23% of Americans have enough savings to cover six months of living expenses, while 25% of Americans have nothing saved at all.
It’s universally known that saving money is one of the best financial habits you can adopt. Saving money not only helps you in the event of a financial emergency but also provides a greater sense of financial freedom.
If you don’t know how to start investing money, paying off debt, and gaining financial stability, there are several self-help books you can turn to.
Top 5 personal finance books of 2021
Want to improve your finances but don’t know where to start? Check out these easy-to-read personal finance books of 2021!
Your Money or Your Life: 3 Steps of Transforming Your Relationship With Money and Achieving Financial Independence
In Your Money or Your Life, the authors Vicki Robin and Joe Dominguez share the expert advice of using money to achieve your dreams. If you want to learn about personal finance and ways to save more money and avoid needless everyday spending, this book should be on the top of your list.
The idea behind the book is to transform your relationship with money. It carries a nine-step process for achieving your financial goals.
Whether you have to pay off student loans or want to learn how to invest, this book teaches you to manage your personal finances and control your money rather than letting your money control you. You can find deep knowledge on personal finance, freedom, money management, and smart investments.
The book was first published in 1992 but updated quite a few times. It also states that some budgeting plans fail because they force you to do something you don’t want to do. The authors state that the first thing you need to do to improve our financial situation is to adjust our ideas and beliefs about money.
By following the steps mentioned in the book, your relationship with money will improve, and you will reach new levels of comfort. The book doesn’t tell you that you will be broke if you don’t save money. Instead, it creates a balance.
The author, Vicki Robin, talks about how our days revolve around work. None of us are alive at the end of the workday, the way we are at the beginning of it. They state, “We are sacrificing our lives for money, but it’s happening so slowly that we barely notice.”
Three most important lessons and quotes from Your Money or Your Life
- People who want it all can never be considered rich because they can never have enough money.
- “Money is something you trade your life energy for. You sell your time for money. It doesn’t matter that Ned over there sells his time for a hundred dollars, and you sell yours for twenty dollars an hour. Ned’s money is irrelevant to you. The only real asset you have is your time. The hours of your life.”
- Keep in mind that the things you buy from your hard-earned money, which you don’t use or throw away, is money down the drain. It’s like wasting resources and life energy.
Rich Dad, Poor Dad
If you are difficulty managing your personal finances, this book should be on your top list!
Rich Dad Poor Dad is Robert Kiyosaki’s most famous book. The book has sold 32 million copies and is translated into 51 languages. It’s been on the New York Times bestsellers list for over six years and is available in more than 109 countries.
The book is about his two fathers – his birth father (poor dad) and his friend’s father (rich dad) and how they shaped his thoughts about money.
It teaches you how to use the money to build assets. The authors believe that you don’t need to earn a high income to be rich. Robert T. KIyaoski’s poor dad followed the usual path of getting a degree and landing a job. However, their rich dad didn’t take the traditional route. The rich dad didn’t start big and focused on building income-generating assets.
In the book, the rich father teaches Robert Kiyaoski the most important and key lessons about money through their own life experience. One of them is to create assets through their time and small investments.
The book states that working for a company is a short-term solution to a long-term financial problem. The rich people are the ones who don’t work for money. They become rich by smart investing in income-generating assets and let money work for them.
The poor dad and rich dad had opposite habits. The poor dad paid the bills before time, while the rich dad preferred paying the bills as delayed as possible. Where the poor dad taught the author to write great resumes, the rich dad asked them to journal financial plans, so they can create jobs rather than looking for one.
The author states that self-confidence is far more important than university grades. Rich people combine their financial knowledge and IQ to take advantage of the opportunities. He recommends the readers to stay financially healthy by spending their time and raising funds for investment. Try finding opportunities that other people haven’t found and surround yourself with intelligent people.
Three most important lessons and quotes from Rich Dad, Poor Dad
- “In school, we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk.”
- The difference between poor people and rich people is that poor people work for money, while rich people make money work for them.
- Keep in mind that it doesn’t matter how much money your earn; what matters is how much money you have saved.
The Total Money Makeover
The Total Money Makeover is a personal finance book written by Dave Ramsey. Till August 2017, 500 copies of the book were sold. The book has been featured on the Wall Street Journal Bestsellers list for over 500 weeks.
The book is filled with expert advice related to debt payoff in small increments. It is divided into seven steps and features a seven-step guide to becoming financially secure. Dave Ramsey states in the book that the first thing everyone has to do is save $1,000 in an emergency fund.
This New York Times bestseller debunks debt and money myths. People look at debt as a tool that will bring them prosperity. However, that’s not the case at all. The real building block of your asset is your income and not your debt.
There’s no way you can become a millionaire overnight by taking a loan. Ramsey’s common sense principle helps you control your money by suggesting you only buy what you can afford. The author believes that your financial situation is the result of your behavior and how your relationship is with money.
Ensure you follow the seven steps in order and not move to another until the current step is complete. The book features a no-nonsense way of managing finance and avoiding debt. Work on growing your funds until it covers three months of living expenses. Dave shares with readers that they don’t need a huge amount of money to invest towards big money.
One of the most important lessons you will learn from the book is that in order to change your financial situation, you first need to recognize that there’s something wrong with it, and you are in denial about them. The people around you participate in your denial and fantasy world, which makes you believe that there’s nothing wrong with whatever you are doing.
Three most important lessons and quotes from The Total Money Makeover
- “Winning at money is 80 percent behavior and 20 percent head knowledge. What to do isn’t the problem; doing it is. Most of us know what to do, but we just don’t do it. If I can control the guy in the mirror, I can be skinny and rich.”
- People look at the budget as something that tells their money where to go instead of wondering where the money was spent
- “I tell everyone never to take more than a fifteen-year fixed-rate loan and never have a payment of over 25 percent of your take-home pay. That is the most you should ever borrow.”
Broke Millenial: Stop Scraping By and Get Your Financial Life Together
In Broke Millenial: Stop Scraping by and Get Your Financial Life Together, financial expert Erin Lowry takes you on a journey from knowing nothing about finances to improving your financial health and funding your dream life. The book is specially written for people in their 20s and 30s who have difficulty managing their money and making ends meet.
The book paints a scenario where you are dining out with a large group of people, and the time to pay the bill approaches. Say, you badly want to split the bill but are anxious to do it because you don’t want to sound cheap. In this situation, Erin suggests people offer to split up the bill for everyone.
Money is a scary topic for most of us. Being worried about not saving enough or not living a happier retirement is totally normal. In the book, Erin Lowry not only makes communicating about money easier but also shares practical tips for dealing with “money” situations.
Erin Lawry states that the journey to financial success begins by saving $10 from your paycheck and recommends using online banking for better interest rates.
The most important lesson from Broke Millenial is to stop the following advice and focus on getting a clear picture of why and how you struggle with money. The author suggests you dig deep into your memories and find why you struggle with finances and how talking about money makes you feel. You might find remembering financial situations hard, but that’s where you’ll know why sticking to a budget and managing cash difficult for you.
The author says that drawing a budget and dividing your expenses into categories might seem difficult to you. However, while breaking down your expenses, keep in mind that your money goes to food, financial goals, and fixed expenses like rent.
For young adults who want to start saving their money and work towards wealth development, this book should be on the top of your list.
The three most important lessons and quotes from Broke Millenial
- “Trying to change how you spend and save money without understanding why it’s difficult in the first place probably means you’ll slip up.”
- To get debt-free faster, you should pay your debt biweekly. It doesn’t make any difference if you owe $400 a month and pay it all at once rather than paying $200 in the second and fourth week of the month.
- Stopping yourself from spending doesn’t mean you shut cut your credit cards. They are valuable tools to keep track of your purchases.
I Will Teach You to Be Rich
I Will Teach You to Be Rich, written by Ramit Sethi, has all the potential to be your favorite financial book. From improving your credit rating to gaining financial success and learning what to invest in and how, the book teaches countless financial lessons.
This personal finance book is divided into 9 chapters. Ramit Sethi starts off the book by stating that you don’t have to be a financial expert in developing wealth. The author suggests that to get rich, you need to control your money and not the other way round. This book is one of the easiest financial planning books you will ever read.
Debt is only considered good if it increases in value over the loan duration. But, you’re mistaken if you think you can become a millionaire by taking huge student loans. Generally, credit cards are considered one of the worst financial decisions. The author believes that they are extremely beneficial when used correctly. Credit cards offer reward points that you can use for several purposes and end up saving money.
Before getting started, the first thing you need to take responsibility for your money. No matter how valid your excuse behind being bad with money is, it will still be considered an excuse. You will not be able to financially secure your future unless you start taking responsibility for your money.
The author also shares tips for choosing the best bank account, minimizing bank fees, and maximizing the perks.
One great tip Ramit Sethi has shared regarding investment is that the earlier you invest, the faster you can get rich. They recommend setting up two investment accounts – a 401(k) and a Roth IRA. The author also shares the differences between the two and tips and actionable advice on optimizing the accounts.
I Will Teach You to Be Rich is a 6-month action plan you need to follow to walk towards achieving your financial goals. This light, humorous, yet extremely practical guide is filled with calculation, investment advice, real-life examples, and illustrations.
The three most important lessons and quotes from the personal finance book, I Will Teach You to Be Rich
- “The single most important factor to getting rich is getting started, not being the smartest person in the room.”
- Budgeting doesn’t mean that you shouldn’t spend money on the things you love. The only thing you need to make sure of is to cut costs on the things you don’t love.
- There’s a limit to how much you can cut down on your expenses. But, keep in mind that there’s no limit to how much you can earn.
If you have a hard time drawing a budget or need financial advice, feel free to turn towards the aforementioned books. These best-selling books are filled with investing advice and can help you achieve your financial goals.
If you are looking for more recommendations, you can check out:
- New York Times Best-Seller, The Automatic Millionaire by David Bach (Automatic Millionaire is a step-by-step guide on automating your personal finances)
- New York Times Best Seller, Think and Grow Rich by author, Napoleon Hill
- The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley
- The Finish Rich Workbook: Creating Personalized Plan for a Richer Future
- You Are a Badass at Making Money: Master the Mindset of Wealth by Jen Sincero