Tales from the Wallet: The Best Books and Sites for Financial Advice For Newbies

best personal finance booksWhich are the best personal finance books for newbies?  Reader E had a great question:

I absolutely love your Tales from the Wallet series, but I find a lot of the lingo is a little over my head. I do understand that most of your readers are lawyers and professionals with sizable incomes, but I was wondering if you had any book recommendations for readers like myself. I didn’t invest in a 401K through my employer because I didn’t understand it. The idea of having money deducted from my account for a stranger to manage and crossing my fingers for the best didn’t sound very appealing to me. After reading some of the comments, it looks like there’s more to it. I currently don’t have any investments and want to start to learn about vehicles to put my money in. Please share absolutely any resources for new investors! Thanks!

Everyone has to start somewhere, so I think this is a great question. We’ve talked about tax-savvy investments on here, of course (and may answer some of your 401K specific questions), but in general it can seem daunting to learn about personal finance. (Pictured: Kate Spade New York ‘Popsicle’ Coin Purse, $78 at Nordstrom — according to the reviews it’s surprisingly functional!)  I’ve read a bunch of personal finance books over the years; these are the best ones that I would recommend for newbies:

LearnVest is a great source of personal finance information, too.  They have a ton of information for free (including a daily newsletter), but they also offer bootcamp programs for women where, for $89-$399, you work with a Certified Financial Planner and choose a specific program to go through.  (The choices right now are “Budget Starter,” “5-Year Planner,” or “Portfolio Builder.”). There are a ton of personal finance blogs out there, too, of course — I’m kind of on the hunt for more new ones to follow since a lot of my old favorites changed so much after they were sold to bigger companies; right now I recommend Daily Worth and Go-Girl Finance.

Readers, which personal finance books are your favorite? What was the first book or blog you read that got you started on the path?

(L-all)

Comments

  1. Veronique :

    Not a book or blog, but check to see if your employer offers any type of financial planning. Mine offers one on one sessions with a financial counselor or finance workshops. I used my job’s counselor to balance my 401k based on my risk preferences and timeline.

  2. Equity's Darling :

    I’d love some suggestions for Canadian-based blogs too, if any of the ladies from the north follow any good ones.

    • I occasionally look at Gail Vaz-Oxlade’s blog, which is very practical and down-to-earth. I like her focus on women, too. She’s also written a couple of books, including one which I looked at in a bookstore one day and really liked (but didn’t buy because I was on my way somewhere else, and I haven’t gotten around to it yet) – “It’s Your Money: Becoming a Woman of Independent Means”.

      • I read through most of that one and liked it.

      • Equity's Darling :

        Oh, I didn’t know she had a blog! I love her show, way more than I should, and I frequently stream old episodes off slice’s website.

        • Yes, I love her show too. It’s kind of a guilty pleasure.

          And today’s discussion just incentivized me to go out and buy her book at lunch just now (though I didn’t get the one for women – I got “Money Rules”).

    • Hi, I have about 10 Canadian personal finance bloggers feeds in mobile apps “Money Blogs”
      http://bit.ly/MoneyBlogsiPhone
      http://bit.ly/MoneyBlogsAndroid
      As for books, there are plenty for them.
      Beside Dave Ramsey’s books I’d like to recommend mine, if you are in the long term relationship.
      http://bit.ly/HomeFinancesCouplesWorkbook
      #4 in Free Personal Finance books in Kindle store (as of 10/03/2013)
      #1 in Free Interpersonal relations books in Kindle store (as of 10/03/13)

  3. IDoNotLikeTheConeofShame :

    When I was first learning about finances I found the Suze Orman books helpful (I think The Road to Wealth was the one I read), and written for dummies like me :) I have re-read it a couple of times.

    I’m 45 now, and I was in Reader E’s shoes 25 years ago. I wish now that I was more aggressive in my 401K savings when I was younger. It seemed like so much money to take out of my paycheck at the time. Well, you know what, it’s really a deal – it’s pre-tax, and often your employer contributes a match = free money for you.

    If Reader E’s company has options for Retirement Lifecycle Funds (i.e., you can just put all your money in a fund that is tied to your retirement year – such as “The 2040 fund”) – that’s an easy way to start. Just start with that for the first year or two and get slowly increase the percentage of what you contribute. Over time, as you get more confident, go look up how the Lifecycle Fund invests their money (usually percentages of other mutual funds), and you can start mimicking that strategy.

    • I agree that it can be a good idea to mimic the investment strategy of a lifecycle fund in terms of percentages allocated to bonds, equities, internationally, etc. Lifecycle funds tend to have higher fees as funds-of-funds.

    • CPA to be :

      I am the sort of nerd who reads personal finance books for fun, and I *highly* recommend Suze Orman’s “Women and Money”. She doesn’t just tell you what to do (in easy to follow steps), she tells you why it is so crucially important. Even though I’ve always been the financially savy one in my group of friends, it made me evaluate both how I thought about money and how I thought about myself.

    • Not a lawyer :

      +1 to Suze Orman books. When I was 22, new career, never had to balance a checkbook- let alone plan investments- I found that ‘The Money Book for the Young, Fabulous, and Broke’ was the perfect elementary- level starting point for me. Husband and I still refer to it when we have questions!

  4. I’m not sure if this has been updated recently, but I relied on Ernst & Young’s Personal Financial Planning Guide when I first started working (2006).

  5. The best website for reasonable, low-cost, do-it-yourself advice for investing is the Bogleheads forum.
    http://www.bogleheads.org/forum/index.php

    They advocate low-expense, simple investment portfolios in the John (Jack) Bogle (founder of the Vanguard Group) style. Many of the portfolios they suggest include 3 or 4 index funds (mix of stocks, bonds, and international) and look to minimize fees and expenses so more of your money works for you over the long term. After you decide on your portfolio it doesn’t take that much effort to rebalance and evaluate your asset allocation/risk tolerance annually.

    Lots of really smart, helpful people there.

    • Sydney Bristow :

      I’m reading Bogle’s books right now too but I haven’t gotten very far yet. Everything became available at the library all at once!

  6. Sydney Bristow :

    This isn’t specifically about investing, but I’m in the middle of reading Your Money or Your Life and it is excellent. I’ll also second Kat’s suggestion of I Will Teach You To Be Rich. He really breaks down the basics and terminology. Suze Orman’s books and show (which is a free podcast on iTunes) are also helpful.

    I listen to a few podcasts that I find helpful. They are Clark Howard, The Dave Ramsey Show, Marketplace Money, and YNAB (which is geared towards people who use the software). Listening to a variety of these allows me to become familiar with general concepts and some of the advice is directly applicable to me.

    For blogs I’ve been reading Mr Money Mustache regularly and occasionally read others I’ve found through that site. The commenters can be helpful and I tend to check out their linked blogs.

  7. I highly recommend “Nice Girls Don’t Get Rich,” the follow-up to “Nice Girls Don’t Get the Corner Office” by Dr. Lois Frankel. I read several books geared specifically to women, and this one was the best.

    If you’re completely new to finances, and relatively young, Suze Orman’s book, “The Money Book for the Young, Fabulous and Broke” is also great.

    It’s really a huge mistake to opt out of your company’s retirement plan, unless you’re saving more than they offer by yourself, outside their system. Most retirement systems take some out of your paycheck, and then the employer makes a contribution, too, and it’s tax-free or tax-deferred. (If these words don’t make sense to you, then do yourself a favor and read one of the very basic finances books. Get yourself educated. They are life lessons.)

    The magic ingredient to retirement savings is time, so you need to put as much as possible away when you’re in your 20s. Your future self will thank you.

    I also have a great financial adviser at Edward Jones. I recommend her to everyone I know.

  8. I highly recommend the book Your Money or your Life in terms of figuring out how much money you make once work-related expenses are accounted for (clothes, commuting, unpaid overtime, etc). It’s basically about finding the central values in your life and realigning your money to follow these values.

    Part of the problem I had is that I knew how much I made, I knew I should invest, and I knew that eventually I had larger goals that would require money… but the in-between part of those, and the specifics, was completely fuzzy, and this book helped clarify a lot of that.

  9. Regular poster but anon for this.

    Immediate TJ: Ladies, I am having such a rough day. I have put SO much work into a really big deal and was told I would be going with the senior partner to help close the deal. I am so proud of all the work I’ve done for this closing, and I was told at the last minute that there wasn’t enough room for me at the closing.

    I know that this is just how it goes and there’s nothing to be done about it, and that I just need to suck it up and deal with it, but I’m so disappointed. I’ve worked so, so hard and was really looking forward to the opportunity to be there.

    That’s all. Just a sad, maybe totally unjustified, vent.

    • Been there :

      Internet hugs. Totally been there. Hopefully all your hard work won’t go unnoticed by the senior partner and the client. I’d have a nice glass of wine to celebrate the closing if I were you, regardless of whether I attended the closing or not!

      • This, also: Shoes. When I have worked my *ss off on a big deal for months, and it finally closes, I buy myself a pair of shoes. It is better when you get to be present at the closing, but you deserve shoes nonetheless.

    • Boo. That’s frustrating. It’s always nice to get to be there to see the deal finally get ink on it. You should still treat yourself to a drink/cookie/gold star of your chosing for getting it done.

    • T. McGill :

      It is a justified vent! Stinks to work so hard on a deal and not be able to see it close. Hope the partner at least acknowledged all your efforts.

    • You’ve probably done this, but I would let senior partner/your boss know that you *totally* understand why you can’t be at the closing but are disappointed that you couldn’t be there because the development opportunity is important to you and you put a lot of work in. This way there is no room for them to think that Anon really didn’t mind not being there and won’t mind not being there in the future.

      • Anon (OP) :

        Thanks for the advice and internet hugs, everyone. I really appreciate it. A friend of mine who’s leaving town next week is just offered to take me out for dinner and drinks tonight, which I’m very excited about.

        I do like the idea of buying new shoes, although I just spent way too much at the NAS. Oops.

        Unfortunately, that’s actually part of why I feel sad…my office is business casual most of the time, and I’m dressed in a really sharp suit that I love and my new heels which is a reminder of how I was so ready. Boof.

        Senior partner forgot something and called to have the office assistant bring it over, and on the phone did say to me that I did a “fantastic” job and thanked me for staying at the office. Turns out he wanted me to field emails for any unresolved issues. I’m still really disappointed, but I at least feel a little better.

        Thanks again everyone!

  10. Best finance book for the 20-something set: I Will Teach You To Be Rich. It’s a fun read, and the tools are explained well. It’s hard to read the book and not make better decisions afterwards.

  11. Step 1: don’t buy a popsicle shaped coin purse.

  12. I like “The Coffeehouse Investor” for basic investing, especially for people who don’t want to spend a lot of time thinking about their investments. I make the investing decisions for our household but had my husband read this short book so he would understand the basics. It slants towards simple asset allocations and index funds.

  13. Negotiator :

    Sorry for the TJ but I could use some advice. I’m interviewing for a job that will include a lot of business contract negotiation. I anticipate (based on previous interviews at this company) I will be asked to give examples of previous negotiations. I have spent significant time as a corporate attorney drafting and negotiating contracts of various types but am having trouble telling the story of a negotiation. I think this has to do with so much of it being knowing the parties involved and a lot of going back and forth discussing parties’ goals and values for specific terms. Sometimes there’s a creative solution, but much of the time it’s just knowing how much weight you can throw around and how long something can be waited out…

    Not sure what I’m asking for other than help structuring the story of specific negotiations that won’t bore my audience but gets across that I can handle a business position with substantial negotiating required. Also, any advice for how to describe my skills?

    TIA!

    • When I negotiate, all bets are off. It’s my way or the highway and the other side gets it quick. Tell them you are fierce when you need to be and a kitten when you want to be. This is how you get men to be Putty in your hands. With this, the job should be yours!

  14. I like I Will Teach You to Be Rich a lot for the comprehensive, easy-to-digest advice, but the author’s cockiness and snarky tone can be annoying. The book I would recommend to pair with that is “All Your Worth” by Elizabeth Warren and Amelia Warren Tyagi. One of their big ideas is a balanced formula to for Must-Haves/Wants/Saving. It’s a good starting point and also works better for many people than tracking every penny.

  15. The book by the Motley Fool authors is a great introduction.

  16. Yay! This was my question. I appreciate all of your comments! My summer reading list just got longer :-)

  17. My husband and I are looking to get our finances in order (recently married, newly graduated from law school etc) and are wondering if anyone can recommend a fee for service financial advisor in the DC area? Thanks in advance!

    • Wildkitten :

      First Command was recommended to me. I think they specialize in working with folks who work for the government.

      • First Command has settled many a lawsuit recently over its fees and products, and they were given unprecedented access to military bases to the exclusion of others. And of course they aren’t independent, the staff push only products they receive a commission on (not rare, but something to keep in mind). All in all bit shady, I’d look elsewhere.

    • David Greene at Bernstein Global Wealth Management is great. A lot of financial advisors are more salesman, where I’d describe him as a quant guy who likes helping people figure out their money. He started, managed, and then sold several successful businesses before going the financial advisor route, so my impression is he does this more for enjoyment than the salary.

  18. Silicon Valley Vixen :

    If anyone is from Silicon Valley, check out Tamara Blue on LinkedIn. She is an experienced advisor who focuses her practice on professional women. Her seminars are informative.

  19. I have found a lot of useful, user-friendly info on morningstar.com. You have to sign up for a free membership to access the columns. Christine Benz writes a great column on personal finance called “Improving your finances”. They also have a section called “Real-life finance – start investing” where you can find “Christine Benz’s step-by-step get going guide”.

  20. I’m going to 2nd Ramit’s book. It is very much for young people & people who don’t necessarily have a lot of money. Each chapter is set up in a “what you should accomplish this month” checklist style which is amazing imho. It also just helps you get the basics set up so that when you do have more money, you will be able to jump onto more advanced finance lessons.

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