Investing in your financial knowledge is one of the best ways to improve your finances and live a more fulfilled life. Like Warren Buffet said, “the best investment you can make, is an investment in yourself.”
This post contains 3 of the best personal finance books you should read in 2021 and have on your bookshelf.
1. The Psychology of Money
- Author: Morgan Housel
- Book Name: The Psychology of Money: Timeless lessons on wealth, greed, and happiness
One of the biggest mistakes you can make with money is thinking it all comes down to the numbers, formula, models, or spreadsheets. But how you think about money is equally as important.
Using short stories, Morgan Housel showed that winning with money has “little to do with how smart you are and a lot to do with how you behave.” You’ll learn how to build a better relationship with money and make better financial decisions.
The Psychology of Money is beautifully written, easy to read and digest, and guaranteed to change your money mindset. And it doesn’t matter whether you’re a beginner or seasoned financial expert.
If you can only choose one book to read this year, this book will make a great choice.
Favourite Quotes from Psychology of Money:
- We…are taught about money in ways that are too much like physics (with rules and laws) and not enough like psychology (with emotions and nuances).
- Few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviours of people playing different games than you are.
- The finance industry talks too much about what to do, and not enough about what happens in your head when you try to do it
- Everyone has their own unique experience with how the world works. And what you’ve experienced is more compelling than what you learn second-hand…what seems crazy to you might make sense to me.
You can also find some of Morgan Housel’s writing on the Collaborative Fund’s Blog.
2. Dear Debt: A Story About Breaking Up With Debt
- Author: Melanie Lockert
- Book Name: Dear Debt: A Story About Breaking Up With Debt
As you probably guessed from the title, the book is for anyone struggling with debt and ready to break up with it.
Melanie Lockert is a personal finance expert and the founder of award-winning Dear Debt blog. In Dear Debt, she drew on her own experience of paying off $81,000 in student loan debt.
You’ll learn how to choose the debt repayment strategy that actually works for you and lets you sleep better at night. In some instances, this doesn’t necessarily mean focusing on the debt with the smallest balance (debt snowball) or highest interest (debt avalanche).
Dear Debt also contains practical tips on replacing expensive habits with cheaper ones, increasing your income, negotiating your salary, starting a side hustle and planning for your post-debt financial life.
If you’re struggling with debt and tired of the heavy burden that comes with it, the book will provide you with some of the tools and processes you need to attain financial bliss.
Favourite Quotes from Dear Debt:
- Money is your friend – and if you work hard enough, it can be your best friend, and work hard for you in return.
- As long as you’re in debt, you’re a prisoner. Fighting to get out of debt is fighting for freedom.
- Getting out of debt is an obvious goal, but what else should you do with your money?
Related Post: 11 Smart Ways To Get Out Of Debt Fast
3. The Dumb Things Smart People Do With Their Money
- Author: Jill Schlesinger
- Full Book Name: The Dumb Things Smart People Do with Their Money: Thirteen Ways to Right Your Financial Wrongs
I stumbled on this book at the library and I’m so glad I did. It’s written by Jill Schlesinger, the host of the radio show “Jill on Money”.
The dumb things smart people do with money contains 13 chapters, each one featuring a “dumb thing” and how to deal with them.
The first dumb thing in the book is buying financial products you don’t understand. Jill did a great job of covering the subject and provided 5 questions to ask anyone trying to sell you a financial product.
It concludes with an appendix with 13 smart things you should do every month, quarterly, annually and every 3 years.
The book contains very practical advice and tips for taking control of your overall financial life beyond just the savings, debt or investing aspect.
For example, Chapter 7 is dedicated to the importance of protecting your identity. We hear about identity theft and think it can’t happen to us, but “smart people get hacked too”.
- Failing to buy the right insurance or to invest wisely are just two of the many dumb mistakes smart people make.
- In most cases, two emotions in particular hamstring us when it comes to money: fear and greed. We’re afraid of losing what we have, and we’re eager to have much more.
- An excessive emphasis on money leads not only to unhappiness, but ironically, to financial losses.
Related Post: 21 Money Mistakes to Avoid
Final Thoughts: Best Personal Finance Books 2021
Investing in yourself by reading personal finance books is one of the best and cheapest gifts you can give yourself.
These 3 books will make a great addition to your reading list for 2021 and are sure to make a great gift for your loved ones.
And the best part is you may be able to get the books from your local library – so start from there first. If you’re into audiobooks, you can get them through your Audible Subscription (if you have one) or sign up for the free 30 days trial.
Read any of the books? What do you think about them? Let me know in the comment section.