My 7 Favorite Money Books
If you’re searching for that last stocking stuffer or using the time off work around the holidays to expand your knowledge, look no further. A money management book can be a great gift for that loved one who is starting to get a handle on their finances. Or for your friend who is an expert. They’re generally affordable, practical, and offer key insights into money.
But, books on personal finance and money management are about as abundant as the stars. I’ve read a lot of them so trust me, I know. Most of them are crap. They’re too vague or specific to be useful, or don’t offer any new insights.
I want to go over a few of my favorite books that will help you get a better understanding of yourself, your money, and how to manage them both. Just a reminder that I don’t take part in any affiliate programs. Nobody is paying me to say these books are good, and I won’t make any money if you buy them. These are my honest reviews.
Okay, let’s get to it.
The Richest Man In Babylon
This is a pretty old one, but the tenants it teaches still hold up to this day. It is written as a series of fictitious parables from the ancient city of Babylon. It presents several key insights into managing your money well and getting rich the right way.
It’s a pretty short read, and perfect for beginners. It presents the information in a fun narrative format that is a lot easier to follow than most non-fiction personal finance books. Just because it’s short doesn’t mean it isn’t valuable though.
In a series of parables, author George S. Clason covers how to make and manage your money. He covers how to stop living paycheck-to-paycheck and start thriving.
Who I Recommend It For
This book is great for beginners. It’s the perfect gift for younger relatives getting started managing their own money for the first time. It could be your teenager with her first job or a nephew who recently graduated from college.
I personally re-read it about once a year. This keeps the financial principles it espouses front and center in my day-to-day life.
Nudge
I’ll start out with a disclaimer: this book by Cass Sunstein and Richard Thaler isn’t about personal finance. Or money management. But it makes my list of top books about managing your money because it has amazing insights about managing yourself and your decisions.
In it, Sunstein and Thaler argue that humans are not rational creatures. We don’t always make decisions that are in our own best interest. Even if we have all the information to know what we should do.
We are all influenced by logical fallacies, social pressure, and cognitive biases. These cloud our judgment and make it difficult to make the right decision. Nudge provides valuable insights into how our brains work, and into how we can help ourselves make smarter money choices.
Whether it’s saving for retirement or not overspending on your credit cards, this book can teach you ways to structure your decisions that give you the best chance of success. While it’s less money and more psychology, the two are intertwined. It’s a heck of a lot easier to make good money decisions if you know how to make good decisions in general.
Who I Recommend It For
This one is a little more advanced. With fewer practical, concrete money takeaways as some of the others on this list, it requires a lot more inferences to pick up on valuable insights. In other words, this book is work.
I’d recommend this one to people who are interested in psychology, or who already have a good grasp on the practicalities of managing money. If you have a decent system in place but want to understand why it works, this is the book for you.
I Will Teach You To Be Rich
Of those on the list, this is one of my personal favorites. In it, author Ramit Sethi lays out a super approachable, no-nonsense method for managing your money. His system hinges on automation, responsible investing, and smart credit card usage. All three things that are near and dear to my heart.
Sethi admits that the title seems a little scammy, and his style can be pretty abrasive to some. Neither of those detracts from this book being rock solid. The advice he offers and the systems he teaches are pretty much fool-proof. In the book, he outlines a 6-Week program to stop letting your money control you and flip the script.
His systems are not perfect, but they’re a fantastic start. In fact, he talks about focusing on the “85% solution,” or getting yourself most of the way there. Then, you could spend hours and hours agonizing over the remaining 15 percent. Or, as he suggests, you should get out of the spreadsheet and enjoy your newfound life.
This is incredible and lines up very well with what I try to teach my clients.
Who I Recommend It For
This book is great for people who love clear, fool-proof instructions. Sethi lines out an exact system that anyone can follow, and even goes so far as to name specific banks. If you know you need to put a system in place, but don’t want to spend any time creating it yourself, this is the book for you. You can follow his system out of the box and it’ll help you get much better control of your money.
It’s also great for people who feel neglected or turned off by the traditional personal finance industry. Sethi takes an unconventional, irreverent approach and it lands. If you’ve tried to read money management books in the past but found them boring or holier-than-thou, this is the book I’d suggest you read.
Your Money Or Your Life
“Your Money Or Your Life” by Vicki Robin and Joe Dominguez is all about seeking to reform your relationship with your money. Like "I Will Teach You To Be Rich," this one that prescribes a concrete money management system to be followed to a T.
“Your Money Or Your Life” is a favorite of the Financial Independence, Retire Early (FIRE) community for good reason. The system it details is all about increasing the buffer between how much you’re spending and how much you’re taking in. It details finding the “crossover point,” or the point where you no longer need to work because you have enough money set aside.
I like “Your Money Or Your Life” for how well it integrates your money into the rest of your life. After all, money is a key part of most of our activities, yet so many of us treat it as a separate domain. It also forces you to get honest with yourself about your current financial situation, as well as where you’re trying to get.
This book outlines an entirely new way of thinking about your money. It lays out a new money roadmap that you can follow to live your dreams. The system Robin and Dominguez outline takes work, but it’s sound. It’s based on research as well as their own personal journeys.
Who I Recommend It For
This book is great for people looking to level-up their understanding of their money. If you feel like you’re doing okay managing your money but never seem to get any traction, this book could offer some useful insights. The advice is practical and easy to follow but still makes you think.
It’s also a great option for people interested in taking a less-conventional path in life. Whether that’s people interested in FIRE or wanting to mix things up a little. By reframing how you think about your money, you can find you’ll be able to pull the trigger on your dreams sooner than you thought. What’s better than that?
Mindset: The New Psychology of Success
Another one that isn’t technically about money. Sensing a theme? “Mindset” by Carol S. Dweck, Ph.D. has a pretty obvious name. No burying the lede here. It’s all about how the way you think can result in your success or your failure.
If you run in the same circles I do, you’ve no doubt heard about the growth mindset versus the fixed mindset. This book, and Dweck’s research as a whole, is where those terms originated.
Dweck, a professor at Stanford, spent decades researching mindset and success and found that the way we think is one of the largest factors in our long-term success. People with a growth mindset, who believe in the ability to grow, evolve, and learn, are far more likely to achieve sustained success than those with a fixed mindset.
This can apply pretty directly to money management. If you believe you can grow your wealth and your understanding of money, you are more likely to achieve financial success. If you believe you’ll never be good at money, you can’t learn how to get out of debt, or some other excuse, you may have a fixed mindset.
Dweck outlines her research on the two mindsets, as well as some steps you can take to switch from a fixed mindset to one of growth. It’s powerful stuff.
Who I Recommend It For
This one is a great gift for that stubborn friend who keeps blaming their problems on the world. “I can’t save because…” or “I would do that, but…” are both strong indicators of a fixed mindset. I’ve worked with clients who have fixed mindsets, and it’s like running into a brick wall. They have come up with some external factor to blame for every single one of their money problems. This is because they believe their capacity to change is limited, and they’re stuck doing the same things with money they’ve always done.
If you know someone who is like that, or if you are, this book has the power to transform your life. By adopting a growth mindset, you can start managing your money so much better than you ever thought possible.
The Millionaire Next Door
“The Millionaire Next Door” by Thomas Stanley and William Danko is a deep dive into how the other half lives. And the results are… boring. It teaches valuable insights into money management, wealth accumulation, and checking your assumptions at the door.
Stanley and Danko studied millionaires and compiled their demographics to find something interesting: millionaires are disproportionately concentrated in middle-class areas, not in the places generally thought to be affluent.
In other words, the authors found that becoming a millionaire has a lot more to do with how you handle your money than how much you make. Most millionaires lead lives that from the outside look incredibly normal. They aren’t living in mansions and wearing Rolex watches. They’re driving Toyotas and saving as much as they can.
“The Millionaire Next Door” makes the case for adopting a habit of wealth accumulation, as opposed to spending in line with your income. It’s a solid book about underlying habits and beliefs, with a lot of real-world studies to back up the insights.
None of this is to knock those who want to get signs of their wealth. I’m actually all for that, as long as they’re actually signs of your wealth and not signs of the wealth you wish you had.
Who I Recommend It For
This is a good one for that friend who is obsessed with “how the other half lives.” The person who can’t stop watching YouTube tours of mega-mansions and dreaming about what they’ll do when they finally win the lottery. See, most of us confuse the wealthy and the ultra-wealthy. When we think of how millionaires live, we picture the lives of people with hundreds of millions or even billions of dollars. It only takes $1 million to be a millionaire.
This book is a great reality check for those who think wealth is unattainable for them. It shows that through solid habits, clear goals, and hard work, you can get where you want to go. It just might not look exactly like you expected.
The Power of Habit
The last book on my list is yet another book that’s actually about psychology, not money. By now though, you should be getting the idea. Money is psychological, so a greater understanding of the latter will help you manage the former.
“The Power of Habit” by Charles Duhigg is all about the science of habits, how they’re created, and most importantly how we can change them. It outlines something called the Habit Loop, which is the pattern underlying any given habit. Once you know what the pattern is, you can begin to observe it and even break it to get out of your outdated habits.
We all spend a lot more money than we realize because of our habits. Habits are a way for your brain to take a short-cut, which means they usually happen without us even being aware. You end up in the McDonald’s drive-thru every Friday after work, even though you planned to go straight home and eat leftovers this time. Why? Habit.
Duhigg writes in an approachable style, but the science is sound. He breaks everything down into easy to follow steps and the book is chock full of practical advice.
Who I Recommend It For
Everyone. Seriously, it’s that important. Not only can it make you better with your money, but it can also make you a better person. You can finally break a lot of the habits that are holding you back from success in every area of your life. You can replace them with habits that actually help you reach your goals.
We all depend on our habits for so many financial decisions every single day. The Power of Habit will help you ensure you have the best ones in place so you can make the best money decisions possible.
Conclusion
While there are numerous other personal finance books that I’m sure offer valuable information, these are the few that I find myself returning to are recommending the most. There’s something on this list for everyone, no matter where you are on your financial journey.
One more note: I haven’t included any links to buy these books. I’m sure they’re all available on Amazon and wherever else books are sold. Better yet, find a local book store and get them there. Support small business, and all that.