Money can be an intimidating topic of discussion for many people. That’s because many of us can also have complicated relationships with money.
However, building healthy and sustainable habits – when it comes to money – is definitely possible. And the transition to shift the way we think can take both time and effort.
One way that helps all individuals change our way of thinking is by consuming information on the topic and there’s no better way of doing this than by reading books.
So, here are six books that will change the way you think about money and also help you build better habits in the process.
#1 The Psychology of Money – By Morgan Housel
A former journalist and Motley Fool writer, Morgan Housel frames money in a very relatable way through his book The Psychology of Money. Indeed, Housel insists that doing well with money is much more about your behaviours rather than your IQ or smarts.
He also says that individuals’ money habits today are shaped by their own upbringing and environment and, thus, everyone’s financial journey will be different.
Finally, Housel talks about how money’s greatest value is actually the autonomy that money gives people – that can be seen in terms of control over their time and being able to spend time how they want. In other words, the independence to do as one pleases can be one of the best benefits of money.
#2 Atomic Habits – By James Clear
The book Atomic Habits, by author James Clear, is an award-winning bestseller that has sold more than 20 million copies worldwide.
Looking at the practical ways that we can build good habits, Clear takes a look at both good and bad habits as well as how we can instigate lasting change.
One of the most easy-to-understand analogies is that habits are the “compound interest of self-improvement”. No one expects you to completely transform overnight but just 1% improvements every day or every week can lead to exponential growth over time.
He talks about how making habits easy and obvious is the best way to get things done. For example, by reducing friction (using the two-minute rule) you can simplify your habits to just two minutes to get started.
#3 Your Money Or Your Life – By Vicki Robin & Joe Dominguez
Next up is Your Money Or Your Life, written by Vicki Robin and Joe Dominguez. This book explores how individuals can take back their life by changing their relationship with money.
Taking readers through “9 Steps To Transforming Your Relationship With Money And Achieving Financial Independence”, the programme looks to help individuals transform how they interact with money.
The book reframes money as “life energy” and when you spend money you’re actually spending hours of your life. Lessons like these, as well as critical takeaways such as tracking every dollar earned and spent and aligning your spending with your values, will give readers a solid foundation to transform their money habits.
#4 I Will Teach You To Be Rich – By Ramit Sethi
Many of us may have seen Ramit Sethi’s Netflix show of the same name but the show is actually based off his bestseller book I Will Teach You To Be Rich.
In it, Sethi looks at money as a tool to help you “live your rich life”. By that, he means using money to enjoy what you – as an individual – enjoys. That’s because everyone is different and the path to happiness is ensuring you define what your “rich life” looks like.
Beyond that, he also writes about spending lavishly on what you love but cutting costs mercilessly on things you don’t derive joy from. To ensure you have the best shot of living your rich life, he suggests automating your finances and investing early so you can better focus on using money as a tool to live your version of a rich life.
#5 Broke Millennial – By Erin Lowry
While the title doesn’t inspire confidence, Broke Millennial by Erin Lowry looks at taking control (in a practical fashion) of your finances when you’re in your 20s and 30s.
She looks at, first, recognising your money story and then to go about rewriting it. Much like Housel espouses in his book, Lowry says our money attitude and habits are deeply ingrained in us from our upbringing and early experiences.
By first acknowledging these biases, we can better make progress on changing the money narrative. She also explores how budgeting doesn’t have to be restrictive (it’s more about control) and why we need to face debt head on to deal with it – not avoid it.
#6 The Simple Path To Wealth – By JL Collins
Based on the concept of achieving financial independence, The Simple Path To Wealth is a straightforward, jargon-free guide to getting there by optimising your investing and living a simple life.
It’s not rocket science as Collins says that individuals simply need to “live below their means” and save a large portion of their income. He says that aiming for a high savings rate of around 50% or more will get you to your retirement goals early.
One other aspect he explores is how to make the most of low-cost index funds or exchange-traded funds (ETFs) in order to give you broad market exposure and grow your wealth over the long term. He dubs it the “ultimate set it and forget it” investment.
As with any strategy, he says that the goal of financial independence isn’t to be super rich but to be free, instead, so that works become optional instead of necessary. By focusing on your end goals, and not status, you can reach your ideal retirement life earlier.
Read Also: Understanding Dave Ramsey’s “7 Baby Steps” To Reducing Your Money Stress
