Money advice is easy to find, but good money advice—advice you can use and take to heart—is trickier. Sure, budgeting and managing money seems easy, but if it were, everyone would have it down pat. This week, we’re looking at some of the best personal finance books to help get your accounts in order, based on your nominations.
There are more personal finance and money management books for sale than anyone could possibly buy (with all that money they should be saving), but there’s a reason—while the advice may not change substantially, many people are looking for useful ways to apply it personally, tips on how to improve their specific situations, and suggestions for how to save for the future, budget for today, invest for someday, and reach their financial goals.
here are the top five of your nominations, in no particular order.
The Total Money Makeover, by Dave Ramsey
Dave Ramsey has written more than a few personal finance books, and his classes, workbooks, podcast, and other media appearances have earned him quite the following. Some of it is definitely a bit of “cult of personality,” but for many, his advice hits home, clears the budgetary fog from their heads, and helps them make real, lasting changes in their lifestyle to improve their money situation, save for their financial goals, or dig out of debt. The Total Money Makeover ($15 at Amazon) was originally published in 2003, has been updated regularly since then, and subsequently spent over two years on the New York Times’ Best Seller list, and has sold close to 5 million copies. The book is generally considered a collection of Ramsey’s advice, put together into seven easy steps to help you get and stay out of debt and change your attitude about money. He also includes advice on investing, saving for the future, and increasing your cash flow and income to help you pay off those debts or save for your goals more quickly.
The Total Money Makeover: Classic Edition: A Proven Plan for Financial…
Those of you who nominated the book praised it for giving you easy to follow steps to manage your debt, and inspiring you to make positive changes along the way. Much of his advice are things you’ve probably heard, like how to properly make a budget, how to find places to trim your costs, and how to pay down credit cards (although Ramsey has often faced criticism for suggesting people pay off cards by balance instead of interest.) Regardless, having all of these tips in one book makes it easy to follow, and Ramsey’s companion exercises and suggested activities make actually doing them easy. That’s not to say there wasn’t criticism as well—many of you pointed out that blindly following Ramsey’s advice can land you in places you may not want to be, like paying more interest on your cards over the time it takes to pay them off, or not taking our good debt (student loans, affordable mortgages, etc) that work better for you simply in order to keep your cash flow high. Others of you said that Ramsey’s advice changed you life, and suggested many of his other books as well.
I Will Teach You to be Rich, by Ramit Sethi
Ramit Sethi’s I Will Teach You to Be Rich ($8 at Amazon) is a solid beginner’s tome to all things personal finance and investing. You’ve probably seen Sethi’s name here at Lifehacker before—we’ve featured many of his financial tips and suggestions for years, and even reviewed his book ourselves. The book originally came out in 2009, and is primarily designed to break down complicated financial topics into simple, actionable, and manageable tips that anyone can use and put into practice. In fact, some people consider his tips to be a little too simple, but that’s the point: by making his suggestions actionable and easy to follow, you’re more likely to actually do the things he suggests, stick with them, and improve your financial situation. The book includes suggestions on how to save for the future, automate your finances so everything is paid on time (and your debt decreases without you worrying about it), and even find new ways to increase your cash flow with side gigs and other passion projects.
I Will Teach You To Be Rich
Those of you who nominated this book praised it for being easy to follow, and for not being horrifically dense or obtuse like many personal finance books tend to be. You noted that it’s focused on giving you the tools to better your financial life, without simultaneously preaching the dogma of financial freedom at the same time. Others of you praised Sethi’s approach to finances as being more flexible and workable than many others, so you were able to resonate with it a bit more. You can read more in the book’s nomination thread here.
Your Money or Your Life by Vicki Robin and Joe Dominguez
If you’re looking for a personal finance book that doesn’t just cough up financial advice, but also suggests you take a good look at the psychology of money, the way people deal with and talk about money, and the way money plays into your goals and dreams, Your Money or Your Life ($10 at Amazon) is a great option. The book originally came out in 1992, but the tips and suggestions have been solid ever since—mostly because instead of focusing entirely on things like “save more and spend less,” the book tries to pick apart the reasons why we spend, and teach you to put more value on experiences and less on stuff. It reminds you that spending money isn’t a bad thing—when it’s done for the right reasons—and reminds you to compare things like debt and purchases you may not be able to afford with experiences and future costs you may have (or want) in exchange. In short, the book reminds you to look at money in terms of your life—not just your stuff. As many of its reviewers highlight, the book is definitely a life-changer, and reminds you that your goal should be to be financially independent and happy with the way you spend and manage money—not necessarily rich.
Those of you who nominated this book echoed the notion that the book isn’t just a regurgitated set of tips to help you get out from under a pile of debt—it’s a guide to help you reframe the way you look at and think about money entirely, and after reading it, you’ll think about the way you manage it in terms of what makes you happy and secure, not just what makes you more money or keeps the wolves from the door. The book is well known for helping people think about their purchases in terms of hours worked and time invested, instead of just dollars and “how quickly I can pay this off,” for example. You can read more in the book’s nomination thread here.
The Richest Man in Babylon by George Clason
George Clason’s The Richest Man in Babylon ($7 at Amazon), originally published in 1926, is actually a collection of short parables set in ancient Babylon, each of which tackles a financial topic, like household budgeting, money management, business fiance, and more. The book actually started life as a series of pamphlets and informational pieces from banks and other financial institutions, aimed at educating people on money management tips and how to handle the ever-increasingly complicated world of personal finance. Even today the book stands as a great tome to the basics, told through simple and relatable stories that anyone can learn from. If you’re looking for a primer to money management, or you find other non-fiction personal finance books either dull, boring, or a chore to read, try this book. The stories are easy to follow and fun, and each one rewards you with a surprisingly relevant and specific lesson on things like how to make your money work for you, who you should and shouldn’t take financial advice from, and so on.
The Richest Man in Babylon
Those of you who nominated this book pointed out that one of the best things about it is how relatable and disarming the stories in it are. Following the characters along as they learn about how to handle their finances and improve their wealth makes you care about their success, and also makes it easier for you to take their stories to heart and apply the same basic principles to your own life. Some people may shrug and note that the book is common sense, but if common sense were common, as we’ve said before, no one would be in debt and no one would have trouble managing their money. You can read more in the book’s nomination thread here.
Get a Financial Life by Beth Koblinger
Beth Koblinger’s Get a Financial Life ($10 at Amazon) is aimed squarely at people in their 20s and 30s, and helping them get their financial house in order before they wind up making decisions that may be detrimental to their futures. If you’re saddled with student loan debt from years in college and want tips on how to pay it down effectively, need to understand the basics of things like health insurance and why you get bills even though your insurer pays for other things, and don’t see how it’s at all possible to save for a home of your own someday, this book is for you, and it’ll help you understand how those things work. Since none of them are things you learn in school, this book is an excellent single guide to most of those financial topics of interest to people younger than middle-aged. Koblinger offers tips on how to manage a 401(k) even in a rough market, how to get and stay out of debt even though you’re tempted with new and shiny purchases at every turn, how to increase your income and put those increases towards your goals, and more. Best of all, it’s great for people who make little to no money or people with high paying jobs, wherever you may fall on the spectrum.
Those of you who nominated the book specifically noted that while many other financial books are great for people later in life struggling with things like mortgages, multiple car loans, children and families, and saving for retirement or health care costs, this book is great for the confused youngster with purchasing power, some debt from school (or credit card debt), and no idea what they should do next or how they should manage their money now that they’re on their own. You can read more in the book’s nomination thread here.
Now that you’ve seen the top five, it’s time to put start reading, get 2015 off to the right start.