Do you ever feel like some people naturally understand personal finance? They’ve been diligently saving since childhood, have paid off their debt and have the recommended emergency fund. It’s certainly possible that some people have a natural inclination toward saving money and cutting costs.
But not everyone is natural when it comes to money. If money management doesn’t come to you naturally, you have to put in the time to learn the fundamentals. Fortunately, there are tons of resources available that can help you understand the basics of money and saving.
In fact, the sheer number of resources available can make it hard for some people to even know where to begin. These top personal finance books will help put you on the path to financial fluency.
The best book for the basics
The Index Card: Why Personal Finance Doesn’t Have to Be Complicated -Helaine Olen and Harold Pollack
Many people buy a personal finance book assuming it will solve all of their money problems, says Hali London, certified financial planner with Facet Wealth. The problem is, most personal finance books make things too complicated for people just starting out. “Because our lives are busy enough,” London says, “we are unlikely to try most of the strategies offered by personal finance books.”
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That’s why London recommends beginners start with “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated.” The idea behind the book is that everything you need to know about personal finance can fit on a single index card. The book outlines 10 principles for building a strong financial future, and it breaks these ideas down chapter by chapter.
The best book for creating good money habits
“Nudge: Improving Decisions about Health, Wealth, and Happiness” 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 with Facet Wealth, argues that most of us don’t understand why we make the decisions we do. And we have no framework for how to make better decisions. That’s why he recommends “Nudge: Improving Decisions about Health, Wealth, and Happiness.”
“Nudge” isn’t your typical personal finance book, but it speaks to how and why we make financial decisions. That’s why Weiss recommends this book for anyone trying to improve their financial situation.
The best book for paying down debt
The Total Money Makeover: A Proven Plan for Financial Fitness -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 actionable steps for paying down debt and creating a stable financial future. If you’ve been struggling with debt and need a step-by-step plan for how to pay it off, “The Total Money Makeover” gives you precisely that. Ramsey also explains what you should do with any excess cash once your debt is gone. The book covers things like building an emergency fund, handling holiday spending and saving for retirement.
4. The best book for investing
“The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns” by John C. Bogle
Investing in the stock market can seem intimidating at first. You may think you have to get lucky and pick the next Amazon to build wealth. However, that’s not the case.
In “The Little Book of Common Sense Investing,” Bogle, the late founder of the Vanguard Group, does a great job of breaking down how to invest in index funds. Index funds are typically low cost and well-diversified, and they mimic the market’s return rather than trying to beat it.
Bogle explains how index funds, like ones that track the S&P 500, often provide higher returns than individual stocks and are a better long-term investment strategy. The book is an easy read and will leave you feeling more capable and informed when it comes to investing.
