By the age of 25, Tori Dunlap had saved $100,000 and used the money to start a business, called Your first $100K. Three years later, the personal finance educator has more than 2 million tik tok followers, a No. 1 rated podcast, and a book scheduled for release later this year: “Financial Feminist: Beat the Bullshit of Patriarchy to Rule Your Money and Build a Life You Love.”
Dunlap says she is now financially independent, a goal she believes all women should achieve. While Dunlap’s purpose is to help women pay off debt, save money and invest wisely, her advice applies to men as well.
A solid financial foundation is essential, Dunlap says, to provide the freedom to leave toxic work environments and other unhealthy situations. “I want all women to feel financially secure,” she adds. “It is very important to get a financial education. The goal is to use money as a tool to build a better life for yourself, your family and your community.”
1. Money is an uncomfortable subject for many women.: The first step is to get more women to talk about money. “Statistically, men are more likely to talk about money than women,” says Dunlap. “Women will talk more about sex, death and religion than money, and I’m working to change that.”
2. Create an emergency fund: One of the most important financial goals is to create an emergency fund. “You need at least three months of living expenses in a high-yield savings account,” advises Dunlap. “Start setting aside money that will supplement your income in case of an emergency.”
3. Pay yourself first: One of the top priorities, says Dunlap, is to pay yourself first. “Treat your future self like another bill,” she says. “Then you’ll be able to save that money and put it on autopilot without having to think about it. I sometimes joke that many people give Netflix more money each month than they give themselves. I’m not saying cancel Netflix, but you deserve to give yourself at least the amount of money you pay for movies.”
4. Set up an automatic transfer: Dunlap is a strong believer in automatic transfers. “Regardless of how much debt you have, set up an automatic transfer from your checking account to your 401k, IRA, or savings account every week or month, or set up direct deposit of your paycheck. Plus, automatically pay your bills as much as you can. You want to automate your financial life as much as possible to make it easier to save money.”
5. Have index funds: Like many financial experts, Dunlap recommends creating a long-term investment strategy. “The beautiful part about thinking of investing as a long-term commitment is that the strategy doesn’t change, so it’s a lot less work because you’re not managing it all the time.”
“I’m not thinking about next week or next year, but 10, 20 or 30 years from now,” he says. “There will be peaks and valleys. The most important part is managing your emotions. For me, investing shouldn’t be sexy. That is why I will invest in index funds until I die.” His personal favorite is Vanguard Total Stock Market ETF VTI,
During a bear market or recession, Dunlap does not change its index buying strategy. “I stay the course,” she says. “During a bear market, index funds are for sale. I’m also strategically thinking about building a larger emergency fund. If you don’t have an emergency or supplemental fund, increase your income by negotiating a raise or getting a secondary source of income, even if it’s just a couple of hours a week.”
Close the gender gap
Studies show a big gap between men and women when it comes to financial literacy, says Dunlap.
In the media, for example, financial advice for men, says Dunap, is geared towards investing, building wealth, negotiating salaries and buying real estate. By contrast, financial articles for women, she says, “deal with deprivation, like ‘You’re not rich because you don’t work hard enough, you’re a frivolous spender, or you buy too many lattes or avocado toast.’ This is not true!”
Dunlap is determined to change that stereotype. “I want women to increase their wealth instead of decreasing it. I need them to make strategic decisions about their money instead of minimizing spending. All the advice about deprivation doesn’t work (one of the reasons most diets don’t work). The goal is to find that balance between spending and saving.”
Dunlap says many women don’t realize that investing is a two-step process. The first step is to put money into a retirement-oriented investment account, such as an IRA or 401k. The second step is to choose an investment, such as a stock or index fund. Says Dunlap: “Too many women skip step two and the money sits in financial purgatory, earning no interest. This may be obvious to financial journalists, but many women I know have never bought an investment. No one taught them how to do it.”
Dunlap also advocates “value-based spending”—finding out what you really value and spending most of your discretionary income on those things. “I tell people you don’t have to stop spending money,” she says. “Just stop spending money on things you don’t care about.”
Michael Sincere (michaelsincere.com) is the author of “Understanding Options” and “Understanding Stocks.” His latest book, “How to Profit in the Stock Market” (McGraw-Hill, 2022) is aimed at sophisticated traders and investors.
Plus: Hear Carl Icahn at the Festival of the best new ideas on the money on September 21 and 22 in New York. The legendary trader will reveal his point of view on this year’s market wild ride.