Finances are an important aspect of life. Each of us feels enabled or limited to varying degrees based on our understanding of and control over managing our money. If we want to enjoy more autonomy in our choices and our lives, personal finance is an important subject to focus on. This subject is not just for millionaires. Personal finance is for everyone – even people who do not earn a regular income. Financial management is something essential to be done regularly and diligently, toward a goal – much like eating healthy or getting physical exercise.
Contrary to what most accountants would have us believe, personal finance is not complicated. There is very little about it which is particularly technical. Here is a short selection of books that are meant for ordinary folk who want to manage money better.
1. Thinking, Fast and Slow
Winner of the 2002 Nobel prize in economics for his work on behavioral economics and decision making, author Daniel Kahneman has shared his wisdom in simplified terms through his excellent book. Thinking, Fast and Slow provides essential insights into the psychology of our behavior. Kahneman discusses several pitfalls connected to our decision making process. Many of our decisions are based on quick, effortless, almost automated thinking, which is highly influenced by our assumptions and biases. The way statistics are presented, regardless of their accuracy, can be highly misleading, and often is. Optimism can cloud judgment and skew decision making. The book has received much acclaim and millions of superlative ratings.
2. Psych Yourself Rich
Authored by personal finance expert and the star of NBC’s Today Show Farnoosh Torabi, this practical book has received favorable reviews. The book emphasizes on constructing a positive mindset as a foundation for better wealth management. Financial success is not subject to some nuanced application of complicated financial theories or the ability to identify rare and lucrative investment opportunities before everyone else. Torabi’s book encourages readers to think that getting rich starts with simple things such as discipline, determination and a positive mindset. In this book readers can find practical real-life applications of how to cut wasteful expense, refuse to being taken for a ride by financial institutions, and to take charge of our finances by developing a more holistic view of money. The author was also seen on Yahoo! Finance, and SoapNet’s Bank of Mom & Dad. The book is available in paperback, hardcover and on Kindle.
3. The Automatic Millionaire
Author David Bach has had success with his series of books with titles such as Smart Women Finish Rich, Smart Couples Finish Rich, and Start Late Finish Rich. This addition to his personal finance series, The Automatic Millionaire – A Powerful One-Step Plan to Live and Finish Rich shows just how much of a penchant Bach has for finishing. As the title suggests, Bach recommends prioritizing and then automating much of personal finance with a view to achieving long term goals with least repetitive effort. Bach outlines the real impact of compound interest. His ability to express complex ideas simply is captured in his description of what he calls the “latte factor”. The book discusses powerful concepts which may be as relevant for early career professionals as for senior folk. Some critics state that The Automatic Millionaire is a mere summarization of Bach’s previous books. For those new to Bach’s series or indeed to personal finance books however, this manual should make for a very good read.
4. The Meaningful Money Handbook
The complete title of the book provides a generous description of what’s inside. The Meaningful Money Handbook: Everything you need to KNOW and everything you need to DO to secure your financial future – has been authored by personal finance expert and podcaster Pete Matthew. The book has received positive acclaim. The author discusses topics that matter most to readers, such as paying off and avoiding debt, savings and investment toward a secure future, financial protection against disasters, and so on. His explanations are composed in simple language meant to be understood by non-experts.
5. The Richest Man in Babylon
Author George S Clason has taken a unique approach to teaching personal finance. He has compiled a number of witty stories originating from ancient Babylon, each of which imparts learning in a fun way. The book conveys powerful messages and its underlying wisdom is as applicable today as it was in prehistory. The Richest Man in Babylon has been a popular title for several years with millions of glowing reviews.