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20 Best Personal Finance Books You Should Read Now

20 Best Personal Finance Books You Should Read Now

When we talk about understanding how to manage money, personal finance is one of the most essential skills you can learn. But without any guidance, it is difficult for us to understand the value of handling our money and using it to make even more. However, if you walk into any book store or library, you’ll find there a plenty of guides out there, in the form of personal finance books offering advice on financial planning. But all advices are not equal. To begin, you need some easy-to-read books that will explain you the basics of financing, the best way to save money, and how to pay off your loans.

Here’s a list of books that will help you in getting out of the sneak and rat race of debt and achieve the treasure that you truly deserve.

    The Millionaire Next Door

    by Thomas J. Stanley and William D. Danko

    The Millionaire Next Door is great for all those people who have just come into the game of personal financing, because this book talks about the fundamentals of personal finance with simple, consistent instructions .This book will help you in developing good practices from the very beginning.

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      The Investment Answer

      by Daniel Goldie and Gordon Murray
      In this book, Goldie and Murray pointed out a general guide to capitalizing by concentrating on five basic decisions every investor has to make. This brief, easy-to-read book is the most approachable investing book I’ve read.

      Print | eBook | Audiobook


        Psych Yourself Rich

        by Farnoosh Torabi
        In this book, you’ll learn about the relationship between you and the money. Farnoosh has beautifully explained how our “emotions influence when managing personal finances.” Precisely, this book will bring back you to the concept of behavioral finance and how you can discover your weaknesses and get the most out of your strengths to make structure and maintaining money as stress free and as organized as possible!

        Print | eBook | Audiobook

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          The Millionaire Mind

          by Thomas J. Stanley
          The Millionaire Mind aims a millions of people who have stored considerable wealth and live in ways that flexibly exhibit their prosperity. The writer reveals the surprising answers to some difficult personal finance questions, presenting them to readers through solid examples.

          Print | eBook


            I Will Teach You To Be Rich

            by Ramit Sethi

            In a friendly, naughty style, Sethi put down a serious six-week personal finance program for those who want to master their finance management with minimum effort. This book is so comprehensive that you feel like you’ve been to a long seminar with an outstanding expert after reading it.

            Print | eBook | Audiobook


              The Automatic Millionaire

              by David Bach

              This book highlights the influence of money by introducing the well-known Latte Factor. The author would make you understand the amount of your money goes to waste, realizing how better you can manage it by making the right selections in spending your money. This book will also help you in identifying where you unconsciously use your money and how those little expenses can be used to make you financially strong.

              Print | eBook


                Women & Money

                by Suze Orman
                Every woman in the world should read this book which is designed specially to empower women. Suze wrote this to help women, face their financial challenges and to make women financially strong. So, if you are a woman then you should read this informative book, which’ll guide you on how you must take care of your finances.

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                Print | eBook


                  You’re So Money

                  by Farnoosh Torabi
                  Aninstructive and realistic finance book which concisely tackles the issues college students are mostly likely to face in handling their own finances. Torabi explains readers how to survive without draining the bank and where to find easy places to save money.

                  Print | eBook


                    Thinking, Fast and Slow

                    by Daniel Kahneman
                    Managing personal finance is a series of decisions and this book,Thinking, Fast and Slow,drives support for the readers by understanding what pushes them to make the decision.

                    Print | eBook


                      Debt-Free by 30

                      by Jason Anthony and Karl Cluck
                      Debt-Free By 30 enlightens the basics of arranging your debt, discovering ways for extra money to repay the debt faster. In this book, readers can cheer up and can learn about credit, health insurance, financing a car and expenses.

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                        The Total Money Makeover

                        by Dave Ramsey
                        It is an incredible book to start with. It is a complete guide to saving fund, starting to invest, getting out of a mortgage, saving for a rainy day, paying off your debt and reaching financial prosperity in your life.

                        Print | eBook

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                          Your Money Or Your Life

                          by Joe Dominguez and Vicki Robin

                          In this era of huge economic ambiguity when everyone is worried about their money and how they spend it, this bestselling book is an essential read. It tells the reader how to pay off debt and cultivate savings, rearrange priorities, solving inner encounters between values and lifestyle, and lot more.

                          Print | eBook


                            The Money Book for the Young

                            by Suze Orman
                            This book again by Suze, Tackle financial problems like student loans, debt, student loan, credit card, debt, and insurance. It communicates straight to people requiring help to deal with finance issues and financial plan for the first time.

                            Print | eBook | Audiobook


                              Beating The Street

                              by Peter Lynch
                              In the book Beating The Street, Peter Lynch describes how to become an expert in handling finance of a company and ways to build a profitable investment portfolio based on your own experience and insights.

                              Print | eBook


                                The Psychology of Investing

                                by John Nofsinger
                                A professor of finance, Nofsinger investigates into the behaviors, psychology influence investors, providing a complete summary on making smart investing decisions for those, who are keen to start their own business.

                                Print | eBook

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                                  7 Money Rules for Life

                                  by Mary Hunt
                                  Mary Hunt is not new to budgeting and personal finance. Although to many she has a background of home economist than an investment guru. This book 7 Money Rules of Life steps out a bit of her old-style comfort zone to comprise lots of facts about financing, retiring, investing and preparation for your financial future.

                                  Print | eBook | Audiobook


                                    Rich Dad Poor Dad

                                    by Robert T. Kiyosaki
                                    This book is an investment classic, and is very informative, worth a read by anybody trying to find firm grip financially. Always keep this book on your shelf.

                                    Print | eBook


                                      The Money Saving Mom’s Budget

                                      by Crystal Paine
                                      Money Saving Mom is one of the best home economists’ book. This book is full of clear guides to getting your family’s financial plan in hand so that you can live the life you want to live.

                                      Print | eBook


                                        The Behavior Gap

                                        by Carl Richards
                                        In this book, Richards centers the senseless mistakes people make again and again financially, buying expensive because of others, buying things that aren’t important — and explains how our natural characters lead us off the track even knowing what is correct.

                                        Print | eBook | Audiobook


                                          The Richest Man in Babylon

                                          by George S. Clason
                                          This Book is read by millions, this precious book embraces the key to success-in the mysteries of the ancients. Constructed on the famous “Babylonian principles”, this bestseller book offers a thoughtful solution to personal finance problems; enlightening the mysteries to saving money, protecting money and earn more money.

                                          Print | eBook | Audiobook


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                                          Last Updated on November 27, 2020

                                          How to Set Financial Goals and Actually Meet Them

                                          How to Set Financial Goals and Actually Meet Them

                                          Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

                                          In this article, we will explore ways to set financial goals and actually meet them with ease.

                                          4 Steps to Setting Financial Goals

                                          Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

                                          1. Be Clear About the Objectives

                                          Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

                                          It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

                                          Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

                                          2. Keep Goals Realistic

                                          It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

                                          It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

                                          3. Account for Inflation

                                          Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

                                          Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

                                          For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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                                          4. Short Term Vs Long Term

                                          Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

                                          As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

                                          By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

                                          How to Achieve Your Financial Goals

                                          Whenever we talk about chasing any financial goal, it is usually a two-step process:

                                          • Ensuring healthy savings
                                          • Making smart investments

                                          You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

                                          Ensuring Healthy Savings

                                          Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

                                          This is the focal point from where you start your journey of achieving financial goals.

                                          1. Track Expenses

                                          The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

                                          Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

                                          If you’re not sure where to start when tracking expenses, this article may be able to help.

                                          2. Pay Yourself First

                                          Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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                                          Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

                                          The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

                                          Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

                                          3. Make a Plan and Vow to Stick With It

                                          Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

                                          Nowadays, several money management apps can help you do this automatically.

                                          At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

                                          Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

                                          You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

                                          4. Make Savings a Habit and Not a Goal

                                          In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

                                          Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

                                          • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
                                          • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
                                          • If you go shopping, always look out for coupons and see where can you get the best deal.

                                          The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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                                          5. Talk About It

                                          Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

                                          Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

                                          6. Maintain a Journal

                                          For some people, writing helps a great deal in making sure that they achieve what they plan.

                                          If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

                                          When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

                                          Making Smart Investments

                                          Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

                                          1. Consult a Financial Advisor

                                          Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

                                          Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

                                          2. Choose Your Investment Instrument Wisely

                                          Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

                                          Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

                                          As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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                                          3. Compounding Is the Eighth Wonder

                                          Einstein once remarked about compounding:

                                          “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

                                          Use compound interest when setting financial goals

                                            Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

                                            Start saving early so that time is on your side to help you bear the fruits of compounding.

                                            4. Measure, Measure, Measure

                                            All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

                                            If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

                                            Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

                                            The Bottom Line

                                            Managing your extra money to achieve your short and long-term financial goals

                                            and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

                                            More Tips on Financial Goals

                                            Featured photo credit: Micheile Henderson via unsplash.com

                                            Reference

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