In recent years, more than half of the states in the US either passed or introduced legislation that would mandate a personal finance course for high school students. It’s not a shock that this issue has become a sticking point for state governments. Personal finance issues plague Americans.
More than half of American adults live paycheck to paycheck. It’s not just at the low-income end of the spectrum, either. While the legislation will help future generations manage their finances, it’s not much consolation to adults. There’s where personal finance books can fill the gap.
Not sure what you’ll get from them? Keep reading for five reasons you should start reading personal finance books today.
1. Learn the Lingo
The world of personal finance is littered with terms and phrases that can leave the layperson baffled, such as:
- Debt-to-income ratio
- Compound interest
- Gross and net income
Personal finance books for beginners can help people learn these terms and demystify some of the forces that affect your financial health.
2. Learn to Budget
Many of the best personal finance books focus some or even all of their time on the issue of budgeting. Learning how a budget works and how to make one can spare you years of financial agony.
A budget provides you insight into what money you have and where it goes. That information arms you to make better financial decisions and can even help you achieve goals.
3. Learn about Investing
Finance books can also help you get a handle on what kind of investments are out there and their risks. For many people, that starts with funding retirement accounts like a Roth IRA or a 401(k).
Of course, you can branch out with a brokerage account and play the stock market or invest in real estate.
4. Increase Wealth
Many of the top personal finance books deal with increasing your wealth. They offer a variety of short-term and long-term strategies to help you achieve that goal. For example, one key way of increasing wealth is for you to develop multiple income streams.
You can do that with short-term strategies, like a second job, or long-term strategies, like running a side hustle that produces passive income.
5. Understand Debt
Consumer debt is rampant in the US. Personal finance books help you understand the true costs of consumer debt. They can also offer strategies on reducing or paying off those debts, such as the debt snowball or the debt avalanche.
Personal Finance Books and You
Reading personal finance books isn’t just an armchair exercise. It’s a way that you can better understand and take control of your own financial life.
It can help you learn about budgeting, which helps you make better financial choices in the short term. It also helps you get a handle on investment options, such as retirement accounts, which can help secure your financial future. Learning about personal finance also helps you see how damaging consumer debt is in the long run.
Looking for more personal finance tips? Check out the Finance posts in our Business section.