Introduction
In her groundbreaking book "Financial Feminist," Tori Dunlap tackles the pervasive issue of the wealth gap and empowers readers to take control of their financial futures. This eye-opening work delves into the systemic barriers that have long prevented women, people of color, and other marginalized groups from achieving financial success. Dunlap's approach is both practical and revolutionary, offering actionable advice while challenging readers to confront their own beliefs and emotions surrounding money.
The book begins by addressing a fundamental truth: within our capitalist system, money equals freedom. While it's often said that money can't buy happiness, Dunlap argues that it can buy the freedom to make choices that lead to happiness. This includes the ability to leave toxic jobs or relationships, take restorative vacations, or pursue hobbies and interests that bring joy and fulfillment.
Dunlap's work is particularly timely, as it confronts the harsh realities of economic inequality. From the gender pay gap to predatory lending practices and neighborhood redlining, systemic barriers can cost marginalized individuals over a million dollars in personal wealth over a lifetime. By framing personal wealth as a feminist issue, Dunlap makes a compelling case for why financial empowerment is crucial for creating lasting social change.
Throughout the book, Dunlap debunks long-held myths about money and offers clear, practical advice for readers at every stage of their financial journey. She doesn't shy away from addressing the challenges of thriving in a system that wasn't designed for everyone's success. Instead, she provides tools and strategies to help readers overcome these obstacles and build the lives they desire.
Confronting Financial Shame and Emotions
One of the most powerful aspects of "Financial Feminist" is its focus on the emotional side of money management. Dunlap begins by addressing a often-overlooked fact: our perceptions of money are largely formed by the time we're seven years old. These early experiences and observations shape our attitudes and emotions around finance, often in ways we don't fully realize.
Dunlap emphasizes that financial literacy is not innate – it's a skill that must be learned and practiced. However, she points out that men and women often receive very different types of financial education. While boys are frequently taught about building wealth through investments, real estate, or entrepreneurship, girls are more likely to receive instruction limited to household budgeting, coupon clipping, and cutting expenses. This disparity in education has long-lasting effects on financial outcomes.
The book also tackles the pervasive issue of financial shame. Society often stigmatizes those who struggle with debt, savings, or major purchases, ignoring the complex factors that contribute to financial difficulties. This shame is particularly harmful to women, who face unique challenges in the financial world. Dunlap reminds readers that women couldn't even have their own credit cards until 1974 or get a business loan in their name until a decade later.
To combat these deeply ingrained issues, Dunlap encourages readers to practice self-compassion and mindfulness when it comes to their finances. She advocates for checking in with one's emotions around money and understanding how they impact decision-making. By confronting these emotions head-on, readers can begin to build confidence in their financial abilities.
This emotional work is crucial because it lays the foundation for all future financial decisions. Confidence in one's financial abilities can lead to positive actions like negotiating for better pay, seeking further education, or advocating for oneself with creditors. Over time, these small changes can lead to significant improvements in one's financial situation.
Facing Financial Reality
After addressing the emotional aspects of money management, Dunlap guides readers through the process of confronting their current financial situation. She acknowledges that for many, the idea of examining their finances can provoke extreme anxiety. However, she emphasizes that running away from financial reality makes it impossible to create a plan for achieving one's goals.
The first step in this process is gathering information about income, savings, and debt. For those with irregular income from freelance or commission work, Dunlap recommends collecting several months of data to calculate an average, always planning based on the lowest expected monthly income.
Dunlap stresses the importance of an emergency fund, ideally containing three months of living expenses. She also highlights the need to differentiate between high-interest debt (anything above the 7% average stock market return) and lower-interest debt like mortgages.
The next crucial step is tracking spending. While Dunlap is clear that financial feminism isn't about deprivation, she emphasizes the value of understanding where money is going. This knowledge allows for more intentional decisions about spending and saving. She suggests using bank statements or online tools to categorize and track spending for several months to gain a clear picture of financial habits.
Throughout this process, Dunlap continually reminds readers not to judge themselves for their current financial situation. The act of facing financial reality is a significant step forward, regardless of what that reality looks like.
Setting Achievable Financial Goals
With a clear understanding of one's current financial situation, Dunlap guides readers through the process of setting goals. She recommends starting with just three goals, arguing that this focused approach allows for faster progress and greater motivation.
Dunlap emphasizes the importance of making goals as specific as possible, setting a timeframe for achievement, and including how accomplishing the goal will make one feel. She introduces an interesting technique of stating goals in the past tense, such as "I saved five thousand dollars this year for my emergency fund and felt much less stress." This approach, she argues, signals to the unconscious mind that the goal is achievable.
For long-term goals, Dunlap suggests breaking them down into smaller, monthly steps. This makes large goals less overwhelming and allows for regular tracking of progress. She also encourages readers to think about what each goal represents beyond just numbers. For example, framing savings as a "take this job and shove it!" fund or thinking of extra savings as "Tuscany bucks" can make the process more engaging and meaningful.
Dunlap stresses that goals should be personal and aligned with individual well-being and happiness. By setting goals that truly matter to the individual, the work of achieving them becomes more rewarding and sustainable.
Creating a Personalized Financial Plan
Once goals are set, Dunlap introduces a framework for creating a personalized financial plan. She presents the concept of three "baskets" for monthly spending, each addressing different aspects of financial life.
The Expenses Basket: This covers the costs of sustaining life, including housing, food, transportation, utilities, and insurance.
The Goals Basket: This represents concrete investments in the future, aligned with personal financial goals.
The Fun Stuff Basket: This covers spending that isn't essential for survival but makes life enjoyable and worth living.
Dunlap suggests starting with the 50-20-30 rule as a guideline: 50% of income toward expenses, 20% toward goals, and 30% for everything else. However, she emphasizes that these percentages can be adjusted based on individual circumstances.
For the Goals Basket, Dunlap outlines a set of priorities:
Emergency Fund: This provides stability and confidence in the face of life's uncertainties.
High-Interest Debt: Paying off debts with interest rates above 7% (the average stock market return) is crucial for long-term financial health.
Retirement Savings and Low-Interest Debt: Balancing retirement savings with paying off lower-interest debts ensures both immediate and long-term financial security.
Major Life Goals: This includes saving for things like home down payments, business startups, or significant travel experiences.
By following these priorities, Dunlap argues that individuals can create a financial plan that not only secures their future but also aligns with their values and aspirations.
The Power of Financial Security
Dunlap dedicates a significant portion of the book to explaining why financial security is so crucial, particularly from a feminist perspective. She argues that having an emergency fund and overall financial stability provides the freedom to challenge systemic inequalities like the wage gap.
With financial security, individuals have the confidence to negotiate for better pay or leave unfulfilling jobs to seek better opportunities. This ability to advocate for oneself and make choices without fear of immediate financial ruin is a powerful tool in combating workplace inequality.
Moreover, Dunlap emphasizes that taking control of one's financial life can lead to increased self-worth and confidence. As individuals achieve their financial goals, they often find the motivation to take on other challenges and invest in personal growth.
Investing for the Future
Once immediate financial needs are met and high-interest debt is addressed, Dunlap strongly advocates for investing as a key component of long-term financial health. She demystifies the investment process, encouraging readers to start small and consistent, such as regularly contributing to an index fund.
Dunlap also introduces the concept of value-aligned investing. She encourages readers to research and invest in funds that support causes they care about, such as environmental sustainability, economic equality, or minority-owned businesses. This approach allows individuals to grow their wealth while also contributing to positive social change.
The Ripple Effect of Financial Feminism
Throughout "Financial Feminist," Dunlap emphasizes that personal financial success isn't selfish – it's a powerful tool for creating broader social change. When individuals, particularly those from marginalized groups, achieve financial stability and success, they gain the power to influence and shape their communities and society at large.
Dunlap provides examples of how even small investments can have significant impacts. She cites microlending programs, where small loans to women entrepreneurs often lead to substantial returns that benefit entire communities. By achieving personal financial success, individuals gain the ability to support and invest in causes and businesses that align with their values, creating a ripple effect of positive change.
Practical Tips and Strategies
Throughout the book, Dunlap offers numerous practical tips and strategies for improving one's financial situation. These include:
Negotiating with creditors for lower interest rates on existing debts.
Automating savings and investment contributions to make consistent progress toward goals.
Researching and comparing financial products to ensure the best rates and terms.
Continuously educating oneself about personal finance and investment strategies.
Building a support network of like-minded individuals who are also working toward financial goals.
Regularly reviewing and adjusting financial plans as circumstances and goals change.
Practicing mindful spending by tracking not just the amount spent, but also the emotions and circumstances surrounding purchases.
Addressing Systemic Barriers
While much of "Financial Feminist" focuses on individual actions and strategies, Dunlap doesn't shy away from addressing the systemic barriers that contribute to financial inequality. She discusses issues such as:
The gender pay gap and its long-term impact on wealth accumulation.
Discriminatory lending practices that disproportionately affect women and people of color.
The "pink tax" – the tendency for products marketed to women to be more expensive than similar products for men.
The unequal distribution of unpaid labor, particularly household and caregiving responsibilities, which can impact women's earning potential.
The lack of comprehensive financial education in schools, particularly for girls and young women.
By highlighting these systemic issues, Dunlap encourages readers to not only work on their personal finances but also to advocate for broader societal changes that promote financial equality.
The Importance of Community and Support
Dunlap emphasizes throughout the book that achieving financial success doesn't have to be a solitary journey. She encourages readers to build a community of support, whether through friends, family, or online groups focused on financial empowerment.
This community can provide encouragement, accountability, and a space to share both successes and challenges. Dunlap suggests that by openly discussing money and financial goals, we can break down the taboos and shame often associated with these topics, particularly for women.
She also advocates for mentorship and knowledge sharing. Those who have achieved certain financial milestones are encouraged to share their experiences and advice with others who are earlier in their journey. This creates a cycle of empowerment and support that can lift entire communities.
Adapting to Life Changes
Recognizing that life is rarely static, Dunlap dedicates time to discussing how to adapt financial plans to major life changes. Whether it's a career shift, starting a family, going through a divorce, or facing a health crisis, she provides strategies for reassessing and adjusting financial goals and plans.
She emphasizes the importance of flexibility and self-compassion during these transitions. While it's important to have long-term financial goals, Dunlap argues that it's equally crucial to be able to adapt these goals as life circumstances change.
The Role of Policy and Advocacy
While much of "Financial Feminist" focuses on individual actions, Dunlap also touches on the importance of policy changes and advocacy work in creating a more equitable financial landscape. She encourages readers to stay informed about financial policies and to advocate for changes that promote equality.
This might include supporting legislation for pay transparency, advocating for improved parental leave policies, or pushing for more comprehensive financial education in schools. By combining personal financial empowerment with broader advocacy efforts, Dunlap argues that we can create more significant and lasting change.
Celebrating Progress and Success
Throughout the book, Dunlap emphasizes the importance of celebrating financial wins, no matter how small they might seem. Whether it's paying off a credit card, reaching a savings goal, or successfully negotiating a raise, she encourages readers to acknowledge and celebrate their progress.
This celebration serves multiple purposes. It provides motivation to continue working toward financial goals, reinforces positive financial behaviors, and helps to build confidence in one's ability to manage money effectively.
Final Thoughts
"Financial Feminist" is more than just a guide to personal finance – it's a call to action for readers to take control of their financial lives and use that power to create positive change in the world. Dunlap's approach is both practical and inspirational, providing concrete steps for financial improvement while also addressing the emotional and societal factors that impact our relationship with money.
By framing personal finance as a feminist issue, Dunlap connects individual financial success to broader social change. She argues convincingly that when marginalized individuals achieve financial stability and success, they gain the power to challenge and change systemic inequalities.
The book's emphasis on self-compassion, community support, and value-aligned financial decisions sets it apart from many traditional personal finance guides. Dunlap recognizes that financial decisions don't happen in a vacuum and encourages readers to consider how their financial choices can reflect and support their values.
Ultimately, "Financial Feminist" leaves readers with a sense of empowerment and possibility. It challenges the notion that financial success is out of reach for certain groups and provides a roadmap for achieving not just financial stability, but true financial freedom. By following Dunlap's advice, readers can work towards building lives they love while also contributing to a more equitable and just world.
The book concludes with a powerful reminder: money may not buy happiness directly, but it can buy the freedom, choice, and security that lead to a happier life. By facing financial realities, setting meaningful goals, and taking consistent action, anyone can build a more secure financial future. And in doing so, they gain the power to help build a more equal, fair, and just world for everyone.