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Best Personal Finance Books

Updated on December 4, 2012

Beware of Ferrari's!

Contrary to popular belief, driving a fancy car is more a sign of debt than a sign of wealth.
Contrary to popular belief, driving a fancy car is more a sign of debt than a sign of wealth. | Source

Great Personal Finance Books are About Lifestyle Choices

The best personal finance books are not about becoming rich. They're not about finding hot new investments, becoming a real estate tycoon or trading risky options.

Instead, the best personal finance books are about making lifestyle choices to give you the financial freedom to live life on the terms that you choose. Having choices, after all, is one of the keys to personal happiness.

The personal finance books below will show you how to make smart lifestyle choices to promote your financial security. They also make great gifts, especially for younger adults just starting on their financial path.

If you only read one personal finance book, this should be it!

"The Millionaire Next Door"

This book presents the surprising results of the authors' extensive research on America's millionaires and their common traits. The twist is that most millionaires do not live the glamorous lifestyles of the glitterati, but instead live rather ordinary lives except for their skills at financial planning.

The book is organized along seven common traits shared by many millionaires, including:

  1. They live well below their means;
  2. They use their time, energy and money in efficient ways that build wealth;
  3. They believe in financial independence more than displaying their wealth;
  4. They did not rely on their parents to make them financially successful;
  5. Their children are economically self-sufficient;
  6. They are skilled in targeting market opportunities; and
  7. They chose the right occupation.

If you only have time for one personal finance book, read "The Millionaire Next Door".

"The Total Money Makeover"

In "The Total Money Makeover", radio talk-show host Dave Ramsey takes square aim at bad habits that keep many people in debt and prevent them from building wealth. His message is simple: work hard; pay what you owe; and stay out of debt.

His book introduces a series of "baby steps" he exhorts his readers to take, including:

  1. Save $1,000 to start an emergency fund;
  2. Then pay off all non-mortgage debt from smallest to largest;
  3. Then save up three to six months of expenses to complete the emergency fund;
  4. Then invest 15% of household income in Roth IRAs and pre-tax retirement accounts;
  5. Then work on college funding for children;
  6. Then pay off your mortgage early; and
  7. Then build wealth and give.

Mr. Ramsey's diatribe against debt would have served people well during the financial crisis.

"Your Money or Your Life"

This book provides nine steps for transforming your relationship with money. The goal of this process is to achieve financial independence.

The organization of this book revolves around the nine steps, which are:

  1. Making peace with the past;
  2. Being in the present - tracking your life energy;
  3. Where is it all going? (The Monthly Tabulation);
  4. Three questions that will transform your life;
  5. Making life energy visible;
  6. Valuing your life energy - minimizing spending;
  7. Valuing your life energy - maximizing income;
  8. Capital and the crossover point; and
  9. Managing your finances.

"Your Money or Your Life" is filled with real-life exercises to help you understand the role money plays in your life. By actively following them, you'll develop a better relationship with money and learn how to transform your life to achieve financial independence.

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    • rfmoran profile image

      Russ Moran 4 years ago from Long Island, New York

      Outstanding hub, voted up useful and awesome. It's great the way you summarize the major points of each book.

    • stephanieb27 profile image

      stephanieb27 4 years ago from United States

      I've read the first two. I look forward to reading to Your Money or Your Life.

    • hisandhers profile image

      hisandhers 4 years ago from Toronto, Ontario, Canada

      I thought the Millionaire Next Door was great and I've definitely noticed the benefits of applying some of those principles to my own life. I'll have to check out the other two. Great suggestions!