7 Best Personal Finance Books to Read of All Time

7 Best Personal Finance Books to Read of All Time

Most Americans today are woefully lacking in financial literacy. A 2018 study by the FINRA Foundation found that only one in three Americans could correctly answer at least four out of five questions about simple financial concepts like compound interest and inflation. And our lack of knowledge is hurting us. In a 2019 survey by The National Financial Educators Council, 1,500 Americans said their poor financial fitness had cost them an average of $1,230 in the past year.

One way to improve your financial literacy is to read up on the subject. At your local library or bookstore, there are hundreds of books on all aspects of dealing with money, from basic budgeting to early retirement.

Best Personal Finance Books

Of course, there’s no way you could read every single personal finance book on the market. Fortunately, you don’t need to. Most books on a particular financial topic cover pretty much the same ground. There are several books on money that offer a broad, all-around primer on personal finance and money management. They’re the perfect way for financial newbies to learn the basics of earning, saving, investing, and developing smart money habits.

1. “The Richest Man in Babylon” by George S. Clason

In the 1920s, George S. Clason wrote a series of informational pamphlets for banks and insurance companies to hand out to their customers. But he didn’t simply lay out facts like a textbook. Clason illustrated financial principles through parables — specifically, short stories set in ancient Babylon. The stories were such a hit in 1926 that they were bound together and published as a book.

This classic text remains popular with 21st-century readers because it presents sound financial wisdom in a clear, compelling way. It emphasizes principles like living within your means, saving for retirement, and avoiding risky investments and get-rich-quick schemes.

Because this older book is no longer under copyright, you can read the full text for free online at the Internet Archive. But if you prefer a bound copy, you can buy it from Amazon or Bookshop.

2. “The Index Card” by Helaine Olen and Harold Pollack

If you want a more modern, straightforward approach to personal finance, check out “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated.” It boils down the basics of money management to 10 simple rules short enough to fit on a 4-by-6-inch index card.

The idea grew out of a 2013 interview of Olen in which Pollack offhandedly commented that the best financial advice could fit on an index card. It prompted a flood of requests for such a card and eventually inspired the two to turn the idea into a book.

Pollack and Olen focus on common-sense rules, such as “strive to save 10 to 20% of your income” and “pay your credit card balance in full every month.” Each of these principles gets its own chapter. But they’re also laid out in a list you can copy onto an index card for easy reference. This book is an excellent choice for beginners and anyone who likes easily digestible advice that’s easy to remember.

3. “The Automatic Millionaire” by David Bach

Of David Bach’s 12 books on personal finance, 11 have been national bestsellers, and two — including “The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich” — have hit the No. 1 spot on The New York Times bestseller list. In this volume, he outlines a plan not to get rich fast but to get rich slowly and surely over your lifetime.

The key to Bach’s system is setting up an automatic investment plan through which you invest just a few dollars every single day. He explains how to redirect a few dollars per day into investments by looking for what he calls your personal “latte factor” — small regular expenses that add up. By “paying yourself first” and making your plan automatic, he argues, you can build wealth steadily, even if you don’t earn a high income.

4. “Women & Money” by Suze Orman

Numerous studies show that women handle money differently from men. Some of these differences are healthy. Women tend to be more cost-conscious shoppers, save more of our income, and be more cautious about debt.

However, women also have weak points where money is concerned. Women generally earn less and are more timid about investing in the stock market. Put that together with the fact that women often take time out of careers to raise children full-time, and it all adds up to lots of women lagging behind men on the road to financial freedom.

Financial guru Suze Orman wants to change that. In “Women & Money,” she talks frankly about how problems like fear and embarrassment can hold women of all ages back where money is concerned. Then she shows how to tackle these problems head-on and achieve your financial goals. From buying a car to investing for retirement, taking out student loans to making money decisions with a spouse, Orman covers everything women need to know about money but are too often afraid to ask.

5. “Broke Millennial” by Erin Lowry

When it comes to money, the millennial generation faces a different set of challenges than older folks. Compared to earlier generations, they’re burdened with higher student loan debt, lower incomes, and less job stability. As a result, many millenials struggle to build a secure financial foundation.

In “Broke Millennial: Stop Scraping By and Get Your Financial Life Together,” financial expert Erin Lowry offers advice specifically for Generation Y. Lowry goes beyond the basics of budgeting and investing to explore the psychological side of money. She helps readers understand their relationship with money and how it can help or hurt them. She discusses ways to handle tricky situations such as splitting a check with a group of friends and talks about how to get “financially naked” with a partner and talk honestly together about money.

To appeal to the younger set, Lowry peppers the text with amusing stories and hashtags like #GYFLT — get your financial life together. She also gives the chapters whimsical titles, including “Is Money a Tinder Date or Marriage Material?” and “Paying Rent to your ’Rents.” Yet wrapped in the humor is vital information about paying off debt, buying a home, and saving for retirement. In a New York magazine roundup of personal finance books, financial expert Farnoosh Torabi says Lowry’s book perfectly “captures the financial zeitgeist of this generation.”

6. “You Are a Badass at Making Money” by Jen Sincero

Most financial guides tackle the nuts and bolts of handling money, like saving for retirement or paying off credit card debt. Jen Sincero’s “You Are a Badass at Making Money: Master the Mindset of Wealth” takes a different approach. She focuses on the ability to make money as largely a matter of attitude. With cheeky humor, she explains how to break the mental habits that can hold you back and helps you learn to recognize and seize opportunities.

A Business Insider review of this book concedes that it’s a bit short on “actionable financial advice.” You won’t find concrete tips here on starting a business, building an emergency fund, or choosing a financial advisor. What this book offers instead is a good, solid kick in the pants. If there’s something you’ve always wanted to do — change careers, start a business, travel the world — but doubt and fear have held you back, this is the book you need.

7. “I Will Teach You To Be Rich” by Ramit Sethi

When you see a book called “I Will Teach You To Be Rich,” you might expect it to contain some kind of get-rich-quick scheme that promises — but can’t deliver — big bucks with minimal effort. Fortunately, Ramit Sethi’s classic work is more than that. Instead, it provides a crash course in handling your money and building wealth.

“I Will Teach You To Be Rich” covers every aspect of your financial life. In 13 chapters, Sethi explains how to:

What reviewers love about Sethi’s program is the way it takes the effort out of money management. He breaks down financial planning into simple steps that are easy to put into action. His style can come across as harsh at times, with stinging criticism of “crybabies” and “victim culture.” But the message behind it — that your financial future is in your hands — is valuable and empowering.

---

Final Word

The books on this list provide a solid grounding in the basics. However, there’s lots more to explore beyond that. Once you understand the essentials, you can seek out other books to help you dive into the details of specific topics. There are books to help you get out of debt, books on investing, books on home buying, and books on how to achieve financial independence.

As you search for new finance books, examine them carefully to ensure they’re useful and reliable sources. Look at the authors’ histories and credentials to see what makes them qualified to advise others on financial matters. Are they finance professionals, journalists, or people writing from personal experience? Learning about the authors helps you avoid falling for bogus investment advice and get-rich-quick schemes that have no real results to back them up.

Also, because one of the keys to gaining wealth is to keep a lid on your spending, it makes sense to pick up the books you want as cheaply as possible. Along with your local library, check out secondhand bookstores, online sellers, and book swaps to save money on books.

Published at Mon, 08 Feb 2021 20:30:04 +0000