The 12 Best Personal Finance Books for the Savvy Reader
It’s no secret that many of us are independent learners when it comes to managing our money. After all, according to a 2020 survey by the Council for Economic Education,...
It's no secret that many of us are independent learners when it comes to managing our money. After all, according to a 2020 survey by the Council for Economic Education, only 21 states require high school students to take a personal finance course in order to graduate. As such, it's little wonder adults are relying on online resources and books to learn more about topics ranging from budgeting, investing, and retirement planning.
In general, personal finance books cater to specific groups of people. This could be millennials, women, or those approaching retirement. Because of this, it can be difficult to find the right advice for your specific situation. However, these 12 personal finance books should do the trick if you're a savvy reader.
1. "Why Didn't They Teach Me This In School? 99 Personal Money Management Tips to Live" by Cary Siegel
If you're like, money is a subject that I wish I had learned more about in school. In particular, how to properly manage my finances. Thankfully, that's what Cary Siegel delivers in this book.
Siegel, a retired business executive, divides the book into 99 principles and eight money lessons he believes that you should have learned in high school. In fact, the book was originally intended for Siegel's five children after he realized they did not learn important financial principles before entering the real world.
It turned out, however, to be a well-reviewed read with plenty of money lessons as well as firsthand advice from Siegel. Overall, anyone looking to begin their personal finance journey or get back on track should check out this easy-to-understand book.
Excerpt: "Politeness—Saying, "Please" and "Thank you" will get you far in life. It sounds silly, but, believe me, it's true. Don't take others for granted; instead, make them feel appreciated. I promise you three things: Showing appreciation will make others feel good, it will make you feel good, and it will help you out professionally. It's amazing how many people forget about this in their professional lives. Persistence—Half the battle is showing up every day and putting your best effort behind what you're doing. If you try your hardest all the time, no one will ever fire you, and as a result, you will find yourself in an economically secure place."
This book draws from Jason Vitug's personal experiences and conversations with others about financial and life goals. Specifically, the book focuses on a road trip across the country that he took in 2016 to highlight the idea of financial wellness.
The book is focused on presenting financial wellness as a way to achieve a health and wealth balance. Throughout this book, the main objective is to assist readers to discover their values prior to setting financial goals. It also details how to construct and use a budgeting method that aligns with their values.
Excerpt: "But here is a simple truth. Managing your finances responsibly can be summed up with the following advice: Save more than you spend, invest early and frequently, pay off debt and use credit sparingly, build assets, and create passive income. These simple guidelines have been restated over and over, yet many still are unable to apply these financial principles to their lives."
3. "Retire Before Mom and Dad: The Simple Numbers Behind a Lifetime of Financial Freedom" by Rob Berger
You probably expect to work until you're about 65 before retiring. It's also possible that retirement isn't even in your vocabulary since you don't believe you can afford to retire.
Rob Berger states that if you want to retire early, you can do so in his book "Retire Before Mom and Dad: The Simple Numbers Behind a Lifetime of Financial Freedom." According to Berger, deputy editor of Forbes, you can have financial security even in your 50s, 40s, or 30s – without a six-figure salary or giving up all your pleasures.
Excerpt: "The world tells us that the average person can't achieve Financial Freedom. Unless you make a six-figure salary, are born into money, or win the lottery, you can forget about becoming a millionaire or attaining Financial Freedom. Lie #1 tells us we are destined to live paycheck-to-paycheck. This lie is easy for us to believe. Our minds play a trick on us."
4. "The Wealthy Barber: Everyone's Common-Sense Guide to Becoming Financially Independent" by David Chilton
Financial Awareness Corporation president David Chilton explains how readers can achieve the financial freedom they've always wanted in his renowned 1989 book. Chilton uses a fictional barber and an abundance of humor to inform readers about the importance of building wealth slowly, steadily, and with certainty.
While the book has been updated several times since its initial release, some readers may find it to be outdated. However, those who are new to investing may still find it helpful.
Excerpt: "I think people should spend more on experiences and less on stuff, but then again, within the context of affordability."
Who doesn't dream of being a millionaire? In David Bach's bestselling book, "The Automatic Millionaire," you can actually make that vision a reality.
The book begins with the story of a married couple earning $55,000 annually together, and how they have achieved their financial goals. What were these goals? Having two homes, putting their kids through college, and retiring at 55 with a $1 million retirement nest egg.
What was the secret to their success? Building up a financial system that not only pays you first but automates it.
Excerpt: "Remember, inspiration unused is merely entertainment. To get new results, you need to take new actions."
6. "Spend Well, Live Rich" by Michelle Singletary
Michele Singletary is an experienced financial adviser, author, and journalist who originally released this book under the title "7 Money Mantras for a Richer Life." These were the lessons that her grandmother, Big Mama, passed on to her. And, they are;
- If it's on your ass, it's not an asset!
- Is this a need or is it a want?
- Sweat the small stuff.
- Cash is better than credit.
- Keep it simple.
- Priorities lead to prosperity.
- Enough is enough.
Those mantras are the basis for this book of straightforward and practical financial advice that actually works.
Excerpt: "We are minimizing our financial potential by making minimum credit-card payments."
7. "The Power of Habit" by Charles Duhigg
In a nutshell, business reporter Charles Duhigg t argues in this book that habits make or break us. It then instructs us on how to create a positive habit-starting process and how to eliminate negative ones using real-work examples, like the success of gold medal Olympian Micheal Phelps.
While not strictly a personal finance book, there is a lot of advice regarding money habits that all of us should find extremely helpful.
Excerpt: "This process within our brains is a three-step loop. First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use. Then there is the routine, which can be physical or mental or emotional. Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future: THE HABIT LOOP"
8. "You Are a Badass at Making Money: Master the Mindset of Wealth" by Jen Sincero
#1 New York Times bestselling author, keynote speaker, and motivational speaker Jen Sincero explores the mindset required to earn and keep money in this 2017 book. The inspiration offered more than makes up for the lack of tangible advice. However, those who want to gain a fresh perspective on generating income and need a motivation boost will find it most useful.
Excerpt: "We've been raised to believe that you have to work hard to make money, and certainly there are times when this is true, but the real secret is you have to take huge, uncomfy risks. You have to do stuff you've never done before, to make yourself visible, to acknowledge your own"
9. "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" by Dr. Thomas J. Stanley & William D. Danko
Originally published in 1996, this book still holds up surprisingly well in this current digital age. Despite what social media may lead you to believe, most millionaires are actually pretty modest and discreet. Millionaires do not drive expensive cars, jet-set around the world, or lounge at poolside in their mansions like you see in Keeping Up With the Kardashians.
Thomas J. Stanley, PhD., and William D. Danko, Ph.D. reveal in, "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" not only how millionaires earned their wealth, but also how they maintain it.
Excerpt: "Most people have it all wrong about wealth in America. Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend."
10. "Nudge: Improving Decisions About Health, Wealth, and Happiness" by Richard H. Thaler and Cass R. Sunstein
In this book, Nobel Prize-winning economists Richard H. Thaler and Professor Cass R. Sunstein examine decades of behavioral science research in order to determine why we spend and save the way that we do. They also take a deep dive into why we make these financial decisions when it isn't in our best interests.
The book also discusses tools and lessons on how to set ourselves up for success by changing what we think and how we act about money.
Excerpt: "A nudge, as we will use the term, is an aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives."
11. "Broke Millennial Takes On Investing: A Beginner's Guide To Leveling Up Your Money" by Erin Lowry
Remember Broke Millennial? Written specifically for millennials, and packed with practical and useful budgeting tips, it became a sensation. In 2019 author and personal finance expert, Erin Lowry released this follow-up.
As with its predecessor, this book is a practical and easy-to-read guide. But this time, it's with investing. The Broke Millennial Takes On Investing will cover a number of beginner-friendly tips to help you navigate the market based on your own beliefs and values.
Moreover, Lowry goes deeper than the concept of business investment. She also addresses topics like investing anxieties, buying and selling stocks, paying off debt like student loans, and how to start saving for retirement.
Excerpt: "Investments are the sexiest part of personal finance, but it's just one piece."
12. "The Psychology of Money: Timeless lessons on wealth, greed, and happiness" by Morgan Housel
Are you an overspender? If so, I strongly suggest that read this to discover how ego, preconceived notions, and even pride can shape our financial decisions and behaviors.
Overall, Housel, a partner at The Collaborative Fund and has worked as a columnist at The Wall Street Journal, presents readers with tips and tools for combating these biases through 19 short stories. It should be noted, however, that this method isn't the best approach to managing your investment portfolio.
Excerpt: "Use money to gain control over your time, because not having control of your time is such a powerful and universal drag on happiness. The ability to do what you want, when you want, with who you want, for as long as you want to, pays the highest dividend that exists in finance."
Frequently Asked Questions About Personal Finance
What is personal finance?
Managing your money, saving, and investing are all part of personal finance, notes Investopedia. This includes budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and estate planning. Usually, the term refers to the entire industry that provides financial advice to individuals and households and provides financial services.
Why is personal finance important?
In addition to managing your day-to-day financial needs, planning for the future is also an important part of personal finance. Investing or planning for retirement can be far more rewarding if you have a grasp on your personal finances.
Taking the time to understand the elements of personal finance will help you improve your financial situation. By getting this understanding, you can plan for long-term financial goals as well as budget for current needs.
What are the five aspects of personal finance?
Even though personal finance has a number of aspects, it can be divided into five categories: saving, investing, financial protection, tax planning, and retirement planning. All of these factors play an important role in the financial planning process.
- Savings. Set aside money as savings to cover unforeseen expenses.
- Investing. In order to achieve your financial growth dreams, you need to grow your money.
- Financial protection. Now that you have financial protection through insurance, you'll be able to weather any hard times.
- Tax planning. Making adequate investments and expenditures can lower your taxable income, thereby allowing you to save a lot of money each year.
- Retirement planning. To ensure that you have enough money to live comfortably in your golden years, retirement planning is crucial.
How can you improve your personal financial literacy?
Besides the books listed above, there are a variety of resources available online, provided by government agencies and nonprofit organizations to help you learn more about personal finance. These range from blogs to online courses to podcasts.
Furthermore, there are online and in-person courses offered by both for-profit and educational institutions. In many cases, for free. And, you can also speak with a financial advisor.
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