Have you ever felt like some people naturally understand personal finance? They have been saving diligently since childhood, have paid off their debt and have the recommended six-month emergency fund. It is certainly possible that some people have a natural tendency to save money and cut costs.
But not everyone is natural when it comes to money. If money management doesn’t come naturally to you, you need to take the time to learn the basics. Fortunately, there are tons of resources available that can help you understand the basics of money and saving.
In fact, the large number of resources available can make it difficult for some people to know where to start. These best personal finance books will help put you on the path to financial fluency.
1. The best book for the basics
“The Index Card: Why Personal Finances Don’t Have to Be Complicated” by Helaine Olen and Harold Pollack
A lot of people buy a personal finance book on the assumption that it will solve all of their money problems, says Hali London, certified financial planner at Facet Wealth. The problem is, most personal finance books make things too complicated for beginners. âBecause our lives are busy enough,â says London, âwe are unlikely to try most of the strategies offered by personal finance books. “
This is why London recommends that beginners start with âThe Fact Sheet: Why Personal Finances Don’t Have to be Complicatedâ. The idea behind the book is that everything you need to know about personal finance can fit on one card.
The book describes 10 principles for building a strong financial future, and it breaks these ideas down by chapter. These principles cover things like saving in your 401 (k) at work, paying off your debts, and diversifying your investments.
âEven if someone is just reading the table of contents, they can learn good habits that will improve their financial life,â said London.
2. The best book for creating good money habits
âNudge: Improving Decisions About Health, Wealth, and Happinessâ by Richard Thaler and Cass Sunstein
We all make daily decisions about how to spend and save money. But Brent Weiss, also a certified financial planner at Facet Wealth, argues that most of us don’t understand why we make the decisions we make. And we don’t have a framework to make better decisions. That’s why he recommends âNudge: Improving Decisions About Health, Wealth and Happinessâ.
âNudgeâ isn’t your typical personal finance book, but it does explain how and why we make financial decisions. That’s why Weiss recommends this book to anyone trying to improve their financial situation.
âBefore we start thinking about retirement decades away or other goals in the distant future, we need to focus on improving our habits,â Weiss says.
Too many people, Weiss says, focus on finding âmoney hacksâ or ways to play with the system. âNudgeâ helps readers understand how to create habits that will build a secure financial future. Weiss calls these habits âthe essential elements that guide our decisionsâ.
3. The best book to pay off your debts
âThe Total Money Makeover: A Proven Plan For Financial Healthâ by Dave Ramsey
Dave Ramsey is a well-known personal finance expert who has helped millions of people through his radio show and books.
Ramsey’s books are easy to understand and provide concrete steps to pay off debt and create a stable financial future. If you have debt and need a step-by-step plan to pay it off, “The Total Money Makeover” gives you just that.
Ramsey also explains what to do with any excess cash after your debt is gone. The book covers things like building an emergency fund, managing vacation expenses, and saving for retirement.
4. The best book for investing
âThe Little Book of Sense Investing: The Only Way to Guarantee Your Fair Share of Market Returnsâ by John C. Bogle
Investing in the stock market can seem daunting at first. You might be thinking that you have to get lucky and pick the next Amazon to build wealth. However, this is not the case.
In âThe Little Book of Sense Investing,â Bogle, the late founder of the Vanguard Group, does a great job of explaining how to invest in index funds. Index funds are generally inexpensive and well diversified, and they mimic the performance of the market rather than trying to beat it.
Bogle explains how index funds, like those that track the S&P 500, often offer higher returns than individual stocks and are a better long-term investment strategy. The book is easy to read and will make you feel more knowledgeable and knowledgeable about investing.
5. The best book for the money mindset
“The Millionaire Next Door: The Surprising Secrets of Rich Americans” by Thomas J. Stanley and William D. Danko
Although the term âmoney mindsetâ has become a negative buzzword in recent years, âThe Millionaire Next Doorâ does a great job of breaking the millionaire mindset and the habits that exist. ‘they have developed to get there in their financial life. .
One of the most interesting things the book points out is that millionaire habits are not what you might expect. Instead of buying expensive sports cars and living in oversized mansions, most millionaires are frugal and have earned their wealth by managing their money responsibly.
6. The best book to achieve financial independence
“What Your Financial Advisor Doesn’t Tell You” by Liz Davidson
When it comes to achieving financial independence, many Americans will turn to a financial planner for advice. Facet Wealth Certified Financial Planner Michael Smith says the right advisor can be a big help and bring a lot of value to the table. However, Smith cautions that not all advisers are the same.
âFrom education to experience to fees, counselors come in all shapes and sizes,â says Smith. âConsumers should educate themselves on how to find the right advisor for their situation. “
That’s why Smith recommends reading âWhat Your Financial Advisor Doesn’t Tell Youâ by Liz Davidson.
Despite the provocative title, Davidson’s book is not a critique of financial advisers. Instead, she emphasizes that we are ultimately responsible for our economic future, not our financial advisor. The book breaks down complex personal finance topics in an easily understandable way. It also explains very well what the average person should focus on in their financial journey.