets a flat tire, whatever,” Dunlap says.
Once you’ve laid the foundation, you’ll be one step closer to building the financial future of your dreams.
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Source: news.google.com