What are the best ways to improve your financial literacy? Whether you live for elaborate investment maneuvers and tax-shielding strategies or have a hard time distinguishing ETFs from HSAs, it's important to both know the basics and learn the resources that help you make financial decisions with the best information.
If you're already an expert at the art of the short squeeze, you are likely financially literate and should focus on online brokers, trading platforms, robo-advisors, and analysis tools. If you're someone for whom money matters aren’t exactly a strong suit, understanding the basics is absolutely essential if you hope to achieve major goals such as buying a home or building an adequate retirement fund.
Wherever you're coming from, there is no shortage of resources that can help take your financial know-how to a new level. We’re partial to a certain finance website, of course, but the reality is that there are a number of tools that are worth your time. Here are some places you’ll want to explore first.
- Books and magazines remain a great way to learn about financial topics, although it’s important to find a publication geared toward someone at your learning level.
- The past few years have seen a proliferation of personal-finance–oriented podcasts that will hone your money-management skills in your spare time.
- Libraries and civic centers sometimes host presentations from local financial professionals, which are often geared to novice investors.
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Find a Good Book
For anyone trying to build financial literacy, the obvious place to start is a good book. The big advantages of print are that you can go at your own pace and hone in on the topics that interest you the most. Any good library will have a pretty vast selection to choose from, but here are some highly regarded titles to start you off.
'Personal Finance for Dummies, 9th Edition' by Eric Tyson
Sure, opening up a book designed for “dummies” takes some humility, but those who dig through Eric Tyson’s expansive tome are usually rewarded. At more than 400 pages, Tyson covers it all—from budgeting and investing in mutual funds to understanding different types of insurance as well as discussing the changes in the 2018 tax bill. Other new topics in the latest edition include cryptocurrency, technology, and even millennial lifestyle changes. Don’t expect a deep dive into every topic, but for a quick introduction to key concepts, it’s a good place to start.
'Your Money or Your Life' by Vicki Robin & Joe Dominguez
This was the book that defined the financial independence, retire early (FIRE) movement often tied to the millennial generation. The main goal of FIRE advocates is to save 25x their annual expenses, following which they plan to withdraw 4% as retirement income. To meet their savings goal requires a very frugal lifestyle and a firm commitment to the system. The book was fully revised in 2018 and is one of the most influential books ever written on personal finance.
'I Will Teach You to Be Rich' by Ramit Sethi
When a book is described as "breezy and irreverent," one might think it not worth reading. In this case, one might be wrong. Ramit Sethi's self-described "no guilt, no excuses, no BS, just a 6-week program that works" quickly became a New York Times and Wall Street Journal bestseller, not for being breezy or irreverent, but for teaching a generation how to earn more, save more, and live a rich life. The revised 2019 second edition teaches you how to choose the right accounts and investments so your money grows for you—automatically.
Subscribe to a Financial Magazine
With so much great content available on the web, forking over money for a print magazine might seem like an antiquated approach. Still, finding a publication in your mailbox every week or every month keeps you from falling off the finance wagon for too long. In addition, magazines have a way of introducing you to topics and ideas you wouldn’t have sought out on your own. Below are some of the best when it comes to developing your financial acumen.
There are other publications that contain personal finance information, but Kiplinger is the only print magazine left that’s focused entirely on investing and money management. Unlike a number of other finance outlets clearly geared toward the business class, Kiplinger has always focused on clear-cut advice for everyday investors. Published monthly, it contains articles on investments, tax strategies, estate planning, and more.
For someone who already has a fairly strong grasp of how markets work, Barron’s is a great tool for tracking specific industries and companies. The weekly newspaper-magazine offers stock picks, breakdowns of top-selling mutual funds, and other actionable content designed to give active investors an edge.
Compared to the other publications on this list, The Economist casts a broader net. Readers will find articles on economics as well as politics, technology, and the arts. It’s not the straightforward advice-based content you’ll find in, say, Kiplinger, but for readers hoping to get a sense of which events are shaping the global markets, this U.K.-based magazine is a treasure.
Tune in to a Podcast
Whether you’re in the car, going for a jog, or doing work around the house, podcasts are an easy way to absorb some money-management tips without a whole lot of effort. The iTunes landscape is pretty crowded, so you’re bound to stumble upon any number of worthwhile shows. Here are a few of our favorites, in addition, of course, to The Investopedia Express, Editor-in-Chief Caleb Silver's weekly take on all things financial.
A certified financial planner turned podcaster, Shannah Compton Game says her goal is to demolish the taboo of talking about money. Released twice a week, the podcast features interviews with fellow finance experts on topics ranging from paying off student loan debt to negotiating your salary. If you’re looking for something geared toward the financial lives of young adults, this accessible show is hard to beat.
The show, hosted by Laura D. Adams, "has been downloaded more than 40 million times by legions of loyal fans." Laura's forte is applicable advice and tips that listeners can implement immediately following each show. And the weekly shows are short at about 10 minutes each. Inspiration for Money Girl podcasts comes from current events, social media, listener questions, and Laura's conversations with her friends. The variety makes it easy and fun for listeners to understand complex personal finance topics. Money Girl can be heard for free on the Money Girl blog and on many apps, including Apple Podcasts, Spotify, and the Stitcher app.
Those seeking a better understanding of what’s going on with the economy will probably find NPR's Planet Money a great starting point. The podcast likes to take recent news stories—the development of a COVID-19 vaccine or trade wars with China, for example—and give them added context. The show doesn’t always take aim at the big headlines, though; one recent episode tackled the plausibility of the television show The Simpsons -- through the lens of the economics of the modern middle class American family. If you’re curious about all things economics, this is for you.
'The His and Her Money Show'
Learn the basics of marriage, money, and financial independence with Talaat and Tai McNeely and their guests, including Dave Ramsey. His and Her's wide range of topics includes credit, debt, saving money, investments, real estate, earning from side hustles, tax deductions, and even making money from your car.
Explore Community Events
In-person and virtual events are another opportunity to deepen your financial literacy and start making wiser choices with your money. Public libraries, for example, sometimes host seminars led by local financial professionals. Many of these events feature question-and-answer sessions in which you can get personalized advice on a specific financial scenario you’re facing.
There are also a number of community-oriented financial literacy programs around the country that offer a variety of resources aimed at low- and middle-income adults, including budgeting and investment classes. Some offer free counseling sessions for eligible participants, in which you can talk one on one with a financial coach.
What's Financial Literacy?
Financial literacy is when you understand the basic concepts of saving, investing, and debt management at a level that gives you a sense of financial well-being. While these three concepts are the bedrock of financial literacy, each leads to other financial topics, all of which contribute to more in-depth knowledge and skill.
What Are the Key Components of Financial Literacy?
There are five key components of financial literacy, according to the Financial Literacy and Education Commission: Earn, spend, save and invest, borrow, and protect.
What Are Good Resources to Improve Your Financial Literacy?
Three excellent resources for improving financial literacy are books, including the Dummies Guide to Financial Literacy; magazines such as Kiplinger; and podcasts like NPR's Planet Money.
The Bottom Line
Improving your financial literacy is a good way to make sure that you’re building healthy money habits and investing wisely. With the growth of podcasts and other digital media, there are more places than ever to get valuable information.