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My Favorite Finance Books - Live Like a Mensch
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Live Like a Mensch

My Favorite Finance Books

 

Believe it or not, I do read some books that aren't crappy romance novels.  In fact, I have been known to read a book or two in the field of finance. As much as it would horrify my teenage self to know this, I'm actually quite riveted by some of the money books I've read, and might (just might) be more likely to pick up a money book over certain fiction titles, if given the choice. (Teenage me, not to worry. I still love movies and mystery novels. I've gotten over the Smores Pop Tarts, I'm afraid. Yech.)

Of the dozens of finance books I've read over the past few years, there are three that I can whole-heartedly recommend as good advice and/or good reads:

Predictably Irrational by Dan Ariely. I must admit that I have an enormous smarty-smart crush on this author, because not only does he develop experiments that help us to understand just why the rational view of Economics is insufficient, he's also really funny. I listened to this book on my Kindle last year, and then I went back and bought a copy so I could read it, write in it, sigh in admiration over my favorite Behavioral Economist in much the same way tween girls might sigh over the descriptions of Edward Cullen. Ariely writes intelligently about the reasons why we have such a hard time making good money decisions, and he seems to have had a great time testing our irrationality.

His experiments included putting a plate of cash next to an unlabeled six-pack of soda in a dorm common room fridge to see how our honest natures are tempted by both cash and goods (we leave cash alone but we'll happily swipe an unnamed soda, apparently), testing our commitment to gender equality and equal pay among other things during a state of arousal (which must have been a very interesting experiment to write a grant for, and that's all I'll say on the matter), and playing a dating game style "Who Would You Choose" experiment using pictures of undergraduates, some of which had been slightly distorted--to show that if we want to succeed in dating, we need to hang out with someone who looks a little like us, but not as attractive. It'll make us look better in comparison.

Basically, this financial book is a page-turner that will help you have better insight into why you do the things you do. I tell everyone to read it.

The Financial Peace Planner by Dave Ramsey. Back in 2006, a fellow teacher started talking about how she and her husband had gone through the Dave Ramsey Financial Peace University program at their church. I loved the idea of having special cash and savings categories for everything that J and I spent money on, so on a whim I picked this book up at the bookstore. J and I went through all of the weekly exercises, and I started labeling envelopes and making like a bandit at the bank (that is, taking out a couple of hundred bucks in twenties every other week.) It was this book that put the idea in our heads to live on just J's salary for a year before having the munchkin, which meant we were able to send my entire(ish) salary to our Home Equity Loan and pay that bad boy off in a year. I credit this book with our ability to have me work from home and basically be a stay-at-home-mom. I highly recommend any of Ramsey's books if you're looking to get your finances in good shape.

Switch: How to Change Things When Change Is Hard by Dan and Chip Heath. Okay, this isn't technically a finance book, but it's a sociological study that really helps the reader to understand why we're willing to embrace big changes joyfully, like getting married or having a baby, but we're stubborn as mules about little changes, like turning in paperwork on time or avoiding the donuts. The Heath brothers introduced me to the idea of our mind as a rider on an elephant--the rider is the rational, logical, forward-thinking part of our brain, while the elephant is the irrational, emotional, I-want-it-now! part of the brain. The rider can force the elephant to go in the direction the rider wants, but that really tuckers him out. This is why we can have the willpower to resist pizza at lunch, but still find ourselves face-first in the Haagen-Dazs after work: the elephant has taken over and the rider has exhausted himself. In order to change, we need to direct the rider, motivate the elephant, and shape the path that the two travel.

This is another fabulously entertaining book that can help you figure out how to keep bad habits from limiting your potential.

Next on my list to read: Priceless: The Myth of Fair Value (and How to Take Advantage of It) by William Poundstone.

What money books can you recommend?

Comments

 

Live Like a Mensch said:

Back in December, I wrote about three of my favorite personal finance related books , so I thought I'd

March 18, 2013 6:28 PM

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