What separates the rich from the poor? While the answers vary, one factor is financial literacy, and we have a list of books below which can help educate you about all aspects of money. Some of the other factors between rich and poor is luck, lack of opportunity for education, misfortune, or being born into a low-income family. These are valid answers for many people – but the truth is, “America is still is the land of opportunities.” The books we have listed below will help you improve your financial literacy skills. Get assistance with understand money, spending, saving, and how to build wealth from some great books.
Maybe you worry that you didn’t learn anything about how to manage your money in school. Or, perhaps you’re in your mid-thirties and just started thinking about your personal finances and long-term goals such as retirement. If so, you’re not alone.
Financial literacy is at an all-time low. According to Forbes Magazine, two-thirds of adults in the United States can’t pass a basic financial literacy test, and many households making six figures are still drowning in overwhelming credit card debt. Meanwhile, one in three American adults has less than $5,000 saved in retirement.
Compared to other countries, the U.S government provides hundreds of billions of dollars in financial assistance to low-income families to try to help them become self-sufficient and successful. But lack of financial knowledge is still a barrier, but many books can help people increase that awareness. They can help you leverage the housing assistance, food stamps, health insurance, grants for education, and countless other programs from the government for struggling people to get back on their feet.
The U.S census reported that there is still over 35 million Americans living in poverty and the cycle continues for generation and generation, also known as the “poverty cycle.” Jim John once stated that “you become like the five people you spend the most time with”. The brain is a very adaptable organ. Like it or not, your family background, parents behavior, childhood upbringing, and the environment plays a significant role in climbing the economic ladder.
But, how do you get ahead if life to increase financial security? How can you break the poverty cycle or living check to check and finally end the sleepless nights and anxiety about upcoming bills and rent? The simple answer is- mindset and knowledge. Both can be obtained through books. In fact, it is one thing that most successful people have in common. They read a lot of books, and it is part of their daily lifestyle.
People read every day, such as text messages and social media posts. The key difference is that separates rich and poor people is that successful people would much rather be educated than being entertained.
If this describes you, don’t panic. Personal finance doesn’t have to be a dry, boring topic. There is a wealth of information available about personal finances, including thousands of books that are easy-to-read, fun, and accessible. Here are favorites that have topped best-seller lists for good reason. Below, you will find a list of life-changing books about money, overcoming poverty and financial mistakes from successful people that can provide solutions to your financial problems. We also write a quite a bit about this on our blog.
Best Book For Living On a Budget & Frugality
Your Money or Your Life (2018) by Vicki Robin and Joe Dominguez: Imagine being a situation in which a robber points a gun at you saying, “your money or your life?” Of course, you would choose to live. In this classic personal finance book, Robin redefines “frugality” as the sense of having enough. According to Robin, frugality isn’t about limitations but about making choices that increase your quality of life.
Each day, we exchange precious hours of life for a paycheck, and we prioritize money over life. The authors reveal an important concept in this book: Money= Life Energy. In other words, you are trading a certain amount of life energy for money. For example, if you make $20/hour and you spend $1000 on the latest iPhone, then you have traded 50 hours of your life energy. (Actually more hours depending on your tax rate which varies per person…it is probably more like 60 to 70 hours of your life energy). This fun conversion is useful whenever making purchases.
Money should be treasured and be treated with care and consciousness because it is a certain amount of your life and there is no getting it back. Do not know how to do this? the book will help, or look into technology such as apps on a smartphone. As there are many tools out there, and even find the best saving apps on your computer or smartphone.
For example, many people work in jobs that barely cover their child care, mileage and gas, wardrobe costs, and other job-related expenses. By the time they add up what they spend to have the job, they’re lucky if they break even. With a little frugality and ingenuity, it’s possible to work less and have more. Robin urges readers to calculate their real wage and determine if it’s actually enough for the work that they do. The simple, straightforward writing guides readers through nine steps to achieving financial independence, complete with exercises and handouts to keep readers on track
Your Money or Your Life offers seven steps to transform your relationship with money by becoming conscious of spending, earning and achieving financial independence. This reveals that a person’s financial situation is a reflection of inner values and beliefs. Regardless of your income level, Your Money or Your Life teaches readers how to build a stable long-term financial life, instead of just making a living.
The Automatic Millionaire by David Bach touches on several different financial literacy topics. It of course is an investment book. But is also stresses budgeting and living within means. There are many stories in the book as well as resources. Find lists of companies, investing techniques, websites, coupon techniques, banks, and even smart phone applications that can help you save money and make your money work for you.
Many financial gurus offer a five-step plan or a ten-step plan. Others try to get readers on board by pushing some kind of strict, 30-day challenge. Not David Bach. In The Automatic Millionaire, Bach advocates for an ultra-simple one-step plan. That’s it! Just one step to live rich and finish rich. In addition to being simple, the book is a fun, quick crash course that reads more like a parable or short story than a financial guide book. Bach’s classic advice book was so popular when it first came out, that it spent 31 weeks on The New York Times Bestseller List.
Best Book for Living a Simple Lifestyle
The Millionaire Next Door: by Thomas Stanley and William Danko: Originally published in 1996 and revised in 2010. This book is based on a study on 1,000 self-made millionaires over a 20-year period. This isn’t a “how to become a millionaire book,” instead it focuses on action, thoughts, and observations from millionaires and how it differs from low income and middle-class workers. For some people, the term “millionaire” often means
- Inherited money from wealthy parents or relatives.
- Advance degrees from prestige universities.
- Millionaires are smarter or more intellectually gifted.
- The wealthy focus on passive income opportunities.
However, the research study in “The Millionaire Next Door” indicated otherwise. The study found that 66% of the millionaires received no financial help from parents and some self-millionaires attended regular colleges, and some didn’t even attend. This book reveals that obtaining is a result of living a lifestyle of hard work, planning, perseverance, and self-discipline. They learned about financial literacy among other skills.
The authors found that self-millionaires had a record of consistent work ethic, they choose employment with growth in which they can become “self-employed,” they lived a conservative lifestyle, and they were cautious with their time, money and energy.
Books on Investing
There are several and they cover all levels of experience. A Random Walk Down Wall Street by Burton G. Malkiel is great for beginners. It help readers understand what stocks are as well as mutual funds. It touches upon the psychology of investing as well as reviews various types of investment and retirement accounts, including 401Ks.
Investing can be complicated. There are countless terms to know, whether Exchanged Traded Funds, options, S&P 500, margin, bonds, and so many more. Maybe the best investment book we have read, that provides definitions on all these terms and countless others, is The Road to Wealth: A Comprehensive Guide to Your Money–Everything You Need to Know in Good and Bad Times by Suze Orman. It is literally of dictionary of thousands of investment as well as financial literacy terms.
The New Rules of Retirement by Robert C. Carlson : This book covers everything having to do with retirement. Both saving/investing for it as well as living in retirement on that income that you have from your portfolio. Many people also need additional support during their retirement, such as tips on socializing or just how to find themselves as their identify may have been tied up in their job. Robert Carlson touches on all that as well.
The Bogleheads’ Guide to Investing by Taylor Larimore and Mel Lindauer takes a simple approach to investing. It focuses on the approach of Vanguard and how using low cost index funds is often the easiest yet most effective way build wealth. It is great for long term wealth creation.
Secrets of the Millionaire Mind by T. Harv Eker, is a great book about investing and is the best for breaking bad money beliefs. There are a number of personal finance books that raise the idea that people have a relationship with money, including ingrained money habits and beliefs that either push them forward or hold them back. Think and Grow Rich by Napoleon Hill, Rich Dad, Poor Dad by Robert Kiyosaki, and The Millionaire Next Door by Thomas J. Stanley come to mind.
However, Elker’s book is unique in the way that it examines the millionaire mindset and lays out specific steps for overcoming the money beliefs that are holding you back. Whether investing, passive income or debt, Secrets of the Millionaire Mind is a great resource.
Best Book for Making Financial Decisions
The Behavior Gap: Simple Ways To Stop Doing Dumb Things With Money – written by Carl Richards -This book reveals the correlation between emotions and financial decisions. The author is a certified financial planner, who grew frustrated by witnessing his loved ones struggle financially by repeating the same mistakes over and over.
The Behavior Gap: offers practical financial advice in a humorous tone. The author uses personal stories and visual illustrations that he sketched on napkins in a way that a five-year-old can understand why people continue to make bad financial choices with their emotions, instead of intellect. This insightful book provides information on people’s behavior with money and great advice on making better money decisions.
Best Personal Finance Book to Help Children
Money A to Z by Scott Alan Turner: A personal finance expert, who is also a father of twin 4-year-olds. He was inspired to write this engaging and informative book to help parents raise money-smart kids and teach them how to become proficient in financial literacy.
Money A-Z contains fun and simple lessons about money- including the importance of money, sharing, helping and giving. Some examples include: “W is for wants”- wants are things you hope to have but don’t need and “M” is for Money- You earn money by working. It also talks about passive income. This book provides children with an early understanding of personal finance by using letters of the alphabet.
The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous and Smart About Money by Ron Lieber : As we write about on this website, it is so important to talk to your kids about money. Involve them in your budgeting process. Talk about you income as well as expenses. This book by Ron Lieber talks about how important that is to do as well as the Psychology behind it. Not only that, it walks parents through the best process for how to discuss checking accounts, credit cards, saving accounts, and so much more. There are even discussions on how kids can volunteer or give back to charity and how to talk to them about money and finances during the “lean” times. Read more ways to teach financial literacy to children.
Best for Millennials: Why Didn’t They Teach Me This in School? by Cary Siegel. This funny, candid book is subtitled 99 Personal Money Management Principles to Live By. 99 may sound like a lot, but these principles are divided into eight easy-to-digest lessons that can help twenty and thirty-somethings get started on the right path for a stronger financial future. Each lesson is broad enough to be helpful and specific and tailored enough to be memorable.
Siegel is a retired business executive who began the book as a gift to his five children as they graduated from high school and college before making it available to recent grads worldwide. Of course, the book is also a fun read for learners of any age who want a quick refresher course on personal finance basics.
Best Book for Breaking the Poverty Mindset
Spirit Driven Success by Dani Johnson: This powerful inspirational book is about a young girl that became pregnant at seventeen. She refused to have an abortion but gave that baby up for adoption. At age 21, she became a top sales representative for a company. Around that time, she met a man, quickly got married and he left her broke with massive credit card debt. She lost her job, evicted from her apartment and was homeless living in her car, with just $2.03 in her bank account. She was depressed, suicidal and was even using drugs.
Within two years, she started a business and became a millionaire at age 23. The title for this book is “Spirit Driven” because the author is a Christian but was condemned for abortion by the people from her church. Dani Johnson uses the bible and God’s teaching to achieve success.
Best Financial Book for Millennials
Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry: This book provides step-by-step instruction for people in their 20’s to early ’30s on how to go from completely broke to financially secure. Go from a low to moderate income to a higher tax bracket. Broke Millennial covers many modern situations for those graduating, entry-level jobs, the gig economy, living at home, side hustling and other Millennial issues like getting engaged and married.
Broke Millennial is a personal finance 101 book for people who didn’t learn the basics in school or from parents such as managing student loans, improving credit scores, budgeting and investing. As most school do not teach this at all, which is a huge challenge to low income families.
A few chapters in this book focused on the psychological and social issues revolving money and how your background and upbringing affect your relationship with money. This book is great financial literacy for millennials with poor work and money habits that were passed down through generations. It provides insightful information on breaking the cycle of being broke and struggling.
The author (Erin) is a millennial herself and worked as a barista at Starbucks and babysitter in New York City, outer-borough Queens apartment to make ends meet after graduating with honors from a private university. At age 25/26, things started to get better with her blog and freelance writing. Erin offers fresh, practical advice on money, relationship, and life. Some common topics include financial conversation with friends, getting financially naked with a partner- such as having early honest discussions about debt, income and/or major red flags like credit card abuse and missing payments.
Readings for Single Mothers
Suze Orman has written a number of books focused on woman and financial literacy. They are meant to teach women about money. they cover everything from investing to taking control of finances, empowering females to take ownership of their finances (and not just rely on a man) and more. While they are focused on females, the truth is that anyone can learn from these books. Some of them include Women and Money, The Road to Wealth, The Money Book for the Young, Fabulous & Broke and others.
Best Book for Recovering From Shopping Addiction
The Recovering Spender by Lauren Greutman: The author is a lifestyle and frugal-living blogger in Charlotte, NC, who shares her personal story of being in $40,000+ in debt. Lauren stresses the importance of owning up to spending addictions. On many occasion, she would hide purchases from her husband. At that time, she recently suffered from a miscarriage and was in the midst of depression. This book focuses on the reason why most end up in debt.
She went on discussing the three main types of shoppers: emotional shoppers use shopping as a tool to distract themselves from stress/anxiety or uncomfortable feeling. Image shoppers are people shop to portray a fake image of success, and trophy shoppers are people who are always looking for ways to complete a collection or an outfit.
The Recovering Spender also includes money conflicts in relationships, the importance of having a budget and spending limit and a 12-step program with details on recovering from a spending addiction. As many families blow their money, and when times are tough, they may find themselves being low income.
Although this book is primarily focusing on spending addiction, it can also be related to other addictions such as alcohol, gambling, and drugs. The Recovering Spender provides inspiration on changing habits and to examine the root source of problems.
The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money by Carl Richards : Many people spend and get themselves into financial trouble from emotional spending. This book touches upon the behavior of spending and gives tips and tricks to try to help you gain control of your feelings. Millions of households spend money to “keep up with the Joneses”. Or they buy stuff to try to impress people who they do not even care about or do not even know. So much of spending is doing to emotions. The book tries to help you decide what is important to you and puts in place techniques to make it happen.
Best for the Time-Strapped: Financial Literacy Podcasts!
This last recommendation is a bit of a cheat because it isn’t a book at all. Who has time for books these days, anyway? Fortunately, there’s an effective solution for multi-taskers, commuters, and people who want to conquer personal fitness and financial fitness at the same time.
There’s a growing body of reliable financial literacy podcasts about personal finance, most of them which are free to listen too. Check out So Money, Stacking Benjamins, and The BiggerPockets Money Podcast, to learn money management basics. If you’re ready for some more in-depth personal finance and investing advice, listen to the InvestEd Podcast, The Tim Ferriss Show, and Financial Freedom.
Read to Learn
The truth is, you don’t have to have tons of spare time or a degree in accounting to learn everything you need to know about personal finances. Pick up one of these quick reads or download a podcast or two and start learning today!
These hand selected books cost under $20 and can be read for free at your local library. These books are filled with inspiration, hope, and resources to break the cycle of living paycheck to paycheck and poverty. Books can be equivalent to a college degree/education, which is useless if you don’t apply the financial literacy skills and knowledge into the real world. Read them by yourself, or even better, read them as a family to share knowledge.
By Jon McNamara