Most Americans today are woefully lacking in financial literacy. A 2018 study by the FINRA Foundation found that only 2 in 5 Americans could correctly answer at least 4 out of 6 questions about simple financial concepts like compound interest and inflation. And our lack of knowledge is hurting us. In a 2019 survey by The National Financial Educators Council, 1,500 Americans said their difficulty understanding personal finance had cost them an average of $1,230 in the past year.
One way to improve your financial literacy is by reading up on it. There is a lot of basic information about financial matters online. But if you want to explore a specific topic in detail, it’s worth picking up an actual book. At your local library or bookstore, there are hundreds of books on all aspects of personal finance, from money management to early retirement.
Of course, there’s no way you could read every single book about personal finance on the market – or even on a single shelf at your library. Fortunately, you don’t need to. Most books on a particular financial topic cover pretty much the same ground. So you only need one good book to teach you what you need to know.
But which one do you choose? Whether you need to get out of debt or increase your personal wealth by investing, these books on various financial subjects are worth checking out.
Books on Basic Personal Finance
Are you a complete newbie when it comes to financial matters? Start your reading with an all-around primer on personal finance and money management with topics including earning, saving, investing, and developing smart money habits.
1. “The Richest Man in Babylon” by George S. Clason
In the 1920s, George S. Clason wrote a series of informational pamphlets for banks and insurance companies to hand out to their customers. But he didn’t simply lay out facts like a textbook. Clason illustrated financial principles through parables – specifically, short stories set in ancient Babylon. The stories were such a hit in 1926 that they were bound together and published as a book.
This classic text remains popular with 21st-century readers because it presents sound financial wisdom in a clear, compelling way. It emphasizes principles like living within your means, saving for retirement, and avoiding risky investments and get-rich-quick schemes. And since this older book is no longer under copyright, you can read the full text for free online at the Internet Archive.
2. “The Index Card” by Helaine Olen & Harold Pollack
If you want a more modern, straightforward approach to personal finance, check out “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated.” It boils down the basics of money management to 10 simple rules short enough to fit on a 4-by-6-inch index card.
The idea grew out of a 2013 interview of Olen by Pollack in which Pollack offhandedly commented that the best financial advice could fit on an index card. It prompted a flood of requests for such a card and eventually inspired the two to turn the idea into a book.
Pollack and Olen focus on simple fundamental rules, such as “Strive to save 10 to 20% of your income” and “Pay your credit card balance in full every month.” Each of these principles gets its own chapter. But they’re also laid out in a list you can copy onto an index card for easy reference. This book is an excellent choice for beginners and anyone who likes easily digestible advice that’s easy to remember.
3. “The Money Book for the Young, Fabulous & Broke” by Suze Orman
Many books about personal finance target their advice toward middle-aged readers – people whose primary goals include saving for retirement and putting their kids through college. “The Money Book for the Young, Fabulous & Broke” is an exception. Orman, a TV financial guru, offers advice specifically for young people in their 20s and 30s who graduated from college with a mountain of student loan debt only to face a weak job market with limited opportunities.
For many of these folks, goals such as buying a home and raising a family seem impossible. They can barely imagine a future in which they don’t have to live with their parents and piggyback on their health insurance policies. In 10 chapters, complete with questions from real people, Orman explains how millennials can overcome the twin obstacles of debt and low pay and achieve financial security.
Books on Getting Out of Debt
For many Americans, debt is a major problem. According to a 2015 report from the Pew Charitable Trusts, 80% of Americans have some form of debt. And nearly 70% say they can’t imagine being debt-free. If you need to get out of debt but can’t see how, these books can help.
4. “The Total Money Makeover” by Dave Ramsey
“The Total Money Makeover” shows up over and over again on must-read lists. Radio host Dave Ramsey breaks down the overwhelming tasks of paying off debt and building up wealth into a series of manageable baby steps. These include creating an emergency fund, tackling your debts one by one through the debt snowball method, and consistently setting aside 15% of your income toward retirement.
Ramsey comes across as strident or scolding at times, a fact he acknowledges by labeling the book’s many sidebars as “Dave Rants.” He’s adamant about the importance of having a written budget and shunning debt at all costs, two views not all financial experts agree with. Nonetheless, numerous financial experts – and ordinary people who have followed his plan – say that for anyone struggling with debt, this book can be life-changing.
5. “Zero Debt” by Lynnette Khalfani-Cox
Lynnette Khalfani-Cox once had $100,000 in credit card debt – and paid all that credit card debt off within three years without missing a single payment. In “Zero Debt: The Ultimate Guide to Financial Freedom,” she explains exactly how she did it and how you can do the same. The book lays out a step-by-step 31-day action plan to create a budget, pay off debt, and put yourself on sound financial footing.
This book is for people who are in way over their heads with debt and struggling to find a way out. Khalfani-Cox gets into the nitty-gritty of how to negotiate with credit card companies and rebuild your credit, exactly what debt collectors can and can’t legally do, and how to find a reliable credit counselor. She keeps her language simple and her advice realistic. When you reach the end of her monthlong plan, you won’t be out of debt yet, but you’ll have the tools in place to get there and remain debt-free for life.
6. “Broke Millennial” by Erin Lowry
In “Broke Millennial: Stop Scraping By and Get Your Financial Life Together,” financial expert Erin Lowry offers advice specifically for millennials struggling to pay off student loans and build a secure financial foundation. Lowry goes beyond the basics of budgeting and investing to explore the psychological side of money. She helps the reader understand their relationship with money and how it can help or hurt them, discusses ways to handle tricky situations such as splitting a check with a group of friends, and talks about how to get “financially naked” with a partner and talk honestly together about money.
Since the book is geared toward the younger set, she peppers it with amusing stories and hashtags like #GYFLT (get your financial life together) and gives the chapters whimsical titles, including “Is Money a Tinder Date or Marriage Material?” and “Paying Rent to your ‘Rents.” Yet wrapped in the humor is vital information about paying off debt, buying a home, and saving for retirement. In a New York magazine roundup of personal finance books, financial expert Farnoosh Torabi says Lowry’s book perfectly “captures the financial zeitgeist of this generation.”
Books on Investing
There’s no financial topic quite as complex or confusing as investing. In a 2016 survey of young Americans by Bank of America, the No. 1 subject 18- to 26-year-olds said they wish they’d learned more about in school was how to invest. If you also feel like your school curriculum fell short on this subject, these books are good choices for rounding out your education.
7. “The Intelligent Investor” by Benjamin Graham
Investing genius Warren Buffett describes “The Intelligent Investor: The Definitive Book on Value Investing” as the greatest book on investing ever written. First published in 1949, this classic work focuses on value investing, or choosing stocks with a low price-to-earnings ratio – in other words, buying stocks that sell for a low price relative to what their companies are worth.
Graham stresses his book isn’t a “sure and easy path to riches.” Instead, it promises to help you achieve sustainable, long-term gains in the market while minimizing the risk of losing your shirt. Graham’s old-fashioned writing style is a bit dry at times. But his timeless advice about seeking value is as relevant today as it was 70 years ago.
8. “The Little Book of Common Sense Investing” by John C. Bogle
The late John C. “Jack” Bogle, founder of Vanguard and inventor of the index fund, is a legend in investing circles. Given his history, it’s not surprising “The Little Book of Common Sense Investing” focuses on the benefits of investing through index funds. He argued that trying to beat the market nearly always backfires, costing you more in fees and taxes than any marginal gain in returns. According to Bogle, the soundest advice for investors is, “Don’t do something. Just stand there.”
Bogle’s book covers just about anything you want to know about this investing strategy, including minimizing taxes, choosing long-term winners, and finding the funds with the lowest fees. There’s also a chapter on exchange-traded funds, a newer type of index fund you buy and sell like individual stocks. The book offers a useful foundation for first-time investors and a guide for more experienced investors who want to give the “just stand there” strategy a try.
9. “The Book on Rental Property Investing” by Brandon Turner
Brandon Turner is a real estate investor and co-host of the popular personal finance podcast “BiggerPockets Podcast.” In “The Book on Rental Property Investing,” he lays out a detailed, step-by-step guide to making your fortune through a specific type of investment: owning rental properties. This type of investment is more work than just putting money into an index fund, but it has the potential to become a lifelong source of passive income.
Turner starts by explaining why he considers buy-and-hold rental investing “the best, safest, fastest path to financial freedom.” Then, in 20 concise chapters, he lays out all the basics of how to do it. He walks you through the process of buying and renting: finding properties, identifying a good value, making an offer, negotiating, securing financing, home inspection, closing, finding good tenants, and managing and maintaining your rentals.
The book also pays a lot of attention to what not to do, explaining the biggest mistakes you can make as a real estate investor and how to avoid them. And Turner’s writing style is light, engaging, and readable.
10. “The Only Investment Guide You’ll Ever Need” by Andrew Tobias
First published in 1978 and last revised in 2016, Andrew Tobias’ “immodestly titled book” – for which he blames his publisher – has a perfectly modest goal: to set you on the simplest, surest path to financial security. Tobias doesn’t focus on the intricate details of a specific type of investment. He focuses on the big picture.
He devotes the most space to stocks but also covers other investments, such as treasury inflation-protected securities (or TIPS, which he loves) and commodities (which he deplores). He also offers some sound advice on just about every aspect of your financial life: saving, budgeting, using a retirement plan, estate planning, and teaching your kids about money.
However, the main reason “The Only Investment Guide You’ll Ever Need” earns a place on this list is Tobias’ writing style. This may not be the only investment guide you’ll ever need. But it’s probably the only one you’ll ever read just for the fun of it. In contrast to other guides, which can be dry and technical, Tobias writes in plain English enlivened with jokes and anecdotes that hold your attention – which means his useful advice has a chance to sink in. If you find most books about money intolerably dull, this one is an excellent choice for you.
Books on Buying a Home
One major financial goal for many people is buying a home. For most people, it’s the biggest purchase they’ll make in their lives – and next to having a child, it could be the biggest decision, period. So naturally, it makes sense to learn as much as possible about the process before you take the plunge. These three books are good places to start.
11. “Home Buying for Dummies” by Eric Tyson & Ray Brown
All the books in the “Dummies” series have the same purpose: to explain a complex topic, which could be anything from a computer language to a sport, to people who know absolutely nothing about it. “Home Buying for Dummies” takes the same approach, covering all the basics in an easy-to-digest form.
This book covers every step of the homebuying process, from deciding whether you want to buy a house at all to moving into your new home. It explores how to figure out how much house you can afford, shop for a mortgage, choose a real estate agent, hunt for houses, make an offer, get a home inspection, get the best deal on a mortgage, and prepare for your closing.
The entire book is written in plain English and peppered with icons to alert you to key features. For instance, a target icon marked “tip” indicates an important strategy to remember. A bomb marked “warning” alerts you to pitfalls to avoid. And a magnifying glass marked “investigate” lets you know when you need to do a bit more research on your own. As a supplement to the book, there’s a “Home Buying Kit for Dummies” that provides additional guidance.
12. “Buying a Home: The Missing Manual” by Nancy Conner
The “Missing Manuals” series is primarily a set of guides to computer software and hardware. But it’s branched out into financial topics, another area of life that ought to come with instructions. In this volume, Conner, a real estate investor, walks you through the entire process of buying a home from start to finish.
“Buying a Home: The Missing Manual” teaches you how to put together a crack real estate team, including a real estate agent, mortgage lender, and lawyer. It helps you choose the right house in the right neighborhood, then figure out how much to offer on it. It explains the nuts and bolts of financing options, inspections, and paperwork. And it does all this in simple language and handy, bite-size chunks of information.
13. “NOLO’s Essential Guide to Buying Your First Home” by Illona Bray, Alayna Schroeder & Marcia Stewart
The legal website NOLO is the top place to look online for trustworthy information on legal topics. It also offers an array of do-it-yourself forms, books, and software, including this volume on homebuying. “NOLO’s Essential Guide to Buying Your First Home” covers most of the same topics as the “Dummies” and “Missing Manual” books, but from a different angle. It focuses on all the legal ins and outs of the homebuying process.
Although three attorneys wrote this book, it doesn’t rely on their expertise alone. The NOLO guide draws on the knowledge of 14 experts in the homebuying field. A real estate agent offers tips on how to dress for an open house. A mortgage broker explains the dangers of oral loan approvals. And a closing expert discusses the importance of title insurance. It’s like having a team of experts on call to help you navigate the tricky waters of home shopping and reach your destination safe and sound.
Books on Financial Independence
The ultimate financial goal in many people’s lives is financial independence – having enough money that you no longer need to work for a living. You can reach this goal by taking two very different paths: accumulating the kind of vast wealth that can support you in style for the rest of your life or paring down your spending until you can live happily on a much more modest income. No matter which route you want to take to financial independence, there are books to help you get there.
14. “The Automatic Millionaire” by David Bach
Of David Bach’s 12 books on personal finance, 11 have been national best-sellers, and two – including “The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich“ – have hit the No. 1 spot on The New York Times best-seller list. In this volume, he outlines a plan not to get rich fast but to get rich slowly and surely over your lifetime.
The key to Bach’s system is setting up an automatic investment plan through which you invest just a few dollars every single day. He explains how to redirect a few dollars per day into investments by looking for what he calls your personal “latte factor” – small regular expenses that add up. By “paying yourself first” and making your plan automatic, he argues, you can build wealth steadily, even if you don’t earn a high income.
15. “The Millionaire Next Door” by Thomas J. Stanley & William D. Danko
Unlike most personal finance books, “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” doesn’t lay out the authors’ formula for success. Instead, it takes a look at real people who amassed a net worth of at least $1 million and how they did it.
Through interviews and research, the authors uncover the surprising truth that most millionaires don’t live the way most Americans think they do. They tend to live in modest homes, drive old pickups, and generally spend frugally, taking satisfaction in real assets rather than conspicuous consumption. Most of all, they’re “prodigious accumulators of wealth” – people whose net worth is high compared to their income. Based on these findings, the authors identify traits real millionaires have in common and outline seven steps to take if you want to become a millionaire yourself.
16. “Your Money or Your Life” by Vicki Robin & Joe Dominguez
First published in 1992, “Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence” is the book that started the FIRE movement. FIRE stands for “financial independence, retire early.” Its premise is that financial independence doesn’t rely on making as much money as possible. It relies on spending as little as possible so you need only a modest nest egg to support yourself.
The authors describe money as something you must pay for with your “life energy.” They say most Americans are spending far too much time in pursuit of money and getting far too little in return. And if the constant daily grind doesn’t bring happiness for most people, it makes more sense to live on less and retire early so you can live the life you truly want. The book explains how to figure out how much money you need to live happily, how much you need to become financially independent, and how to reach that goal.
17. “How Much Money Do I Need to Retire?: Uncommon Financial Planning Wisdom for a Stress-Free Retirement” by Todd Tresidder
Not everyone wants to retire early. For some, it’s enough to know they’ll be able to retire in comfort when they reach their 60s or 70s. To achieve this goal, they rely on formulas to tell them how much to save for retirement at every stage of their career.
According to financial coach Todd Tresidder, this strategy simply doesn’t work. These formulas have too many variables that are impossible to predict, including how your salary will change over time, how much your investments will earn, the average rate of inflation, when you’ll retire, and how long you’ll live after retiring. And even if they could somehow pin down all those numbers, most people can’t manage to save a large percentage of their income every year, choose the right investments for that money, and avoid tapping into their nest egg in a financial emergency.
In “How Much Do I Need to Retire?: Uncommon Financial Planning Wisdom for a Stress-Free Retirement,” Tresidder recommends a different approach. Instead of using just one model to calculate your “retirement number,” he uses three different, complementary models. By looking at all three together, you can get a more complete picture of what you need for retirement. Using this strategy, he says, many of his clients have been able to retire years earlier than they expected.
Tresidder supplements his three-model method with tips on topics like planning the life you want in retirement, reducing the amount you need to retire on, and saving for the future without slashing your spending today. And he does it all in a casual, conversational style that’s easy to follow.
If you want to dive deeper into a specific topic, look beyond this list. As you search for new finance books, examine them carefully to ensure they’re useful and reliable sources. Look at the authors’ histories and credentials to see what makes them qualified to advise others on financial matters.
For instance, are they professionals trained in a particular area, like Jack Bogle or Benjamin Graham? Are they writing from personal experience, like Lynnette Khalfani-Cox? Or have they interviewed lots of other people to learn from their experiences, like Thomas Stanley and William Danko? Learning about the authors helps you avoid falling for bogus investment advice and get-rich-quick schemes that have no real results to back them up.
Also, since one of the keys to gaining wealth is to keep a lid on your spending, it makes sense to pick up the books you want as cheaply as possible. Along with your local library, check out secondhand bookstores, online sellers, and book swaps to save money on books.
Do you have a favorite personal finance book that didn’t make this list?