Contents:
Personal finance books can empower you to budget, save for retirement, get out of debt and tackle many other money-related decisions with confidence. But the possibility of falling down an Amazon rabbit hole or spending all day at the bookstore debating which title to pick is enough to deter some folks. What are the go-to reference books for learning about unfamiliar topics?
It covers a wide breadth of categories, including budgeting , saving money , investing and insurance. Good for: Personal finance novices who want to gain a basic understanding. Think of it as your own Personal Finance course. Good for: People who prefer a simple approach. The book provides actionable ways to take control of your money in an easy-to-digest format.
The message is that measuring your money in hours of your life can make spending and managing it more meaningful. Good for: Anyone who wants to retire early and those who could use a little extra motivation to get their priorities in perspective.
In this case, your bad debt represents 50 percent of your annual income. People wanting basic advice about stocks, bonds, mutual funds, retirement planning, and tax strategies are Undetected location. See more. The easiest option is to open up a savings account and earn interest on your savings. I wanted something more advanced but good read for beginners in my opinion.
This work gives realistic reasons behind the money mistakes people make and the bad habits they develop. Richards encourages readers to step away from their preconceived notions and keep their emotions in check when making financial decisions. Bogle makes a solid argument in favor of his index investing strategy that anyone can learn to apply.
He also makes it clear that paying too much for investments can keep you from reaching your goals. This might sound obvious but so many people ignore this simple golden rule of personal finance.
If your outgoings are consistently more than what you have coming in each week, month and year, then you are inevitably going to end up in a downward spiral of debt and you will never be in control of your personal finance. On the other hand, just because you have the money it doesn't mean you have to spend it and break even each month. If you find that your income and outgoings are pretty much equal how can you expect to be prepared for emergencies or major life changes? When you consistently spend less than you earn you will be better able to prepare for the future, and you will be in more control of your life in the long term, which becomes more and more important as you get older and your responsibilities and need for stability increases.
It will give you more choices and more freedom. When you make your financial decisions by looking into the future and planning ahead you will truly be able to relax and live your life knowing that you have everything under control, and there are less likely to be any unplanned financial bumps in the road. I'm not just talking about your retirement, but also things like purchasing on plans that allow you to have the item without paying anything for 6 months.
Before signing any contracts you need to think ahead and realistically know for sure whether you are going to be able to keep up with the payments when they are due, and not just think you'll figure that out nearer the time. Remember, very few things in life are for free these days, and you need to know whether you can truly afford the things you purchase, whether you are paying for them now or later.
Planning for the future also means ensuring that you always have access to emergency funds because you never know when you might need the extra money to pay for an unexpected bill, or if you will need to put money upfront for an important change or opportunity in your life. The most sensible thing you can do when you are trying to make the most of your money is to think of ways to make more money with what you already have, so that your financial situation is constantly improving as time goes by.
Nobody wants to live life on a month-to-month basis with no sense of achievement or growth. If you put some of your money aside you will soon have something to show for your hard work. The easiest option is to open up a savings account and earn interest on your savings.
But there are other ways that you can make passive income by investing your money into business ideas that enable you to make money while you sleep. Alternatively you might want to think about investing you money into yourself by enrolling on a course to improve your skills and knowledge so that can climb the ladder of success and have the opportunity of making more money in the future than you are right now. Don't be intimidated by the idea of drawing up a budget.
You should be more intimidated by the fact that you don't have a clear overview of your financial status. A basic budget can be as simple as getting out a pen and paper and writing down all of your income and your outgoings so that you can compare them and start making plans to improve your financial situation for the present, but also for the future. It can be really enlightening to actually see where your money is disappearing to each month, and a budget will help to reveal this.
We spend so much money on things that we don't necessarily need. Sometimes we are even paying for things we don't use but we don't realise it! Get it all down on paper, or onto your computer and have a good look at the big picture of your personal finances. The best way to do this is to create 3 lists and write down the figures for a whole month, going back several months, so that you can get a realistic overview of what your finances looks like. How much money do you make in a month?
If you have several streams of income add all of these into your first list.
You may want to include income from employment, income from self-employment, money made from selling personal items on Ebay, passive income etc. It all counts and you will need this information later when you come to assessing and altering your finances for improvement. Next write down all of your regular expenses.
This is money that regularly comes out of your income on a recurring monthly basis. It is payments that are fixed and non-negotiable, for example your rent or mortgage, and any utilities or council tax.
Now write down all of the varying outgoings you have. These are things that perhaps you have some control over like how much you spend on food or subscriptions that you might be able to cancel. Write it all down so that you can have a clear idea of what you are currently spending. Don't forget to include all the seemingly insignificant things, like money spent on buses, trips in and out of the newsagents, subscriptions, cash taken out of the wall etc.
A good way to get a more coherent picture of all of this is to organise all of your outgoings into categories, like work-related expenses, hobbies, and your social life. Finally you will want to calculate your total average outgoings per month for the past 6 to 12 months to see if it is more or less than your total monthly income.
And this will lead to the big creative task of seeing where there might be opportunities reduce your outgoings as much as possible, or increase any income until your outgoings are less than your income, and you have money to set aside each month. Once you have minimised your outgoings and maximised your income, you can decide what to do with any anything left over. If you have any debts you should set up a plan as part of your budget to pay them off in a set amount of time.
By doing this you won't have to worry or think about the money you owe because you will know that your debt is being dealt with, and you will have a clear date when you know you will be debt free. This is a great goal to have, and one that you won't even have to work at as long as you are sensible about your repayments and set them all up as direct debits. In order to prepare for your future and get more out of your income, you can set yourself a savings goal as part of your budget, and a plan as to how you are going to achieve your goals.
Some people like to have a single savings "pot" so to speak that they can dip into when they need to.