Tori Dunlap wants to remind you: personal finance is personal. To achieve financial success, you need to do what’s best for your situation—not someone else’s.
Dunlap earned the following blog about her journey to saving $100,000 by the age of 25. When she reached that goal three months after her 25th birthday, she quit her job and turned the blog into Her First $100,000, a financial literacy brand that aims to help women fight financial inequality and take control of their money.
Dunlap, now 28, recently published her first book, The Financial Feminist, which was already a New York Times bestseller.
Along the way, she learned a few tips that can help anyone who wants financial success, whether that means early retirement, starting a business or fulfilling some other dream. Here are the three biggest lessons she says you should learn before achieving financial freedom, whatever that means for you.
1. Getting 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 come out of the womb expecting to be magically good at money, but we don’t expect ourselves 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 admits that not everyone has the same basics. And even if they do, without constant effort it’s easy to fall out of practice and into financial turmoil.
You have to practice and get in the habit of learning about money before you can really master using it effectively, she says.
“Like anything new, whether it’s playing the tuba or learning Italian, you’re going to be bad at it.” You’re not going to make it for a while,” says Dunlap. “It doesn’t mean you stop trying, it means you give yourself a lot of grace.”
2. Identifying your values makes a difference
Before you can set your specific money goals, you need to understand your own personal values, regardless of what everyone else is doing.
“We really need to understand what our values are,” Dunlap says. “We have to turn on the brain to care about anything. And it’s not a matter of will.”
Many people pursue goals such as home ownership or early retirement, but if your values are more aligned with flexible rental offers or the joy that a career brings, then those may not be your goals.
“You have to put a ‘why’ and your values behind your financial goals, not just ‘my parents told me I should buy a house, maybe I should,'” says Dunlap. “If you don’t want to do it, don’t do it. That’s fine. You have to find things that actually 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 piece everyone should be heeding is to build an emergency fund first. She recommends saving three to six months of living expenses in a high-yield savings account for whatever contingencies life throws your way.
“Everyone, regardless of age or financial status, should be working toward that emergency fund,” says Dunlap. “That’s the first step, even before you pay off the debt.”
Hopefully you won’t have to touch any money, but having a cushion can prevent further financial chaos and stress when life throws something unexpected at you.
“[Your emergency fund’s] A job is just sitting there in case you need it because you lose your job, if your dog gets sick, you get sick, if your car gets a flat tire, whatever it looks like,” Dunlap says.
Once you’ve laid that foundation, you’re one step closer to building the financial future of your dreams.
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