I finished college with almost zero personal finance skills.
In my early 20s, I racked up a fair amount of credit card debt on multiple cards and took out a car loan that I couldn’t afford. I barely understood the 401k offered at my job and had no knowledge of any other retirement account or investing options. “Emergency fund” definitely wasn’t in my vocabulary.
Now, in my early 30s, I’m a completely different person than I was a few years ago (though I’ll always be a financial work in progress). All of those credit cards are now completely paid off. I traded the expensive car in for a used model that I paid for in full. I take advantage of the 401k employer match, as well as the tax-advantaged dependent care and health savings accounts. I also started a separate savings account for emergencies at a high-interest online bank.
What forced me to change was having my daughter in my late 20s and realizing I wasn’t financially prepared for parenthood. I knew my finances needed to be more sustainable in order to raise a family, send our kids to college, and eventually retire.
I fixed my money situation by teaching myself personal finance and money management skills through books I came across or that were recommended by friends. These books taught me that my salary number is really just one piece of the wealth-building puzzle, and what’s also important is how I learn to make my money grow, set my spending priorities, and use what I have wisely.
In order to build a strong financial life, I need to focus not just on earning raises, but also adding in smart investments and passive income streams, boosting my credit score, and negotiating and shopping around for high-dollar goods and services. It makes more of an impact to figure out how cut my expenses by 10% than to get a 5% raise. It’s not always worth chasing more and more when you can be smart about what you have.
These are the books I keep on my shelf and constantly thumb through as I work towards the concrete steps of building and strengthening my financial life.
Elizabeth Warren has excellent financial knowledge that anyone can learn from — regardless of political viewpoint. This practical book focuses on getting your money in balance between must-haves (50%), wants (30%), and savings (20%). Not letting your necessary financial commitments creep above half your income is a good ballpark for financial health.
This book taught me what has turned into my guiding principle: to focus on saving the dollars, not the pennies. It makes a much bigger impact on your “must-haves” category to lower your insurance costs or phone bill instead of clipping coupons to save 50 cents.
No list about personal finance is complete without Dave Ramsey. Ramsey is best known for helping people eliminate debt through the debt snowball method. This book is the handbook for the Financial Peace University course and will help you put together a long-term money plan with concrete and tangible steps.
This book teaches you how to automate your finances to build wealth. Making everything automatic means saving and investing isn’t left to your own willpower. If you start automating your investments early, you benefit for years of compounding interest.
This book is great for learning the basic principles on money management and getting an in-depth lesson on them. It is full of information on managing loans and credit cards, choosing a bank, retirement accounts, mortgages, insurance, and taxes.
I am not necessarily interested in retiring early, but this book has amazing advice on how to become financially independent, and importantly, how to avoid the “lifestyle creep” that never allows us to get ahead even as we earn more and more money. This book also has an incredibly detailed chapter on investments that I’ve already referred back to multiple times.
This is another personal account of achieving early retirement. The author and her husband retired to a homestead in Vermont in their early 30s through extremely frugal living. While that way of living isn’t for everyone, there is some great advice about prioritizing your spending and freeing yourself from a consumer mentality.
This is a quick and easy read of 99 tips on managing your money wisely — like investing 50% of every salary increase, saving 90% of every bonus, negotiating prices, and buying used or older models of big-ticket items.
Pogue's Basics: Money: Essential Tips and Shortcuts (That No One Bothers to Tell You) About Beating the System
This is a great book of small money hacks such as where to buy discounted gift cards, how to track price drops, and how to take advantage of all of the different Amazon Prime benefits. This book does focus on chasing pennies instead of dollars, but after you have all of your big costs organized and under control, these tips can help you save a little extra.
Additionally, I’ve discovered a few podcasts that also provide a lot of direct and explicit personal finance advice:
I LOVE this podcast because the episodes are short, but very concrete and actionable. The host provides very tangible advice and lessons on income taxes, IRAs, budgeting tools, HSAs, and much more.
The Five Tip Friday episodes are great. They are five minutes long and provide quick money management tips on topics like saving for vacations, setting up spending rules, and reducing monthly expenses.
What are your favorite resources for personal finance?