personal finance 101
November 25, 2018 4:53 AM Subscribe
Hello. I'm a 40 year-old adult who makes a reasonable income doing steady freelance gigs. I pay my bills, I get to travel, and my savings are a joke. I know the standard advice here is to get a fee-based financial adviser, but the thought of doing so stresses me out because I feel so financially illiterate. So I've decided it's time to read up on personal finance to educate myself. Any books you can recommend, MetaFilter? Website and articles are okay too, but I think having a book would be the most help.
I suspect you mean fee-only.
Bad With Money by Gabby Dunn is a podcast by a woman whose family had a really unhealthy approach to money. Through the podcast she explores the things she's learning about how to do better. Some episodes are more helpful than others. This does not replace a good basic personal finance book but it's the sort of thing I find helpful as a supplement.
Here's a list of recommended books from Nerd Wallet.
posted by bunderful at 6:03 AM on November 25, 2018
Bad With Money by Gabby Dunn is a podcast by a woman whose family had a really unhealthy approach to money. Through the podcast she explores the things she's learning about how to do better. Some episodes are more helpful than others. This does not replace a good basic personal finance book but it's the sort of thing I find helpful as a supplement.
Here's a list of recommended books from Nerd Wallet.
posted by bunderful at 6:03 AM on November 25, 2018
You could try the Money Girl podcast. I’ve also seen the book Your Money or Your Life recommended here before, have got as far as buying it, but not reading it!
posted by penguin pie at 6:21 AM on November 25, 2018 [1 favorite]
posted by penguin pie at 6:21 AM on November 25, 2018 [1 favorite]
I found the book Loaded by Sarah Newcomb a very helpful resource. It goes into helping you explore some reasons why people are bad with money and what to do to fix them. I really recommend it.
posted by starlybri at 6:22 AM on November 25, 2018 [3 favorites]
posted by starlybri at 6:22 AM on November 25, 2018 [3 favorites]
A few years ago I was in the exact same place. Now I am financially literate and it has entirely changed my financial situation from getting by to getting ahead. First book I ever read on the topic was I will Teach You to be Rich. It was a good introduction. Finally, listening to Dave Ramsey podcasts and following his method was the real game changer and helped me understand how to set up systems for dealing with my money.
Once you understand basic concepts, you can deep dive into whatever area you have identified as something that you need to understand more. Areas you know are way over your head you can find the right professional to talk to. Honestly, this stuff can be as complicated or as simple as you make it. Even if you work with a professional you should understand what they are setting up for you. Good for you to educate yourself on the topic!
posted by KMoney at 6:53 AM on November 25, 2018 [3 favorites]
Once you understand basic concepts, you can deep dive into whatever area you have identified as something that you need to understand more. Areas you know are way over your head you can find the right professional to talk to. Honestly, this stuff can be as complicated or as simple as you make it. Even if you work with a professional you should understand what they are setting up for you. Good for you to educate yourself on the topic!
posted by KMoney at 6:53 AM on November 25, 2018 [3 favorites]
Admittedly I read it after I was already somewhat experienced, but Personal Finance For Dummies was a very good primer on this. There is no topic too basic for it to explain, which was often annoying but every once in a while filled in an important gap (or more importantly corrected a deep misunderstanding) in the basics for me.
I would suggest it as a good book to at least skim before starting in on more substantial works.
posted by Tell Me No Lies at 6:54 AM on November 25, 2018 [1 favorite]
I would suggest it as a good book to at least skim before starting in on more substantial works.
posted by Tell Me No Lies at 6:54 AM on November 25, 2018 [1 favorite]
Since you are open-minded about non-book resources, here are what I would consider three very good ones: You Need a Budget, the Mr. Money Mustache forum investment order for those in the US, and Get Rich Slowly.
Congrats on taking charge of this very important part of life. It's shocking how little many people (even really smart ones) know about money, investing, how it works, and how small changes can have really big implications for your future life (see: A Millionaire is made Ten Bucks at a Time). Huzzah!
posted by SinAesthetic at 7:06 AM on November 25, 2018 [3 favorites]
Congrats on taking charge of this very important part of life. It's shocking how little many people (even really smart ones) know about money, investing, how it works, and how small changes can have really big implications for your future life (see: A Millionaire is made Ten Bucks at a Time). Huzzah!
posted by SinAesthetic at 7:06 AM on November 25, 2018 [3 favorites]
Get Your Money Together, a fabulous book written by Lillian Karabaic of Oh My Dollar. She's a threadbare millennial freelancer who skips the buzzwords and cuts straight to the emotional heart of your question: what is your money for? Once you know that, Karabaic shows you how to de-stress, save, invest and spend it. Also, there's cats. And Bowie. Seriously, this is the best personal finance book I have ever read, I evangelize it to all my friends. One pal hadn't peeked at her checking balance in over a year and now she makes weekly budgets without fear. It's amazing and gentle and savvy and good. Karabaic also has a podcast and a bootcamp.
posted by fritillary at 7:41 AM on November 25, 2018 [1 favorite]
posted by fritillary at 7:41 AM on November 25, 2018 [1 favorite]
Once you feel like you have a handle on what this personal finance thing is all about, take a look at the Boglehead Wiki
Boglehead is a reference to John Bogle, who founded Vanguard.
posted by Arthur Dent at 8:42 AM on November 25, 2018 [3 favorites]
Boglehead is a reference to John Bogle, who founded Vanguard.
posted by Arthur Dent at 8:42 AM on November 25, 2018 [3 favorites]
I am medium-experienced with money matters. For people in your shoes, I believe the r/personalfinance “prime directive” Is the single best starting point. It is a one-page summary that draws on the work of many of the experts mentioned above, including Bogle and (a variation of) Ramsey. Although I don’t personally reference this page any longer, it is essentially a boiled down version of what I actually did/do.
posted by samthemander at 9:22 AM on November 25, 2018 [5 favorites]
posted by samthemander at 9:22 AM on November 25, 2018 [5 favorites]
My former therapist once recommended The Real Meaning of Money, which comes at the subject from a psychology rather than a finance perspective. She recommended it specifically because I had a bunch of behavioural stuff around money at that point in my life, stuff that was more about mental health and personal significance than financial literacy.
posted by terretu at 9:54 AM on November 25, 2018 [1 favorite]
posted by terretu at 9:54 AM on November 25, 2018 [1 favorite]
I like a book called Get a Financial Life. It's targeted at slightly younger people, but I don't think that matters. It covers all the basics clearly.
posted by pinochiette at 10:08 AM on November 25, 2018
posted by pinochiette at 10:08 AM on November 25, 2018
Most importantly, do start with a book rather than online. You don't know what you don't know, so you need something that doesn't assume knowledge. Once you've read a introductory book, then you can venture online.
Also consider The Index Card: Why Personal Finance Doesn't Have to Be Complicated
posted by Mr.Know-it-some at 11:48 AM on November 25, 2018 [1 favorite]
Also consider The Index Card: Why Personal Finance Doesn't Have to Be Complicated
posted by Mr.Know-it-some at 11:48 AM on November 25, 2018 [1 favorite]
Yes! I found Amelia and Elizabeth Warren's (yes, THAT Elizabeth Warren) book All Your Worth to be lifechanging. Really easy to follow, and they give you basically a formula to live by. And once you have your day-to-day budget figured out, they give you tips for retirement savings. Please get it - it's so easy to read and use, and completely life-changing.
posted by widdershins at 10:42 AM on November 26, 2018
posted by widdershins at 10:42 AM on November 26, 2018
Honestly, what I did was go to the library and read them all, and lurked on internet forums dedicated to the subject for a while. That was a decade ago, so I don't recall most of the books, and they tended to bleed together. I seem to recall one being written by a mefite called "Your Money: The Missing Manual." Some of the material is likely outdated, but after reading that many books about the same subject I can safely say the high concepts remain the same.
From my perspective as a tech dude, the most important thing is to build systems and habits. Every year I copy last year's budget to new tab in my annual budget spreadsheet. I can look back on how it has become more complicated over time as I learn and earn, but really it's a slow process primarily motivated by major life changes like moving states and taking new jobs. Recurring checks scheduled with the bank every month for rent, CCs automatically pay themselves in full, 401k deductions automatically invest in my stated portfolio mix, cell and phone bill pay is automatic, etc. The point here isn't that it's a lot of work, but rather that you have a lot of time ahead of you and you should invest small bits of your time over the years making your plan the default action rather than downloading a book into your brain and suddenly knowing financial Kung-Fu. You can build up your financial skills over time as you grow your financial assets!
As a freelancer, probably your biggest difficulty is going to be income planning. As a salaried worker, I know how much I get and can plan around that, while freelancers have an extra source of variance of the 'feast or famine' variety. And you'll have limited access to employer provided accounts. I don't know of any resources dedicated to freelancing personal finance, and there really should be some!
posted by pwnguin at 1:32 AM on December 3, 2018
From my perspective as a tech dude, the most important thing is to build systems and habits. Every year I copy last year's budget to new tab in my annual budget spreadsheet. I can look back on how it has become more complicated over time as I learn and earn, but really it's a slow process primarily motivated by major life changes like moving states and taking new jobs. Recurring checks scheduled with the bank every month for rent, CCs automatically pay themselves in full, 401k deductions automatically invest in my stated portfolio mix, cell and phone bill pay is automatic, etc. The point here isn't that it's a lot of work, but rather that you have a lot of time ahead of you and you should invest small bits of your time over the years making your plan the default action rather than downloading a book into your brain and suddenly knowing financial Kung-Fu. You can build up your financial skills over time as you grow your financial assets!
As a freelancer, probably your biggest difficulty is going to be income planning. As a salaried worker, I know how much I get and can plan around that, while freelancers have an extra source of variance of the 'feast or famine' variety. And you'll have limited access to employer provided accounts. I don't know of any resources dedicated to freelancing personal finance, and there really should be some!
posted by pwnguin at 1:32 AM on December 3, 2018
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posted by neushoorn at 5:42 AM on November 25, 2018 [1 favorite]