If a random person were to take a look at my New Year’s resolution list for 2023, they would probably say that I set the unsexiest resolutions of all time. Where some resolution lists may consist of working out more consistently, eating more fruits and vegetables, getting better sleep, traveling more, or even drastic life changes like getting engaged or getting a new job, my resolution list features one single goal: figure out what the heck is going on with my personal finances. From creating an emergency fund to investing to paying off debt, I want to learn it all—and, in spite of its unsexiness, I know I’m not the only one with financial self-care at the top of my 2023 aspirations (hello, recession!).
Enter: Tori Dunlap, personal finance guru, founder of Her First $100K, and author of The Financial Feminist. This week on The Everygirl Podcast, we sat down with Tori to discuss all things personal finance, and she shared incredible insight on what it really means to change your relationship with money for the better. Whether you’re kicking off a new financial self-care journey this January, or simply curious about new hacks for personal finance, Tori has a wealth of knowledge (pun intended). Read on for three common personal finance pitfalls she says women make most often, and how to avoid them. Then check out this week’s episode of The Everygirl Podcast for more.
1. Tackling the numbers before looking into your money mindset
Tori found that although 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’ve realized that even if it is very uncomfortable, you cannot be good with money–you cannot develop a good, healthy relationship with money for the rest of your life–until you start to understand what sort of emotional and psychological hangups you have about money,” Tori said. One journaling exercise that Tori recommends before diving into the numbers is to reflect on your first money memory, and think about how that memory has impacted 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 having “analysis paralysis”
Ever had a moment where you know you want to cook a healthy at-home meal, but you’re so indecisive about what to cook that you end up Doordashing pizza at 9 p.m.? If yes, you’re familiar with the feeling of analysis paralysis, which Tori says is a very common financial hangup that gets in the way of meeting our personal financial goals. Many people stress too hard and for too long about finding the best high yield savings account for their emergency fund, the best investment plan, or the best credit card. In reality, just getting started with saving, investing, or building credit is far more important to financial growth than finding the top options. Tori’s advice is just to get started as soon as possible. Know that the differences between many of these accounts or plans is minute, and the best thing you can do for yourself is to pick one and run with it.
3. Succumbing to investment phobia
If you’re like me, hearing the word “investing” might send a shiver down your spine as you experience terrifying flashbacks to your seventh grade math class when everyone except for you understood the stock market unit. However, as Tori points out, real-life investing is nothing to be afraid of. In fact, it’s an incredibly useful tool for financial self-care. Picture yourself at retirement age: when you’re 65 years old, what do you want to be like? What do you want to spend your days doing? According to Tori, investing (especially through a 401K or Roth IRA) is the same thing as taking extra good care of that 65 year-old version of you. “You’re doing it for you, and you will spend this money eventually,” Tori says on The Everygirl Podcast. “It is for 65 year-old you to spend on sauvignon blanc with lunch.”
Avoiding paralyzing terror about investment may mean reflecting a little bit harder on why investing is going to be a good thing for you in the long run, and why putting that money away for the time being is going to be worth it. Some heavy lifting in 2023 via investing can make all the difference in 2043, 2053, or 2063.
