What are the best personal finance books for people who are actually poor?

[amastewa93]

"Personal Finance for Dummies" and the like have great advice for people who are looking to better their finances, but what about individuals without the means or support to get started? Are there any tools for individuals who are flat broke and come from broken homes?

I ask because I've been in a place where I had nowhere to turn for advice or help. I was living paycheck-to-paycheck, couldn't get a loan from anyone, had no credit, and no savings. Are there PF help books and tools for these folks? What are they?

[bjl584]

A book, or a course, or even a personal mentor are all just tools. You can find any of them for little cost or even free.

Financial literacy is more of a mindset. Anyone can do it if they are willing to learn and do the work.

Awareness of what's out there might be more of an issue. How do you take someone who is in extreme poverty and show them that there is another way to do things?

[Joan.of.the.Arch]

I'd nominate Amy Dacyczyn's Tightwad Gazette. Classic, though I wish she would make an updated edition. I also suggest poor people not take out loans if at all possible.

[disneysteve]

I'd nominate Amy Dacyczyn's Tightwad Gazette.

That's a good choice. When you are poor, you need to really squeeze every single penny in your budget and Amy's info can help do that.

So many people (nearly everybody, really) says they've cut their budget as far as they can and that is virtually never really true. There are almost always more ways to cut and more ways to save, even if it's just a few cents here or there. When you're poor, every dollar really counts.

ETA: Somewhat off-topic, but before Amy published the books, she started with a monthly newsletter. I had a couple of letters and suggestions of mine published in the newsletter way back when.

[Smallsteps]

Everyone has a different style or willpower. I used to read 3 books out of the finance section of the library every two to three weeks. Do I remember the titles?....... not so much.
I gleaned what I could / would or will stick with and built my plan from many different books/ articles/ or listening to people like Dave Ramsey.
Many books and articles start off like that old Steve Martin routine "if you want to be a millionaire...................... first get a million dollars.
Those types I usually returned to library only glimpsed through.

[amastewa93]

How do you take someone who is in extreme poverty and show them that there is another way to do things?

That's a good question! Is there a way? It's probably not hiding in a PF book... It requires lifestyle changes. That's why poverty has been an unbreakable cycle... but there are no real "resources" available for most to get out of it, IMHO.

[disneysteve]

That's a good question! Is there a way? It's probably not hiding in a PF book... It requires lifestyle changes.

But couldn't the motivation and nuts and bolts of how to make those lifestyle changes come from a book?

It's easy to tell someone something like "stop buying processed food" but if they don't know how to cook or don't have any cheap and easy recipes, the advice doesn't help. A book like Tightwad Gazette, mentioned above, talks about cutting food costs and how to go about that and even has some good recipes.

I think if someone is ready to change and seeking help, there are a lot of books that can help. Some help just by encouraging the change of mindset. Books like The Millionaire Next Door or The Wealthy Barber are good for that. Teaching folks that they don't need to spend a bunch of money to be happy or that financially successful people often don't have the things that you might associate with wealth is a great lesson.

[TexasHusker]

Any good savingadvice member isn't going to pay for a money book.

Keep rummaging through dumpsters and yard sales until you cabbage onto one for free.

[amastewa93]

But couldn't the motivation and nuts and bolts of how to make those lifestyle changes come from a book?

Good point. A book definitely could help with changing the way they think about things and providing alternatives...

[disneysteve]

Any good savingadvice member isn't going to pay for a money book.

Keep rummaging through dumpsters and yard sales until you cabbage onto one for free.

Not so sure about dumpsters (for this purpose at least) but the library for free books and yard sales and flea markets for really cheap books for sure.

In my younger days, I tore through a ton of personal finance books and books on tape from the library.

[myrdale]

I really enjoyed the book Thou Shall Prosper. The Total Money Makeover is another good one. Check through at Goodwill for books, you might can get used copies for $1.

Listen to some David Ramsey also. He is geared more towards getting people out of debt, and it doesn't pertain to everyone but it is a good place to start.

Clark Howard is good to listen too also.

The fact that you found this forum shows you're already on the right track. A few basics that might help, regardless of what books you find are:

1) Do a written budget. At the top of the page write down your total monthly income, then under that list as many of your expenses as you can. Account for every dollar. The sum total at the bottom of the page should be $0.

2) Avoid title loans and pay day advance business. Never ever step foot in either of these places.

3) Don't put more on a credit card than you can pay off each month in full. If you do have some large balances, start working them down. If you can control them they are fine. If not, pay them off and get rid of them.

4) Just because your neighbor and cousin drive $40,000 cars, doesn't mean you need to. Find a good car for <$1500 than can work until you have more cash. DO NOT lease a car. Also your car should not be more than half your total annual income.

5) Work work work. If your working part time at Taco Bell, get a second job and work part time at Wendy's too. My overall point here is increase the hours of labor you produce each week and your income will increase too.

6) Look at education. If you don't have a high school diploma, make a GED one of your top goals. Past that not everyone has to / needs to go to college, but if there is something you're interested in, find a trade school and work towards it.

7) If you can put anything in an IRA do it. You will be amazed how your money will grow over the years.

8) Stay away from any get rich quick schemes. If it sounds too good to be true it is.

9) If there are no jobs in your town, move.

Gosh there is soo much more but hopefully this is enough to high light some of the advice you will find in nearly any book you come across. Also everything above is one size fits all, so being completely ignorant of your situation and details it is what I would tell the average person.

[LivingAlmostLarge]

if you have no money and want to turn it around go to the library and read. Use free internet nowadays. Don't pay for it. Depending on where you live you can always find it. When we moved my DH couldn't get internet for a week installed he would sit in his car at night outside barnes and nobles and get free wifi before we tethered our phones.

When we were really poor my mom always took us to the library to read and gain knowledge. She read a lot and that was her downtime. I doubt we had tv if I recall.

[Gailete]

I would highly suggest this book: How to Get What You Want In Life With the Money You Already Have by Carol Keeffe. It is perfect for anyone struggling to make ends meet and being swallowed alive by credit card bills. Although I have read others, this is the one that really helped during my marriage to Mr. Big bucks. I continue using the systems set up during that point in my life to try to keep on track of bills and spending. This book can probably be gotten from inter library loan. There are also copies starting at a penny on Amazon. My copy sits with my other money books that have been a huge help.

[JoeP]

The biggest problem I have with most books and sites on this subject is that they often prescribe how to "fix" something without requiring the important prerequisite basic knowledge. I see this a lot on a few sites I visit where people come with small engine problems, list the symptoms, and expect a quick fix.

Can a quick win be achieved this way? Sometimes, but I'd argue that until one has even a basic grasp of important financial concepts, they cannot successfully take control of their situation. That's exactly why you'll hear me lobby for public education to embrace basic financial education starting when students are young, in order to equip them with enough knowledge to make smart choices.

So to answer the question of books on finance for the poor, I'd start with pretty much any site that comes back when you google "finance 101." The good thing about this method is that you can highlight an unfamiliar term and do another search. The only other resource I'd recommend is one on basic math, so that the student will know how to calculate percentages. I'm stunned that some adults don't know who to calculate 20% of a number.

[Gailete]

One of the reasons for recommending the book I did, is it helps a person see that they are putting off pleasures that they really want because of a lack of funds. It is a huge step with the Baby steps portion of Dave Ramsey's and other authors advice. To tell a person swamped in debt to start setting aside and pay off debts and to quit spending money on their Starbuck mocho chocolotae lattee or whatever they are called (I’m no coffee drinker). It helps them find a way to save enough that say maybe each Friday they will have enough CASH to buy that coffee.

She begins with the understanding that you may have lots of debt hovering over your head for years, but the more you work at paying cash for the 'little' things in life, the more you will notice that those cc bills are going down. Instead saving to build up a $1000 emergency fund, they must first find a way to have that cash to save up for it. It was her books that caused me to have multiple different savings accounts. My husband doesn't understand what I do, and many members of this forum didn't either when we discussed it a year or so ago, but we are better off financially than he was when I met him. Having those different accounts keeps me from seeing and saying oh we have enough to jump on a plane and go visit the kids this weekend. No, we don't have the money as it is money that has been set aside for taxes. If you want a plane ride to anywhere, you need to save for it. It is easy to tell if you have enough money saved up for a plane ride to anywhere, if you investigate the plane ride account and see it is empty or if it has $1K in it.

Some wouldn't agree with her advice in the least, but the situation that I found myself in years ago with more than $42K in cc debt, a $900 mortgage, a car payment and a husband that seemed intent on believing that he made $800/week instead of earning that 2-3 times a year. Most of his checks were in the $200-low $400/week. He was taking $100 cash advances out of almost every pay which he got to spend on himself, not going into the pot for the whole family's use for things like groceries. Anyhow it was advice that hit me where I lived, and I remember one of things that she said in the book, was that people who up to that point had never had a penny in savings were now seeing that they had interest accumulating in those accounts! Things were turning around. Maybe turning slowly, but enough that at that point if they read some of the other financial advice books they would be more confident in their ability to make a bigger effort towards paying off bills, etc. And she was right about the interest as well as dividends you start accumulating cash! Every year at tax time, I see that amount has gone up.