Finance

The most common mistakes in money

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If a random person were to look at my list of New Year’s resolutions for 2023, they would probably say that I posted the most unsexy resolutions of all time. Where some resolution lists might consist of exercising more consistently, eating more fruits and vegetables, sleeping better, traveling more, or even drastic life changes like getting engaged or getting a new job, my resolution list has one single goal: figure out what the hell is going on with my personal finances. From building an emergency fund to investing to paying off debt, I want to learn it all—and, despite my asexuality, I know I’m not the only one with financial self-care at the top of my aspirations for 2023 (hello, recession!).

Enter: Tori Dunlap, personal finance guru, founder of Her First $100K and author A financial feminist. This week on The Everygirl Podcast, we sat down with Tori to talk all things personal finance, and she shared some incredible insight into what it really means to change your relationship with money for the better. Whether you’re embarking on a new financial self-help journey this January, or simply curious about new personal finance hacks, Tori has a wealth of knowledge (pun intended). Read on for three common personal finance pitfalls women make and how to avoid them. Then check out this week’s episode of The Everygirl Podcast for more.

1. Tackle the numbers before you look at your money mindset

Tori found that while many clients were initially excited to learn about budgeting, investing, and paying off debt, that enthusiasm waned over time if they didn’t first take a long, hard look at their relationships with money. “I realized that even if it’s very uncomfortable, you can’t be good with money – you can’t develop a good, healthy relationship with money for the rest of your life – until you start to understand what blinds you emotionally and psychologically.” I have an eye for money,” Tori said. One journaling exercise Tori recommends before diving into the numbers is to think about your first memory of money and think about how that memory has affected your financial habits today. Exercises like these can set you up for success on your financial journey before you even create a budget.

2. Overthinking financial decisions or “analysis paralysis”

Have you ever had that moment where you know you want to cook a healthy meal at home, but you’re so indecisive about what to cook that you end up with pizza at the door at 9pm? If so, you’re familiar with the feeling of analysis paralysis, which Tori says is a very common financial distraction that keeps us from meeting our personal financial goals. Many people try too hard and too long to find the best a high yield savings account for their emergency fund, the best investment plan, or the best credit card. In reality, just starting to save, invest or build credit is much more important to financial growth than finding the best options. Tora’s advice is just to start as soon as possible. Know that the differences between many of these accounts or plans are small, and the best thing you can do for yourself is to pick one and go with it.

3. Succumbing to investment phobia

If you’re like me, hearing the word “investing” can make you cringe as you experience terrifying flashbacks to seventh grade math class when everyone but you understood the unit of the stock market. However, as Tori points out, investing in real life has no fear. In fact, it’s an incredibly useful tool for financial self-care. Imagine yourself at retirement age: when you’re 65, what do you want to be? What do you want to spend your days doing? According to Tory, investing (especially through a 401K or Roth IRA) is the same thing as taking extra good care of that 65-year-old version of yourself. “You’re doing it for yourself and you’re going to spend this money eventually,” Tori says on The Everygirl Podcast. “For a 65-year-old, you should splurge on a Sauvignon Blanc with lunch.”

Avoiding the paralyzing terror of investing can mean thinking a little harder about why investing will be a good thing for you in the long run and why putting that money away for now will be worth it. Some heavy investment in 2023 through investing can make a difference in 2043, 2053 or 2063.

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