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Have you ever wanted to manage your money better?
Not an easy task, I know. But it’s worth the effort.
Having the proper knowledge is the most crucial step towards financial stability. With the correct information, money management gets a lot easier.
A quick search for the “best financial management books” on Google will show plenty of titles to read. And that’s a problem.
One, it will be a challenge to decide which ones are worthy of our time.
And two, most of them do not give sound advice.
These stirred me to compile a list of sound books about money management to share with you. I’ve read every finance book and ebook I can get my hands on since 2009. I pretty much have filtered the good ones from the ones that can get you in trouble.
Yes, wrong information will not only waste your time and money. It can also result in something detrimental.
Read: 6 Best Ways To Learn Business At Home
How to find good financial management books?
I was more cautious in the books and ebooks I read ever since I buried myself in debt last 2016. I do take 100% responsibility for the mess. Yet, I can’t simply let those “best financial management books” off the hook. No doubt they contributed to my money woes one way or another.
Please allow me to give you some pointers on how to screen for good books first. It will help you make better decisions for yourself.
What’s good to me might not be suitable to you, and vice-versa. Hence, it will be an advantage for you to develop the nose to smell whether the book is full of crap or not.
1. Check out the classics
What are the classics?
The classics are books that have been read and re-read for generations. Some people call them the “must-reads.” If these books stood the test of time, there’s a great possibility it’s worth the read.
2. Stay away from books that ask you to buy their products
More often than not, I would stay away from money management books that ask me to buy their products. Or sign-up for a course. To be blunt, these are potential scams.
3. Get recommendations from the last good book you read
Good books, in general, get inspiration from other good books. What authors do is get ideas here and there, then compile them with their own words. So if you find the last book you read was sound, check its appendix section at the back. You will see titles you might also enjoy.
4. Get recommendations from trustworthy people
Book reviews are good, but I’m beginning to question their authenticity. It’s so easy to manipulate the ratings these days. What I do is get recommendations from people I trust. I would rather pick up a low-rated book recommended by a person I trust than a “bestseller” he/she tells me to skip.
BONUS: Consider Books with Biblical Sense
The Holy Bible is the best-selling book of all time. While you may not believe it as the Word of God, you will agree that it contains invaluable wisdom and life lessons. A book written on a solid Biblical foundation has excellent potential to be a good one.
Read: 8 Financial Benefits You Can Enjoy As A Stay-At-Home Dad
ebooks over paper books
I hope you will consider ebooks more than paper books once you zeroed in on a title you wish to read. Paper books are fantastic. But the apparent reason I advocate for ebooks is their environmental friendliness.
One tree can more or less produce 62.5 books. What this means is whenever we download an ebook 62.5 times, we preserve one tree.
Yet, there are still other benefits ebooks have over paper books:
1. They take up less space.
2. They will never get lost or destroyed.
3. You can access your ebook anytime with your smartphone, laptop, or e-reader.
4. Ebooks get updates.
5. Ebooks are searchable.
6. You can highlight passages, take notes, and share them on social media with ease.
7. It allows you to read even in low-light areas.
8. You can customize the text size and background color.
9. You can organize your books in a snap.
10. Ebooks are less expensive.
Read: My Rich Dad Summit Experience
9 Good Financial Management bookS and Their Key Lesson
I want to honor your time with me. Besides the titles, I’ll also throw in one key lesson from each financial management ebook on the list. I intend to not only help you find your next read. But for you to already become a little better with money by the end of this post.
1. The Total Money Makeover — Dave Ramsey
Key learning: Every Peso Should Have A Destination
“Where should my money go?” is a better question than “Where did my money go?” Money is active. It will flow whether we like it or not.
Most people struggle because they do not know where to spend their money. It’s the reason why they end up buying things they don’t actually need. It may not be a big deal at first. But these minor leaks will sink their financial boat one day if they don’t do something about it.
Zero-based Budgeting
How about you? Where is your money headed?
If you’re unsure, then you can start with a list of 5 to 10 priorities.
Distribute your money afterward to those priorities until you have zero cash on hand. It’s what Dave Ramsey calls zero-based budgeting. Every peso/dollar should have a purpose.
Here’s an example:
P30,000 — cash on hand
Less:
P3,000 — For emergency (10%)
P6,000 — Necessities (Food, Medicines, etc.) (20%)
P3,000 — Bills (Power, Water, etc.) (10%)
P3,000 — Transportation (10%)
P6,000 — Rent (20%)
P3,000 — Education (10%)
P3,000 — Debt Payment (10%)
P1,500 — Charity (5%)
P1,500 — Fun (5%)
= P0
You can use an app, a spreadsheet, or the good old envelope system to keep track of these funds. We used the same approach to pay off eight credit cards.
Get a copy of The Total Money Makeover.
2. Rich Dad Poor Dad — Robert Kiyosaki
Key learning: Assets And Liabilities
Contrary to popular belief, wealth building isn’t more about how we save money. Instead, it’s more about how we spend it.
We shouldn’t save for the sake of saving. The reason we stash money is so we can have enough to spend on things that matter. And for the context of wealth building, what matters is our Asset.
The word “assets and liabilities” may sound intimidating. I like how the book simplified it:
Assets are anything that puts money in our pockets. In contrast, liabilities are anything that takes out.
Sample of Assets
1. Real estate
2. Stocks
3. Business
4. Precious metal/stone
5. Currencies
Sample of Liabilities
1. High-interest debt
2. Wages
3. Car maintenance
4. Subscription services
5. Taxes
In essence, the big goal of wealth building is to get assets and cut liabilities. The more we improve on these two areas, the better our financial health will be.
I wrote an entire article on how my wife and I applied the concept of assets and liabilities early in our marriage. You might want to check it out if you wish to dive deeper into this topic:
Read: Assets and Liabilities Management: Our simple plan to financial freedom
I was hesitant to include Rich Dad Poor Dad on my list of good financial management ebook. The reason? It’s because Kiyosaki advocates the use of other people’s money as leverage, a.k.a getting into debt. He believes there’s such thing as good debt and bad debt.
But the easy-to-understand financial concepts outweigh that controversial part of the book. Please read with caution in case you chose to pick this up.
Get a copy of Rich Dad Poor Dad.
3. The Richest Man In Babylon — George S. Clason
Key learning: Save First
How do we save? Don’t we spend our money first, then save what’s left?
To be honest, have we indeed kept anything in the end?
The more effective way is to do the opposite: Save first, then spend the rest.
The Richest Man In Babylon advised us to do 90/10. It means we save 10% and spend the remaining 90%. Sounds scary? I can relate. I also didn’t think 90% would be enough since I’m already struggling to get by with 100%. But it’s amazing what tiny disciplines and lifestyle change can do. Today my allocation has leveled up to 70/30.
The Purpose of Savings
Now, of course, we don’t want to save and then waste our money on random stuff. Here are the two uses of our savings:
Emergency
We never know when the unexpected can happen. A medical emergency or a car breakdown may get us into a tight spot. But with enough saved, we can continue to have a peaceful sleep at night. Our savings will serve as a buffer or a safety net to take care of these unforeseen situations when they arise.
This type of savings is often called an emergency fund or a rainy day fund. It’s about 3 to 6 months’ worth of our living expenses, as most financial management books suggest. This amount will typically be enough to cover those sudden expenditures.
Investment
Another beauty of saving is it allows us to invest. To make our money make more money. With our rainy day fund set, we can take risks for potential returns.
Get a copy of The Richest Man In Babylon.
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4. The Millionaire Next Door — Thomas J. Stanley and William D. Danko
Key learning: Frugality
What is frugality? It’s the careful management of resources. The manner of being prudent. Not wasteful.
Thomas Stanley spent his life studying millionaires. What he found out about these rare species is different from what we see in movies.
We all grew up with these notions about the rich:
1. They have high income.
2. They live in expensive homes.
3. They drive luxurious cars.
4. They have a lavish lifestyle.
But nothing can be far from the truth.
“It matters LESS how much more you make than what you do with what you already have.” — This is what Thomas Stanley wrote after he interviewed over 1,000 millionaires.
Genuine wealthy people are frugal. They play better defense than offense. They are careful with the money they already have.
After reading this book, it will be easier to spot the difference: Ordinary people focus on income. Rich people focus on net worth.
Get a copy of The Millionaire Next Door.
5. The Millionaire Mind — Thomas J. Stanley
Key learning: The Importance Of A Supportive Spouse
Who we choose to marry will make or break our financial success. It’s not something we expect to read about in a financial management ebook. Yet, this information is vital in our journey to wealth.
9 out of 10 married millionaires in this book said that their supportive spouse is their key to success.
In fact, based on a survey, having a supportive spouse lands as one of the top attributes of the wealthy. It’s only behind integrity, discipline, and social skills.
The Top 5 Characteristics of The Wealthy according to The Millionaire Mind’s Survey:
1. Integrity
2. Discipline
3. Social Skills
4. Having A Supportive Spouse
5. Hard Work
Get a copy of The Millionaire Mind.
Read: The Struggle To Leave and Cleave
6. The Only Investment Guide You’ll Ever Need — Andrew Tobias
Key learning: Stick To The Basics
“The basics of personal finance haven’t changed—they never do.”
There are so many financial gimmicks nowadays, I don’t even know where to start. Yet, no matter what these “experts” say, the key to financial freedom is still this:
Spend less than what you have. Invest the difference. Watch it grow.
Sure, we can always load our rifles and hunt for the bigger game. Or chase the fancy stuff.
But what we’d realize after the dust settles is we may not be that far ahead. Even worse, we may find ourselves behind those who have been faithful with the small things
Essentially, if we want to prosper, what we need is patience.
“…the surest way to become rich is to save all you can and invest it for long-term growth.”
Get a copy of The Only Investment Guide You’ll Ever Need.
7. Your Money or Your Life — VICKI ROBIN, Joseph R. Dominguez, And Monique Tilford
Key learning: We Cannot Earn Money Back
“We can earn more money, but we can’t earn more time.” — It is the phrase we often use to justify our expenditures. But is this true? The possibility is 99.9% of us would say yes. The reason is we always go to work without knowing what money truly is.
What is money anyway? Is it the numbers in our bank accounts? Is it the loose papers in our wallets? How come other financial management books didn’t clarify the true nature of money?
Now let’s settle this matter once and for all: Money is Time. The book calls it explicitly “Life Energy” – The hours of being alive.
Money as Life Energy
Money is something we trade our life energy for. Think about it. When we work, we pinch away hours from our life in exchange for money. The same thing happens when we buy.
If you make P200/hour and buy P5,000 sneakers, then you’ve traded 25 hours of your life for the sneakers. Makes sense?
Money is only a representation of the life energy we traded it for. In essence, we don’t spend money. We spend time.
“Looking around at your accumulation of stuff you can ask, ‘How many hours of my life did I invest to have this . . . chair . . . car . . . matched set of cookware . . . diploma on the wall?’ See what this does to your next purchase.”
Get a copy of Your Money Or Your Life.
Read: What To Do With My Child’s Money? Here are 5 ideas
8. 7 Strategies For Wealth and Happiness — Jim Rohn
Key learning: Value Over Price
“Before I met Mr. Shoaff, I used to ask, ‘How much does it cost?’ But he taught me to ask, ‘What is it worth?’ When I started to base my life on value instead of price, all kinds of things began to happen.”
Which of the following statement do you believe more?
1. “The cheaper the better.”
2. “Quality over quantity.”
We often collide about this topic early in our marriage. My wife is more of the cheaper, the better person, and I am more of the quality over quantity type.
Lalaine gets this rush of satisfaction every time she got something at its lowest price. She doesn’t mind even if what she bought lasted only for a couple of months, or even weeks. Her philosophy is: “It’s cheap, I can buy it again if I want to.”
But for me, low-quality products are a complete waste of money. Even if it costs more, I will choose the higher grade any day. I don’t mind having fewer possessions as long as they are dependable.
Is it worth it?
How about you? Which do you think is the better approach?
I always thought mine was the better way. But what we learned from this financial management ebook is neither is better than the other.
It all boils to this question: Is it worth it?
Here’s an example:
Let’s say you wish to get a pair of shoes for your six-month-old child. Which one will you buy: P150 generic shoes? Or a branded one worth P1,500?
At face value, I’d go for the branded shoes. It looks nicer, has better quality, and has more features.
But is it worth it?
Things to consider:
1. The child is still not walking.
2. Babies grow up fast. The shoes may not fit him anymore next week or next month.
In this case, generic shoes might be the wiser option.
But what if you are shopping for strollers and car seats? These are the products where you’d like to go for dependability, even if it costs more. It’s because you will not only use them for a long time, but it also involves the safety of your child.
Always consider the VALUE more than the PRICE.
“This same concept also applies to money. Don’t spend major money on minor things, and, conversely, don’t spend minor money on major things. Some people spend a fortune on food for their bodies and very little on food for their minds. If you spend more on candy than on inspirational books and tapes, that would be foolish, right?”
Get a copy of 7 Strategies For Wealth and Happiness.
Read: How To Better Myself At Home? Here Are 5 Exciting Masterclasses To Try
9. Money, Possessions, Eternity — Randy Alcorn
Key learning: Invest in things that will outlast life
“Christ’s primary argument against amassing material wealth isn’t that it’s morally wrong, but simply that it’s a poor investment. Material things just won’t stand the test of time.”
Have you ever asked yourself what’s the point in all of these? We invest, we hustle, then one day we pack up and go — leaving everything we ever worked for.
I saw this short documentary about a plane that offers hotel-like accommodation. Passengers can enjoy luxury rooms, food, and drinks while they travel on air. They even have exclusive office spaces and spa-like bathrooms. Of course, these grandeurs come with a price. A ticket for this airplane costs somewhere P800,000 to P1.5M.
Will you take this flight?
I sure want to!
But is it a wise investment?
The reality of death
“If life’s greatest certainty is death, wouldn’t it be foolish not to prepare for what lies beyond this life?”
In a few hours, the plane will land, and you will leave everything you have paid for. Wouldn’t it be wiser to choose a more economical flight and then splurge when you get to your destination?
If I had the money, I’d rather spend P100,000 on the plane ride and P1.4M on my intended place of stay. I don’t mind riding the economy class, for I know I can enjoy better food and facilities when I get to an actual hotel.
You know where I am getting at.
Our beliefs about the afterlife may differ, but we can both agree on the reality of death. Time will come when money will be useless to us. But now, while it is still useful, how are you preparing for the endgame?
“If you read history you will find that the Christians who did most for the present world were just those who thought most of the next.” — C.S. Lewis
Get a copy of Money, Possessions, Eternity.
Read: 10 Responsibilities Of A Father I Learned In Training
BONUS: The Intelligent Investor — Benjamin Graham
Key learning: Inflation
“Americans are getting stronger. Twenty years ago, it took two people to carry ten dollars’ worth of groceries. Today, a five-year-old can do it.” —Henny Youngman
What is inflation? In simple terms, it’s the invisible expense that eats our wealth away each year.
We cannot avoid inflation. Like gravity, it affects us all whether we like it or not.
Our country’s inflation rate is at 4.5% as of this writing. It means our money will lose its value at 4.5% a year due to the increased prices of goods. It will go up or down eventually. But the hard truth is, either way, we will lose money.
So what should we do?
How to deal with inflation
Ice cream melts little by little when exposed to heat. To prevent this, we need to put it inside a freezer.
Similarly, our money (ice cream) is losing its value due to inflation (heat). Thus, the best solution is to put our money in places where it will keep, or even increase, its value (freezer).
To beat inflation, we should deposit our money where it could earn interest at par with the inflation rate. In this case, it’s 4.5%.
The act of putting our money in these “freezers” is called investing.
Investment vehicles
Where can I invest my money?
There’s a lot. Some examples are stocks, bonds, mutual funds, money market, and high-interest savings account. Most of them are safe investment vehicles except for stocks. Still, I propose you get proper financial education before you jump in. Investing can be risky, especially if you don’t know what you are doing.
I wrote more about inflation on this post: Why It’s Smart To Save With GCash Today.
“For this reason, it’s vital to point out that, unlike the speculator, the intelligent investor isn’t investing for quick wins. The only way to reach long-term investment goals is to make sustainable and reliable decisions that are not subject to the whims of the often volatile stock market.”
Get a copy of The Intelligent Investor.
Read: Investment vs Insurance: How to know which one is right for me?
Closing Thoughts on the 9 Good Financial Management Ebook
What do you think about this list? Have you already read any of them before?
I highly recommend these financial management books. I can vouch for these titles as they are the ones that helped me stabilize my family financially.
I hope I did not overwhelm you. There are still books out there I couldn’t enumerate since this post might have gone too long already. You are welcome to comment below or reach us via Messenger if you want further suggestions.
Financial education is a lot of work. It will take time, money, and effort. But don’t worry, the payoff is worth it in the long run.
Keep in touch
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Thanks for reading!
