Book review: “Personal Finance for Dummies, 5th Edition”

There are many personal finance books and tools out there, useful to people in all stages of personal finance. I have a lot to learn before reaching financial independence, and the editorial elves thought it would be useful if I shared some of what I learn with you.

My recent reviews include “FlexScore, Part I (The Book)” by Jeff Burrow, CFP, and Jason Gordo, AIF as well as a review of FlexScore's online tool. This week, I'm reviewing “Personal Finance for Dummies, 5th Edition” by Eric Tyson, MBA.

Why this book? Well, I figure that this is the time of year where people are resolving to eat right, exercise more, and track their money. As a result, we probably have lots of readers who are either new to GRS or returning to the fold after a hiatus. So a book that provided a comprehensive overview of all things financial seemed just the ticket.

Philosophy Behind the Book

Most people are probably familiar with the “for dummies” series of books. For those that aren't, these books provide primers on a variety of subjects that people tend to find difficult or confusing. Eric Tyson, the author of “Personal Finance for Dummies,” has also written other books for the franchise, including:

  • “Investing for Dummies”

  • “Taxes for Dummies”

  • “Home Buying for Dummies”

  • “Small Business for Dummies”

There are also lots of books by other authors on additional, non-financial topics. I have a “Vegetarian for Dummies” floating around someplace, for example. “Personal Finance for Dummies” is written in six parts:

  1. Assessing your fitness and setting goals

  2. Saving more, spending less

  3. Building wealth with wise investing

  4. Insurance: Protecting what you've got

  5. Where to go for more help

  6. The part of tens (this covers ten common life changes and ten tactics for thwarting identity theft/fraud)

Each part is further divided into multiple chapters. The section and chapter divisions make sense in that they are ordered in the way you are most likely to need them. For example, you have to assess where you are and pay down debt before you can focus on building wealth.

However, I think most people are likely to use the book as a sort of reference guide. You are able to flip directly to the part of the book that you need in the moment, then put it away until your next question. There's a very detailed table of contents that outlines what each chapter covers and a very good glossary to help you do this.

What I Didn't Like

I'm not really sure it's possible to dislike this book. In terms of the topics that are covered, it's pretty basic stuff. In addition, while there are “real world” examples throughout, it's not nearly as personal as, say, “Soldier of Finance“. Although now that I think about it, the more personal stories tend to be the ones that work best for me. The tone of this is more textbook-y, which sometimes makes it hard to focus.

As a result, I'd say that if you really tried reading this book cover to cover, you'd get pretty sick of it before the end. However, since that's not really what's intended, I doubt a lot of people are going to do that. Or at least they may start it with the intention of reading it cover to cover only to adjust mid-course!

What I Loved

I really liked the table of contents (dorky, I know) because it made it really easy to find relevant information without having to use the glossary. I also found Eric Tyson's story compelling, which helps you insert some personality into the more bland parts of the book. One of the things he's trying to do is to get you to consider money as something that is both separate from your life and, at the same time, interwoven with every aspect of your life.

As a result, money becomes a tool to accomplish the kind of life you want to live, rather than a goal in and of itself. Which is kind of the way it should be. Tyson also acknowledges that we tend to have a complex relationship with money.

For example, maybe your parents didn't set a good financial example growing up. This could be on either extreme — maybe they were tightwads and so you grew up with a tendency to splurge to compensate. Or maybe they frittered everything away and now you're too scared to spend a cent. Or maybe everything ran smoothly, but you never knew how or why and never felt like you could ask.

This book can help you figure out why you have the relationship with money that you do, identify aspects of your financial life that need adjustment, and help you develop good habits going forward. Additionally, the assumption is that making positive financial changes will be easier if you can connect it to goals that are important to you.

My absolute favorite part of the book was when he delineated between the media's definition of wealth (who has the most money/biggest paycheck) and a personal definition of wealth. What that personal definition is may be different for everyone. The trick is to figure out what will make you happy. From there, you can figure out how to get the money that will enable you to live that life.

Who Should Read “Personal Finance for Dummies”

Like I said, I don't think anyone's going to devour this book in one sitting. But I do think it's useful to have a copy hanging around the house. With tax season starting (ugh! sorry I reminded you) I will probably be giving Chapter 7 a close re-read in the very near future.

Jake and I are hoping to buy a house this year. That goal has become all the more urgent since our landlord was unable to refinance. The condo we live in is scheduled to be auctioned out from under us any minute. So Chapter 14 is going to get pored over too.

But maybe you're in a different place. Maybe you're at the very beginning, struggling to reduce your expenses. If that's the case, Chapter 6 is for you. Or maybe you've got money coming out your ears and struggle to manage it all. Your focus then might be on Chapter 18.

Honestly, this book is so comprehensive there's something for everyone. Plus, it's exactly the kind of book that's available in used bookstores super cheap (that's where I got mine). Win-win!

Do you have any financial resources that you go back to again and again? Share them below!

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Nick
Nick
6 years ago

I’m not really a fan of the Dummies series however I liked this book because it helped me understand that forming good financial habits and killing off bad habits were the secret of long term financial success. Great review Honey.

Snarkfinance
Snarkfinance
6 years ago

I have always likes the “for dummies” books precisely for their text book like tone and organization (like the table of contents… your not the only geek around here). Quick and easy reference points is sometimes better than long winded, less organized PF books if you are looking for something specific. Good review.

Honey Smith
Honey Smith
6 years ago
Reply to  Snarkfinance

Glad I’m not the only person who considers a great table of contents a selling feature, ha!

Justin @ Decisive Dollar
Justin @ Decisive Dollar
6 years ago

Great review! I had read this same title, though an earlier version, a number of years ago. I had also picked it up a discount store for only a few bucks.

I thought it contained very helpful and practical advice – nothing too technical but no so basic that you’re left going “duh!” I still pick it up off the shelf from time to time if I need a quick motivator to take a deeper dive into a specific topic. It helps set the table for further research and learning.

Honey Smith
Honey Smith
6 years ago

Yes. Helping identify areas of interest or need is also a good feature, because then you can seek out an entire book devoted to that subject.

Kalen Bruce
Kalen Bruce
6 years ago

It’s been a long time since I have read this book, but I actually want to go back and look at it again. Sometimes it’s funny the little things you can learn when re-reading a book, even if you think you know everything it has to offer (like I tend to do too much lol).

Jon @ MoneySmartGuides
Jon @ MoneySmartGuides
6 years ago

I find the “dummies” books are better for reference than for cover to cover reading. I’ll read a section that I am interested in and then come back at a later point if there is a different topic I want to learn about that the books covers.

MoneyAhoy
MoneyAhoy
6 years ago

Sounds like a fun and interesting read. I’d like to write one of these myself some day.

Kcg
Kcg
6 years ago

This may be an excellent book. Although there are many things I do not know, my ignorance does not make me a dummy. I resent the title, therefore, I do not read any “for dummy” books.

lmoot
lmoot
6 years ago
Reply to  Kcg

Your reluctance to inform your ignorance because of the title of a book, however, might qualify you. 🙂 I think a lot can be gained if you can train yourself to choose not to be offended, particularly regarding things that don’t actually cause harm, except maybe to your ego…which is your problem. There are many teachings, both religious and secular, that can help you work through that. Afterall, you ARE allowed to disagree with something, yet still experience it and possibly learn from it. Why shut that out because of a title that surely you must know is not meant… Read more »

grrlpup
grrlpup
6 years ago

Check your library for the most recent edition; the 7th was published in 2012. He name-checks companies and funds frequently, so it’s convenient to read an up-to-date version even if the general principles haven’t changed.

Kristin Wong
Kristin Wong
6 years ago

Great review, Honey! I’ve gone back to The Money Book for Freelancers on a few occasions, especially when deciding on retirement options. It was a GRS review, too. Very helpful stuff.

Charlie @ Our Journey To Zero Debt
Charlie @ Our Journey To Zero Debt
6 years ago

I like to believe I’m more advanced with my personal finances then the need to read a “dummies” book, but one thing I learned is that no matter how much you know about a subject, you’ll always learn something new that you might have missed before.

I’m reading Rich Dad, Poor Dad for the second time around and am learning new insights that I’ve missed the first time around.

Bee
Bee
6 years ago

I love this book and credit it with changing my financial life. His section on investing (and why index funds are the way to go) is clear and concise.

Karen
Karen
6 years ago

I have not read this book but am familiar with the “dummies” series and have enjoyed the few I have read. May have to check this one out too.
As far as one that I go back to again, “The Millionaire Next Door.” One of the best I have ever read!

Lyn @ Unexpected Mogul
Lyn @ Unexpected Mogul
6 years ago
Reply to  Karen

Couldn’t agree more. The Millionaire Next Door is must read stuff for nearly everyone. That and Your Money or Your Life are my top two reads (and it’s honestly a toss up which is on top).

Karen
Karen
6 years ago

Your Money or Your Life is on my to-read list!

Vicky
Vicky
6 years ago

I’ve been very iterested with personal finance, in fact i’ve been reading websites and books in relation to it. Until I started investing. This helpful is helpful to share to my family and friends why I am now engaging in personal finance.

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