Tori Dunlap wants to remind you: personal finance is personal. In order to achieve financial success, you have to do what’s best for your own situation — not someone else’s.
Dunlap gained a following blogging about her journey to save $100,000 by the time she turned 25. When she accomplished that goal three months after her 25th birthday, she quit her job and turned the blog into Her First $100K, a financial literacy brand that aims to help women fight financial inequality and take control of their money.
Most recently, Dunlap, now 28, published her first book, “Financial Feminist,” already a New York Times bestseller.
Along the way, she’s learned a few tips that can help anyone aiming for financial success, whether that means retiring early, starting a business or fulfilling another dream. Here are the three biggest lessons she says to learn before you can achieve financial freedom, whatever that means to you.
1. Getting good with money takes practice, and you might be on a learning curve
Good money management doesn’t 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 acknowledges that not everyone has the same foundation. And even if they do, without consistent effort it’s easy to fall out of practice and into financial turmoil.
You need to practice and get into the habit of learning about money before you can really master using it effectively, she says.
“Just like anything else that’s new, whether that’s playing the tuba or learning to speak Italian, you’re going to be bad at it. It’s not going to work out for you for a while,” Dunlap says. “That doesn’t mean you stop trying, it means you give yourself a lot of grace.”
2. Identifying your values makes all the difference
Before setting your specific money goals, you need to understand your personal values, regardless of what everyone else is doing.
“We really need to understand what our values are,” Dunlap says. “We have to get our brains on board to care about anything. And that’s not a willpower thing.”
Plenty of people aspire to goals like homeownership or early retirement, but if your values are more aligned with the flexibility renting offers or the joy your career brings, then those don’t need to be your goals.
“You need to attach a ‘why’ and your values behind your financial goals as opposed to just ‘I was told I should buy a house by my parents, maybe I should do that,'” Dunlap says. “If you don’t want to do that, don’t do it. That’s OK. You need to find things that actually reflect your values.”
3. Your emergency fund should always come first
Though most personal finance advice isn’t one-size-fits-all, Dunlap says the one piece everyone should listen to is to build 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, be working toward that emergency fund,” Dunlap says. “That is step one, even before you pay off any debt.”
Hopefully you won’t need to touch the money, but having a cushion can prevent further financial chaos and stress when life throws something unexpected your way.
“[Your emergency fund’s] job is just to sit there in case you need it for a job loss, your dog gets sick, you get sick, your car gets a flat tire, whatever that looks like,” Dunlap says.
Once you lay that groundwork, you’re one step closer to building the financial future of your dreams.
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