I've deftly managed to avoid Christmas hype so far in 2007, but that ends this weekend. We'll pick a tree on Saturday. On Sunday I'll start my (virtual) shopping. My family exchanges $5 gifts, and it's always fun trying to see how far I can stretch that five bucks. (Hint: summer garage sales can yield terrific deals.) This year I'm hunting for on-line bargains.
GRS readers are beginning to buzz about the season, too. In the forums, there have been a couple good threads on the subject:
- The price of the gift — “Would you give your own mother a $1.49 gift even it was awesome and you know she'd use it?”
- What I've spent on Christmas — Mia chronicles her Christmas shopping with comments from other GRS readers.
I've received some Christmas-themed questions, too. Yesterday Jess sent me e-mail looking for advice:
Congrats on getting out of debt! I've managed not to get myself in much at all. The constant badgering of my grandfather a few years back irritated me at the time, but I'm glad he did as I managed to avoid getting myself too far in the hole!
That said, my siblings and my girlfriend haven't had the same opportunity to benefit from that experience, so I'm looking for recommendations on a financial book for young adults as a Christmas gift. They run the gamut from 19-23 years old. I love them all, and would love to bestow financial freedom upon them!
I found Wealth on Minimal Wage via your blog, but it didn't have great reviews on Amazon, so I may have to pass. Do you have other suggestions for books targeted specifically at the early twenties? Is there one specific, easy-to-read and understand book that you would recommend? Total Money Makeover perhaps?
On one hand, I worry that personal finance books make strange gifts. I's possible that if Jess gives his girlfriend a copy of Rich Dad's Cash Flow Quadrant, the relationship may take a turn for the worse.
On the other hand, a personal finance book can be a great choice for the right person. It was because a friend gave me a copy of Your Money or Your Life that I finally turned my finances around. But the key was that I was ready to hear the message. If I had received the same book just five years earlier, it would have gathered dust upon a shelf.
To answer Jess' question, I searched through my own personal finance books, visited other sites, and explored the reviews at Amazon. Ultimately, I came up with suggestions for several different age groups.
Books for young children
In general, young children don't understand money and how it works. By engaging them in the actual physical presence of the stuff, it's possible to get them to grasp an otherwise abstract concept.
- It's a Habit, Sammy Rabbit! by Sam X. Renick. Encourages children ages 4-8 to begin saving. Learn more at the It's a Habit web site.
- Alexander, Who Used to Be Rich Last Sunday by Judith Viorst. Fresh from his terrible, horrible, no good, very bad day, Alexander learns about money. Ages 4-8.
- The Money Savvy Pig. While this isn't a book, it is a great way for kids to learn about saving. High marks from every source I've seen.
Books for older children
Pre-teens have begun to learn the value of money. They know it can get them the things they want. This is a great time to introduce them to the way money works — how it's earned and the dangers of frittering it away.
- Growing Money: A Complete Investing Guide for Kids by Gail Karlitz. Covers banks, bonds, stocks, and financial pages. Why haven't I read this yet? Ages 9-12.
- The Totally Awesome Money Book for Kids by Arthur and Rose Bochner. Arthur wrote the original version of this book when he was 11. Now, at age 24, he's teamed up with his 14-year-old sister to revise it. Ages 9-12.
- What Color is Your Piggy Bank? Entrepreneurial Ideas for Self-Starting Kids by Adelia Cellini Linecker. Gets kids out of the house and earning money. Ages 9-12.
Books for teenagers
I don't have a single money book for teens in my library. I did a deep search on Amazon, but all I could find were investment books.
- The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of by The Motley Fools. It's no secret that if a teenager can develop the discipline to save and invest, she can acquire some kick-ass wealth relatively early in life.
- Street Wise: A Guide for Teen Investors by Janet Bamford. This appears to be a much more serious book, designed for teenagers who are actively interested in the stock market and investing.
- Cash Cache. From the same folks who produce the Money Savvy Pig, the Cash Cache is a “beginning personal finance organizer”. This comes with a 36-page handbook and a series of templates (which you can preview in PDF form).
Books for young adults
Young adults are in for a shock as they enter the real world. Suddenly they're on their own, without the parental support to which they're accustomed. I believe (possibly because of my own experience) that this is the most crucial stage in a person's financial life. Begin accumulating debt, and there are years of struggle ahead. Begin saving and investing, and you can put yourself ahead of the game.
- Debt is Slavery by Michael Mihalik. I raved about this book in August. Of all the personal finance books I've read, I think this would have been most useful to me when I graduated from college. It's not a comprehensive guide to IRAs and stocks and bonds. It's a short treatise on how to take control of your financial life. (Read my review.)
- The Money Book for the Young, Fabulous, and Broke by Suze Orman. This is a pretty comprehensive introduction to personal finance aimed specifically at young adults. There's almost too much information.
- Saving for Retirement without Living Like a Pauper or Winning the Lottery by Gail Jarvis. Stresses the importance of investing early so that the power of compound returns can be put to work.
- Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner. This book comes highly recommended.
- You, Inc. – The Art of Selling Yourself by Harry and Christine Beckwith. I picked this book up on a whim and was pleasantly surprised. There's nothing ground-breaking here. It simply collects scores of anecdotes used to illustrate success maxims. (This is more a success manual than a personal finance book.)
Books for old folks
I've begun to think of these books as old friends. I recommend them again and again. Why? Because they work. Their advice helps people get out of debt and take control of their financial situation.
- Your Money or Your Life by Joe Dominguez and Vicki Robin. A classic, and one of the foundation books for the simplicity movement. The authors play off the concept “time is money” in a very literal sense. They encourage readers to sort out priorities, to cut expenses, and then to seek passive income in pursuit of financial independence. A little New Age-y in spots. An excellent book.
- The Total Money Makeover by Dave Ramsey. In debt? Living paycheck-to-paycheck? This one's for you. Ramsey's program is simple and sound. This book includes lots of anecdotes to drive home his points. (The book has a strong religious foundation, but you don't have to be religious to get useful info from it.)
- The Complete Tightwad Gazette by Amy Dacyczyn. Though I've never read this from cover-to-cover — there are nearly 1000 pages! — I often browse this monster to find new ideas for frugal living. If you know somebody who likes to find ways to save, this is a great gift.
- The Bogleheads' Guide to Investing by Larimore, Lindauer, and LeBoeuf. You want expert investment advice? You can't beat the info found here. These devotees of Vanguard founder John Bogle are big on slow, sure investments like indexed mutual funds. They tap their decades of experience to teach about diversification, inflation, and asset allocation. It's not nearly as boring as it sounds. Highly recommended.
I didn't intend to make this list nearly so long — it's just that personal finance books have been an influential in my own financial turnaround. The right book matched to the right reader can make a huge difference. Another way to find a book to suit your purposes is to visit the public library. Obviously you can't give a library book as a gift, but you can browse the selection to find a title that seems appropriate for your intended recipient.
What are your recommendations? Have you ever given a personal finance book as a gift? How was it received? Which books are appropriate for which readers? What about other personal finance gifts? Are there such things?
Update: GRS readers have offered some suggestions. First, Matt Haughey re-iterates that giving an adult a personal finance book as an object lesson can be a bad idea. Don't give preachy gifts.
Second, several people read Your Money or Your Life in high school or college, and found it excellent. HollyP writes: “I read [YMoYL] in my 20s, and what I found most enlightening about it was the link between money and energy. It really helped me clarify my priorities.”
Finally, here are a few books that readers are recommending:
- The Automatic Millionaire by David Bach. Bach explains how to set your finances on autopilot, making saving and investing hassle-free.
- The Wealthy Barber by David Chilton. Chilton relates common sense personal finance advice in the form of a folksy story. This is a good book (my review), and comes in both U.S. and Canadian versions.
- Debt-Proof Living by Mary Hunt. I've never read Mary Hunt before, but I hear she's great. I have one of her books on hold at the library.
- A Random Walk Down Wall Street by Burton Malkiel. There are three GRS readers hounding me to read this. I actually have The Random Walk Guide to Investing on the kitchen table and plan to read it soon.
There are more reviews and suggestions in the comments. If you're looking for additional ideas, be sure to read what others had to say.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.