Happy Read a Book Day! Today's the day to celebrate the power of the book, which is a source of joy, inspiration, and education around the world. Books are also a great way to improve your financial wellbeing by increasing financial literacy and empowering the reader with the tools needed to make better decisions about their money.
Whilst not often the first topic that comes to mind when choosing a new book, there are some impressive contenders in the personal finance space which are there to support you. However, with so many books available at our fingertips, it can be difficult to choose the right one - that's why we've put together a short list of our favourites.
1. The Psychology of Money, Morgan Housel
What we liked: In ‘The Psychology of Money’, Morgan Housel flips the focus away from the nuts and bolts of finances, taking a more holistic approach. He explores our relationship with wealth, uncovering that the way we manage our money is impacted more by emotional factors such as envy, fear and greed.
Key takeaway: We find a lot of the literature in this space focuses on a 'big bang' in wealth creation, such as making a big investment in the stock market. In reality, it’s worth remembering that these kinds of investments are risky, and not appropriate for everyone's situation. In ‘The Psychology of Money’, Housel understands that wealth can be built little by little, requiring patience and a gradual lifestyle change to build the habit of putting money away.
2. Thinking, Fast and Slow, Daniel Kahneman
What we liked: Like ‘The Psychology of Money’, this book focuses on the wider picture of how we spend our money. Daniel Kahneman's Nobel Prize winning book ‘Think, Fast and Slow’ is not necessarily one that falls into the category of personal finance, but has huge implications on what we buy, breaking down the psychology behind our behaviour.
Key takeaway: Kahneman breaks down our thinking into two key types: fast, intuitive thinking, and slow, rational thinking. By discouraging impulsive thinking, we allow the latter type to kick in, acting in our longer-term interests.
3. Girls Just Wanna Have Funds, Camilla Falkenberg
(see also - Girls Just Wanna Have Impact Funds)
What we liked: In this book, Camilla Falkenberg and Anna-Sophie Hartvigsen break down the 'investment gap' between men and women. It's insightful and inspiring, and although won't provide the solution to systemic factors in financial inequality, it can encourage women to do what they can to break down financial barriers where possible.
Key takeaway: Falkenberg and Hartvigsen encourage their readers to overcome the fear of investing by starting small.
4. Atomic Habits, James Clear
What we liked: As we know from previous books in this list, saving is about consistency and building habits. Atomic Habits breaks down how we create our habits, using science and psychology to give clear recommendations.
Key takeaway: Once again, we see the power of the small when it comes to habits, with little-and-often routines paying big later down the line. Clear also highlighted the necessity of making habits attractive, if you want them to stick, it's best if you associate them with something positive, or something that's appealing to do.
5. What They Don't Teach You About Money: Seven Habits to Unlock Financial Independence, Claer Barrett
What we liked: Barrett's book is a comprehensive guide to making your money go further, from saving tips to investing and embracing financial independence. It offers advice on how to break free from common beliefs around money which may damage our financial journey.
Key Takeaway: Barrett breaks down common beliefs about managing finances, for example the belief that buying a house is always the right decision.
