12 Best Financial Literacy Books (Ranked and Summarized)

Ready to get smart with your money? We’ve got you covered! After digging through heaps of recommendations, we’ve handpicked the top 12 financial literacy books.

These aren’t just any books; they’re the most mentioned books on financial literacy out there. So you know they’re good because they’re the ones most experts recommend.

Money can be confusing, but it doesn’t have to be. Whether you’re already good at managing your money or you find it hard, there’s a book here that can help. These books will teach you how to budget, save, and invest the right way. Best of all, they are all easy to understand and full of actionable tips.

Ready to start? Let’s jump in and turn those money challenges into peace of mind!

1. The Psychology of Money by Morgan Housel (6 mentions)

“There is no reason to risk what you have and need for what you don’t have and don’t need.“
—Morgan Housel

What is The Psychology of Money about?

"The Psychology of Money" by Morgan Housel is about how our money and financial decisions are often determined by psychological factors such as ego, emotions, and biases. He argues that making good financial decisions and building wealth is less about gaining financial expertise, and more about cultivating qualities like patience, humility, and long-term thinking.

What are the key takeaways?

1. ⏰ 1. Understand True Wealth: Happiness increases from having control over one's time, not showing off material things
2. 💰 2. Compound Interest is Unbelievable: Warren Buffett's "real secret" is not investing genius, but consistency over a long time
3. 🆘 3. Make Room for the Unexpected: Secure your financial safety with a margin of safety for errors and tough times

Why should you read it?

After reading "The Psychology of Money" by Morgan Housel, I've gained incredible insights into how our emotions and biases significantly shape our financial decisions, often more than we realize. It's not just about numbers and strategies; it's about understanding ourselves. Housel uses engaging stories and examples that made me rethink my relationship with money.

I recommend this book because it's not just about getting rich; it's about cultivating a healthier, more self-aware approach to managing your finances and life. It's a must-read for anyone looking to navigate the complex world of money with a clearer mind.

Is it worth reading? Reviews Summary

The Psychology of Money is rated 4.7 on Amazon and 4.4 on Goodreads.

Positive reviews say: + Deep insights + Easy to read + Well-researched

Criticism: - Somewhat repetitive themes - Not a step-by-step guide

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2. The Total Money Makeover by Dave Ramsey (6 mentions)

“If you will live like no one else, later you can live like no one else.“
—Dave Ramsey

What is The Total Money Makeover about?

"The Total Money Makeover" by Dave Ramsey is a step-by-step guide aimed at helping individuals overhaul their financial situation through debt elimination, savings, and investment. Ramsey introduces his seven "Baby Steps" to achieve financial health, emphasizing aggressive debt repayment, building an emergency fund, and investing for the future.

What are the key takeaways?

1. 💰 1. Build a Mini Emergency Fund First: Start your financial journey by saving $1,000, creating an initial safety net
2. ❄️ 2. Tackle Debt with the Snowball Method: Begin paying off your debts in order from smallest to largest, to build momentum and motivation
3. 🏦 4. Set Aside 15% For Retirement: Dave Ramsey's personal strategy is to invest 15% of income, ensuring a comfortable retirement

Why should you read it?

After reading Dave Ramsey's book, I was inspired to take control of my finances like never before. Ramsey's straightforward, no-excuses approach to managing money, coupled with his practical Baby Steps, can turn what may feel like overwhelming battle against debt into a clear, achievable path to financial freedom. This book helped me to not only reconsider my spending habits but also to make real, impactful changes in my financial life.

If you're feeling stuck in a cycle of debt and financial stress, I highly recommend giving this book a read. There’s nothing complicated about Dave Ramsey's advice, folks! He just provides us with a common sense financial plan that works—if we’re willing to work the plan! 💪

Is it worth reading? Reviews Summary

The Total Money Makeover is rated 4.7 on Amazon and 4.2 on Goodreads.

Positive reviews say: + Practical steps + Motivational + Step-by-step plan

Criticism: - One-size-fits-all - Aggressive debt approach - Religious overtones

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3. Rich Dad Poor Dad by Robert Kiyosaki (6 mentions)

“The poor and the middle class work for money. The rich have money work for them.“
—Robert Kiyosaki

What is Rich Dad Poor Dad about?

"Rich Dad Poor Dad" by Robert Kiyosaki is about learning how to make money by investing and starting businesses, instead of just working for a paycheck. It compares advice from his real dad, who had a regular job and struggled with money, with advice from his friend's dad, who was rich because he understood how to make money work for him.

What are the key takeaways?

1. 🏦 1. Understand Assets vs Liabilities: 'The Rich' buy assets that generate income, while 'The Poor' buy liabilities that cost them money (like a house and cars)
2. 🧠 2. Master Your Psychology: We all have inner obstacles to wealth like fear, arrogance and laziness
3. ⚖️ 3. Maximize Tax Advantages: Having a corporation can offer you many benefits including tax savings

Why should you read it?

After reading "Rich Dad Poor Dad," I realized how important it is to think differently about money. The book shows you that earning money isn't just about a 9-to-5 job; it's also about finding smart ways to make your money grow. Kiyosaki's stories about his two dads really help to illustrate financial ideas through a visual story.

Now, I know some people think the author is more of a salesman or even call him a fraud because of how he presents his ideas. But on the flip side, a lot of readers feel really fired up after reading the book. It's easy to understand and makes you see money in a whole new way, pushing you to take action towards financial freedom. 💸

Is it worth reading? Reviews Summary

Rich Dad Poor Dad is rated 4.7 on Amazon and 4.1 on Goodreads.

Positive reviews say: + Thought-provoking + Inspires entrepreneurship + Simple to understand

Criticism: - Oversimplified concepts - Undermines education and careers

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4. The Intelligent Investor by Benjamin Graham (6 mentions)

“The intelligent investor is a realist who sells to optimists and buys from pessimists.” —Benjamin Graham

What is the book about?

The Intelligent Investor is a classic book on “value investing,” which focuses on identifying undervalued stocks. Benjamin Graham emphasizes a disciplined, long-term investing approach that goes beyond just looking at the stock price, to analyzing the underlying company’s fundamentals. Warren Buffett says it’s “by far the best book on investing.”

Why should you read it?

If you’ve ever 💭 daydreamed about becoming the next Warren Buffett, strutting around with groups of admiring fans soaking up your nuggets of investing wisdom, then this book should be next on your 📚 reading list! While “The Intelligent Investor” may be a classic today, the most important sections focus on timeless principles and remain as true as ever, like a perfectly aged fine wine. 🍷

Top lessons include:

1. 🧐 Embrace Value Investing: Focus on stocks that are undervalued but have solid fundamentals. Look for consistent growth, strong management, steady dividends, and reasonable pricing.
2. 🔒 Prioritize Margin of Safety: Buy stocks at prices well below their real value. This approach reduces risk and protects against market volatility and errors in judgment.
3. 🎢 Understand Mr. Market’s Mood Swings: Recognize the market’s irrational behavior through the Mr. Market analogy. Be aware of its overreactions, both optimistic and pessimistic, and don’t let these swings dictate your investment decisions.

Is it worth reading? Reviews summary:

5. The Millionaire Next Door by T. Stanley and W. Danko (5 mentions)

“Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.“
—Thomas J. Stanley William D. Danko

What is The Millionaire Next Door about?

"The Millionaire Next Door" by Thomas J. Stanley and William D. Danko reveals the real lifestyles and habits of those who have accumulated wealth. Through extensive research and surveys, the book demonstrates that most genuine millionaires live below their means, are frugal, and invest wisely. This goes against the common stereotype of most millionaires being flashy consumers.

What are the key takeaways?

1. 🐷 1. Embrace Frugality: Financial planning and saving money is essential for creating your foundation for investment and future wealth
2. 🏎️ 2. Avoid Status Traps: One of the biggest obstacles to wealth is the temptation to live a high-status lifestyle
3. 🌱 3. Acquire Assets: Millionaires grow wealth effectively by looking beyond their income and accumulating financial assets

Why should you read it?

I recently finished reading "The Millionaire Next Door," and it completely transformed my understanding of wealth. This book peels back the curtain on the real habits and lifestyles of America's millionaires, and surprisingly, they're not what most of us would expect. It's fascinating to learn that true financial success often comes down to living frugally, saving diligently, and investing wisely—practices anyone can adopt.

If you're curious about what it really takes to build wealth over a lifetime, without the glitz and glamour often portrayed in the media, I highly recommend this read. It's eye-opening and challenges many myths about millionaires, providing practical insights into achieving financial independence. Perhaps the secret to getting wealthy might just be embracing our inner Average Joe! 🛻

Is it worth reading? Reviews Summary

The Millionaire Next Door is rated 4.7 on Amazon and 4.1 on Goodreads.

Positive reviews say: + Eye-opening and unexpected truths + Data-driven research + Motivational for financial discipline

Criticism: - Old examples - Repetitive content - Overemphasis on frugality

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6. The Richest Man in Babylon by George S. Clason (5 mentions)

“A part of all I earn is mine to keep.“
—George S. Clason

What is The Richest Man in Babylon about?

"The Richest Man in Babylon" by George S. Clason offers timeless financial wisdom through parables from ancient Babylon, focusing on principles such as saving 10% of your income, living within your means, and avoiding get-rich-quick schemes. The book champions the concept of "paying yourself first" by setting aside at least 10% of your income before paying any expenses.

What are the key takeaways?

1. 🏦 1. Pay Yourself First: Start by saving 10% of your earnings for your future self, before paying anyone else
2. ✂️ 2. Lower Your Expenses: Living within our means is about drawing the line between our needs and desires
3. 📈 3. Let Money Work For You: To become wealthy, our savings must be transformed into passive income sources through investing

Why should you read it?

After reading "The Richest Man in Babylon," the principle of "paying yourself first" truly resonated with me. This idea of automatically saving a portion of your income before anything else has shifted the way I manage my finances. It’s a small change that can make a huge difference in your financial journey. The stories, set in ancient times, brilliantly illustrate how such a simple habit can lead to lasting wealth and financial independence.

The book’s advice is straightforward but powerful, teaching not just to save, but to actively invest in our future selves. It's inspiring to see how applicable these ancient principles are today, and I can't recommend this book enough to anyone looking to improve their financial health. It's kind of like hearing life lessons from a wise and wealthy grandfather, but with more camels. 🐪

Is it worth reading? Reviews Summary

The Richest Man in Babylon is rated 4.7 on Amazon and 4.3 on Goodreads.

Positive reviews say: + Timeless principles + Simple rules + Engaging story format

Criticism: - Too simplistic for some readers - Repetitive writing

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7. Your Money or Your Life by J. Dominguez and V. Robin (5 mentions)

“Money is something we choose to trade our life energy for. (...) Life energy is all we have. It is precious because it is limited and irretrievable and because our choices about how we use it express the meaning and purpose of our time on Earth.“
—Joe Dominguez Vicki Robin

What is Your Money or Your Life about?

"Your Money or Your Life" by Vicki Robin and Joe Dominguez is about transforming your relationship with money to achieve financial independence and a meaningful life. The book introduces a nine-step program that encourages readers to examine their money habits, reduce waste, and align their spending with their values and life goals. It emphasizes mindfulness in finance, the importance of saving, and finding fulfillment beyond consumerism.

What are the key takeaways?

1. 🗝️ 1. Value Savings as the Path to Freedom: Recognize how escaping the cycle of endless debt opens the door to financial freedom
2. ⏳ 2. Treat Money as Life Energy: Understand that money represents your precious, irreplaceable life energy - and deserves careful management
3. 🙌 3. Let Go of Financial Regrets: Reflect on past financial decisions with "no shame, no blame" - embracing a mindset of learning and growth

Why should you read it?

Reading "Your Money or Your Life" completely shifted my perspective on what it means to be wealthy and happy. This book isn't just about saving money; it's about finding a deeper sense of purpose and fulfillment through mindful spending and living. Vicki Robin and Joe Dominguez offer practical, thoughtful advice that challenged me to evaluate not just my finances, but how I spend my life energy. It's empowering to see money as a tool for creating a life that truly reflects my values.

I recommend this book to anyone who feels caught in the cycle of earning and spending without feeling fulfilled. These authors are like financial therapists, helping us let go of our old guilt around money, while crafting a plan to change our lives. 👩‍⚕️👨‍⚕️

Is it worth reading? Reviews Summary

Your Money or Your Life is rated 4.5 on Amazon and 4.0 on Goodreads.

Positive reviews say: + Transformative approach to money + Practical tools for financial planning

Criticism: - Repetitive content - Requires major lifestyle changes

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8. The Simple Path to Wealth by JL Collins (4 mentions)

“Stop thinking about what your money can buy. Start thinking about what your money can earn.“
—JL Collins

What is The Simple Path to Wealth about?

The Simple Path to Wealth" by JL Collins offers straightforward advice on achieving financial independence through saving, investing, and avoiding debt. It simplifies complex financial concepts, advocating for investing in low-cost index funds and the importance of financial freedom.

What are the key takeaways?

1. 🤸‍♂️ 1. Get F-You Money: Achieve freedom by saving enough to cover several months of expenses
2. 💳 2. Pay Off Debt Quickly: Carrying a lot of debt is the biggest obstacle to wealth
3. 📊 3. Invest in Stock Index Funds: The safer way to grow wealth is by investing in ALL the stocks in the market

Why should you read it?

Having read "The Simple Path to Wealth" by JL Collins, I've been enlightened on how straightforward building wealth can be. Collins demystifies investing and makes financial independence seem achievable, even for those who feel lost in the world of finance. His emphasis on low-cost index funds and living below your means resonated with me deeply.

I recommend this book because it's more than just financial advice; it's a roadmap to a stress-free financial life. Whether you're just starting or looking to refine your financial strategy, this book is a beacon of clarity. Plus, this is Reddit’s #1 recommended personal finance book today. You can’t argue with the internet, right? 👽

Is it worth reading? Reviews Summary

The Simple Path to Wealth is rated 4.7 on Amazon and 4.5 on Goodreads.

Positive reviews say: + Clear and concise + Practical financial strategies

Criticism: - U.S.-centric directions - Too simplistic for some

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9. Broke Millennial by Erin Lowry (4 mentions)

“Trying to change how you spend or save money without understanding why it’s difficult in the first place probably means you’ll slip up.” —Erin Lowry

What is the book about?

Broke Millennial is a relatable and engaging guide for young adults to navigate their finances. Erin Lowry addresses the challenges millennials face, from managing student loans to understanding complex financial terminology. The book emphasizes practical, easy-to-understand advice for taking control of personal finances early in life.

What do the reviews say?

Why should you read it?

…For a real talk about money that doesn’t put you to sleep! 😂 This book is like chatting with a savvy friend who knows all the ins and outs of dollars and cents. Lowry dives into the nitty-gritty of millennial money issues without the financial gobbledygook. Perfect if you’re tired of hearing the same old money advice.

Top lessons include:

1. 💳 Understanding Debt: Learn how to tackle different types of debt, especially student loans, and the importance of a good credit score.
2. 📊 Budgeting Made Easy: Lowry offers straightforward strategies for creating and sticking to a budget that doesn’t feel restrictive.
3. 🎯 Setting Financial Goals: The book encourages readers to define their own financial success and provides steps to achieve these goals, helping to transform their relationship with money.

10. I Will Teach You to Be Rich by Ramit Sethi (4 mentions)

“The single most important thing you can do to be rich is to start early.” —Ramit Sethi

What is the book about?

I Will Teach You to Be Rich is an actionable guide to organize your finances and live your personal ‘Rich Life.’ Ramit Sethi focuses on conscious spending, so we can buy what we want guilt-free, while also saving money. He gives specific recommendations for credit cards, banks, and investing.

What do the reviews say?

Why should you read it?

What’s not to like about a finance book that kicks off with the tagline: “Buy as many ☕ lattes as you want”? Too many personal finance books are dry, boring and repetitive, which turns people off. This author offers the exact opposite—with plenty of colourful 😂 jokes and the real, honest truth about money. (He even spills the beans on the conversation he had with his wife before they signed a 💍 prenup!)

Top lessons include:

1. 💸 Financial Automation. Nobody enjoys paying bills, so why not make it automatic? So that every month your bills are paid and your investment accounts funded without you needing to do anything, and you don’t need to think about it anymore!
2. 🛍️ Conscious Spending. Rather than focusing on limiting spending, this is about making a plan for spending on what really makes you happy, so you can live our personal ‘Rich Life’ guilt-free.
3. ⏰ Begin Today. It’s better to start now than waiting to get everything perfect, when it comes to saving money and investing. What really matters is being in the game sooner, because of the power of compound interest.

11. The Little Book of Common Sense Investing by John Bogle (3 mentions)

“Don’t look for the needle in the haystack. Just buy the haystack!” —John Bogle

What is the book about?

The Little Book of Common Sense Investing is about how to better invest your money for retirement. The main idea is that you should buy and hold low-cost index funds, rather than buying individual stocks or actively managed mutual funds. John Bogle founded Vanguard, a pioneer of index fund investing.

What do the reviews say?

Why should you read it?

John Bogle is like the 👴🏻 cool grandpa of the investing world, who’s inspired tons of writers, including the author of “The Simple Path to Wealth.” His big breakthrough? A fact that now seems obvious: that the financial industry is more interested in lining their own pockets than ours. I mean, who would’ve guessed, right? 🤷‍♀️ But hey, thanks to him and others, we now have some smart new strategies for how to invest our money.

Top lessons include:

1. 🌐 Low-Cost Index Funds: Simplify your investing through buying index funds, which are like a collection of all the stocks in the market. This approach minimizes fees, promotes diversification, and provides greater average returns than actively managed funds.
2. 🕵️ Beware of Fees: Larger costs and fees are a major downside of buying individual stocks or actively managed mutual funds. These include management fees, buying/selling fees, and greater capital gains taxes.
3. 🙉 Ignore Market Noise: Instead of buying and selling based on current news or trends, simply buy and hold. By investing for the long-term, and maintaining patience and discipline, you’ll benefit from greater compounding returns.

12. The Bogleheads’ Guide to Investing by Lindauer, LeBoeuf, and Larimore (3 mentions)

“Index investing is an investment strategy that Walter Mitty would love. It takes very little investment knowledge, no skill, practically no time or effort-and outperforms about 80 percent of all investors.”

What is the book about?

The Bogleheads’ Guide to Investing is a comprehensive resource for anyone looking to understand the basics of investing. Inspired by the investment philosophy of Vanguard founder John C. Bogle, the book breaks down complex investment concepts into digestible pieces. It covers everything from asset allocation to tax strategies, emphasizing long-term, low-cost investment approaches.

What do the reviews say?

Why should you read it?

For a no-nonsense guide to growing your wealth. This book is like a roadmap to investment, steering you clear of the overly complex schemes of the financial industry. It’s perfect for beginners and anyone who wants to make smart investment choices without feeling overwhelmed. The Bogleheads’ approach simplifies investing, making it accessible and manageable for everyone, not just the financial wizards.

Top lessons include:

1. 📈 Long-Term Investing: Learn the importance of a long-term perspective in building wealth.
2. 💰 Low-Cost Index Funds: Discover why low-cost index funds are often the best investment choice.
3. 🧮 Asset Allocation: Understand how to diversify your investments to balance risk and return.

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