Personal Finance For Dummies

by Eric Tyson

Many Americans don’t understand personal finance. If you’re among them, it’s probably not your fault. Personal Finance 101 is not offered in our schools – not in high school, not even in the best colleges and graduate schools. It should be. There are common financial problems and mistakes and different people keep making those same mistakes over and over again. Personal Finance For Dummies, 3rd Edition, like a good friend, can stop you from falling into those traps. This book is for anyone who wants a crash course in personal finance. It’s basic enough for a novice to get his or her arms around thorny financial issues, but advanced readers will be challenged to think about their finances in a new way and identify areas for improvement. In a nutshell, this easy-to-understand guide is for anyone who wants to You’ll explore what it takes to start an investment program as you diagnose your current financial health, set new goals, and reduce your spending. Personal Finance For Dummies, 3rd Edition, also Best-selling personal finance writer Eric Tyson is a master at keeping it simple. And his third edition of Personal Finance For Dummies, can help you consider your higher life goals and non-financial priorities (your family, your friends, and your causes) and how you can best accomplish those with the financial resources you have.

Genres: Finance, Nonfiction, Personal Finance, Money, Business, Self Help, Reference

504 pages, Paperback

First published January 1, 1994

Reviews

[Eleanor · Rating 5 out of 5]

I'm about half way through here and this has been a great read. I never thought I'd be so absorbed by a book like this but when you're in that weird transitional state between student and independent adult, a book like this can feel empowering. I can't believe this stuff isn't required education for public schools or even expensive colleges (perhaps those institutions would rather their students not fully understand loans and big money...). I went from having a very basic, very vague sense of budgeting and saving to now getting a grasp on types of retirement plans, forms of savings, and am also getting a great introduction to investing. Before this book, even the words "retirement plans" and "investing" made me sort of worried and uncomfortable. Now I feel like I can ask more intelligent questions.

This book also includes a lot of valid personal advice. Don't become obsessed with building wealth, personal relationships can be more valuable than anything. Also, don't always go with a brand name if the service or product you seek isn't their specialty. Just because it's easier doesn't mean it's wiser. Great advice!

I pick this up whenever I have a spare moment. Highly recommended for anyone who wants a gentle-but-not-condescending introduction to finance! Everyone should get this book when they turn 18.

==

Finished. The above review still holds true. It's easy to skip things I don't feel like reading about yet (buying a house, health care for the retired, etc.) and just zoom in on the most pertinent things to my life. Still recommended for everyone.

[Ian Hrabe · Rating 4 out of 5]

What have I become? I used to be cool! I majored in film and writing because I was going to be the next Orson Wells AND write the next Great American Novel! WHAT HAPPENED?! Alas, dreams give way to reality, which is much richer than you would expect. Unless you read "richer" as "having actual dollar dollar bills ya'll," in which case um, no. I have a beautiful wife and daughter, but we live with her folks out in the country. I spent the first 26 years of my life with absolutely no concept of personal finance. Worse than that, even. I took out high interest private student loans when I was 18 and went to college for 5 years because I was still hoping I'd figure out what I wanted to do. I wasted so much of that loan money on useless crap. It makes me blind with rage just thinking about myself back then. I have spent the last three years whipping myself into financial shape, and when I sat down and read Personal Finance for Dummies, I knew my transformation was complete. I entered the cocoon a passionate young man and emerged from my pupa a grizzled adult who cares only about making the most money possible with my limited skills and ruthlessly providing for my family. This is who I am now. God help us all. That said, while I found Eric Tyson to be dry and probably on the opposite political/ideological spectrum as myself, he did a good job explaining the oft maddening realms of money, mortgages, investing, interest rates, and all that crap. It provided a nice foundation for prospective homebuying, which is the whole reason I went "money mad." My wife looks at me with the same look Dr. Frankenstein gave his monster. "YOU NEED TO BE PUTTING MONEY IN YOUR 401K ESPECIALLY IF THEY HAVE A 5% MATCH ARE YOU DENSE?!" she would say to me when I was working at Half Price Books. I have become a monster.

[Abigail · Rating 5 out of 5]

I picked up this book after reading Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. In that book, the author exposes a lot of the conflict of interest and hypocrisy that are inherent to much of the personal finance industry (financial planners, most of whom are actually broker/dealers, as well as popular gurus), but she recommended Personal Finance for Dummies as legitimate good advice. Eric Tyson, the author, has a lot of experience as a financial counselor, helping people who've messed up (from a little to a lot) get themselves back on track. This perspective does color his prose a little -- for example, he seems to view most broker/dealers as barely better than swindlers, and has nothing good to say about most annuities and life insurance products -- but it makes for authentic advice. It can also make you feel bad if you've fallen for one of the bad ideas; but at least he probably would blame the dealer and not you. The other thing I noticed reading it cover to cover is that it can get repetitive (there is lots of hammering on the evils of consumer debt, for example) -- but that is partly by design so that you don't have to read it all the way through. The book is organized such that you can flip to any chapter dealing with whatever question you have, and he'll cross-reference with other parts of the book as needed. Happily, the table of contents is highly detailed as well, so that you can easily see which chapters might benefit you.

The best praise I can give this book is, "Boy, I wish I'd read this when I was in college!" I am grateful that my parents instilled in me such good money habits (for example, I've never [intentionally] carried a credit card balance), so I avoided most of the serious mistakes he rails against, but I would've felt so much more prepared and in control of my finances if I had read this before starting my career, and I would've improved some of my mediocre financial choices.

Key points that stood out to me:

- Our economy may run on consumption, but from a *personal* finance standpoint (which is, after all, the topic of the book), consumer debt (i.e., "bad debt," which was used to acquire something that won't appreciate in value) is always bad news. This includes carrying a credit card balance and taking out a loan for a car. [I am guilty of the latter because of attractive interest rates, but it's still non-appreciating property.] It is impossible to read this book and escape this point.

- All mutual funds and almost all insurance and annuity products can be found in no-load (commission-free) varieties. Commissions on mutual funds can be as high as 5% of your share purchase price; commissions on annuities may be as high as 100% of the first annual premium! You pay these commissions, either directly or in the form of lower performance or higher fees, as compared to the no-load varieties.

- The best way to hire a money manager, for all but the very richest among us (i.e., the 1%, and if you're in the 1% you're probably not reading this book), is to buy low-cost actively managed funds. The best money managers only work with enormously large balances, which you probably don't have. Both this book and Pound Foolish sing the praises of the Vanguard Group (www.vanguard.com) in providing low-cost, no-load funds, both indexed and actively managed.

- There's no such thing as free advice. Any free advice is always trying to sell you something. That may be selling you on their funds, or on the idea that day trading is a good idea because they make commissions on your trades, or directly selling you products for which they earn a commission even if other products might have better returns or be better for your strategy.

Incidentally, I find it curious that some reviewers gave the book a lower rating because "most of the book didn't apply to me." The best time to read advice, or at least know that such advice exists, is before you need it! Then you'll remember the advice (or at least remember to look it up) when the situation comes upon you. But I have also been told that unlike me, most 20-somethings aren't highly focused on long-term goals and planning for retirement. ;)

If you want this advice in shorter form, written to target a younger and hipper generation, look for Financially Fearless: The LearnVest Program for Taking Control of Your Money. Yes, she is also trying to sell you something (namely the LearnVest money management program), but I personally didn't feel like her company got in the way of her advice (which is not free, because somebody paid for the book :) ). Now that I've read both books, I don't see any conflict of interest in Financially Fearless; but I am older and stodgier than she is, so I needed more advice about things like child care expenses and saving for college.

[Mario Ascencio · Rating 5 out of 5]

This book helped me when I first started out in my career. I had no clue what IRA, IRA-Roth were, CDs, Mutual Funds, etc. This book really helped me.

[Dina · Rating 2 out of 5]

I give this book only 2 stars because most of it doesn't apply to be. I'm not a homeowner and so don't need advice on mortgages, I'm in no financial position to play the stock market, etc. For a mid-twenty-something, the useful information I gleaned from this book could just as easily come from Wikipedia or better yet, my dad! Not to mention making any sort of investment right now (CD, bond, long term savings plan) has such little pay off it's almost not worth it to think about. Maybe when I'm ready to settle down this book will be useful, but as someone just scraping by, there's only so much you can do.

[Lily Evangeline]

WE'RE going to put this one on hold.

Realizing it doesn't make a ton of sense to read in depth about investing, when I'm literally not going to be making any money for the next four years??? I'll forget it all anyway.

Making a solemn promise to return. to RETURN. At this point I've got at least the basics... or something.

[Sam · Rating 3 out of 5]

Thankful to have picked this book as my first read as I begin my personal finance journey (😭). As someone who prefers not to be all business-y and invest-y, this was perfect. It was exactly what I needed to get a grasp of the basics.

3 stars because… well… finance. But it was exactly what I needed.

[Leonardo Jr · Rating 5 out of 5]

Thank you for REMINDING AND HITTING me on the head! A VERY GOOD BOOK! three thumbs up!!!

"Another problem with seeking to amass wealth is that tomorrow might not come. Even if all goes acccording to plan, will you know how to be happy when you're not working if you spend your entire life making money? More importantly, who will be around to share your leisure time? One of the costs of an intense career is time spent away from friends and family. You may indeed realize your goal of retiring early, but you mabe putting off too much living today in expectation of living tomorrow....Making and saving money is like eating food....The right amount, perhaps with some extra to spare, affords you a healthy, balanced peaceful existence. Money should be treated with respect and acknowledged for what it is - A MEANS TO AND END..."

"...please consider your HIGHER LIFE GOALS AND PURPOSES. What are your non-financial priorities (family, friends, causes) and how can you best accomplish those with the financial resources you do have?"

[Niki Jona · Rating 5 out of 5]

Informative!

[Christine · Rating 5 out of 5]

Educating myself on personal finances has been a big goal of mine these past 6 or so months. The good news, is that I know more than I think I do and already have some pretty good practices in place. There was definitely some new solid advice that I will be following, but even the stuff I already know about was just good to read for my own confidence. You don’t have to be a genius or devote hours and hours of research to be in good financial standing.

I wish I had read this book at least 10 years earlier, but really it’s never too late for this kind of stuff. I think the other surprising thing through all of this is that just educating myself alone has made me more exited about saving and investing money. I am so much better about thinking on it before I make an impulse purchase that I don’t really need. A year ago I would have bought a designer handbag with my work bonus, now it goes towards retirement savings!

I know it’s kind of easy to make fun of these “For Dummies” books, but Tyson did a really good job of simplifying the content and recommending good next steps. If you don’t want to read it (I don’t necessarily blame you), I’d love to share some of the things I learned. Financial independence is so important.

[Stephen Rose · Rating 5 out of 5]

I picked up this book as an intro for our homeschool curriculum and was not disappointed. Like many of the “for dummies” books, it is written in an engaging and non-dry narrative.

It contains a good examination of personal predispositions to money and financial habits, as well as covering Investments, banking terms, money vs metals vs digital currency. I found that it has good advice on cutting cost day to day, and includes some historical looks at laws that have set rates and practices. It also explains financial services, investment meanings and uses, while also being transparent of the motivations for the planners and managers, and motivations behind finance ads and apps.

⚠️Parental Warnings ⚠️
None

[Truls Ljungström · Rating 3 out of 5]

En enkel bok i personekonomi. Det allra mesta var självklarheter, men självklarheter uttryckta på ett nytt och enkelt sätt. För oss ickeamerikaner: varning - en hel del av boken handlar om det amerikanska skatte- och försäkringssystemet.

[Eduardo Rosas · Rating 5 out of 5]

friendly, detailed, must-read for US residents.
somewhat useful for everyone else.

[Austin · Rating 5 out of 5]

Wish I’d read that when I was 18. What a tremendously helpful reference tool that demystifies countless aspects of financial literacy. Highly recommend and will likely gift in the future.

[Kevin Luo · Rating 5 out of 5]

This is a comprehensive and powerful book for an overview for personal finance. This was the first book I have read from the "for Dummies" series and was intrigued by this book based on my interest in personal finance. As a disclaimer, this book is much like a textbook and I think that it is more for referencing various topics, rather than reading through like I did. This book begins with basics, such as budgeting and credit cards before delving into more complex subjects such as investing within tax-deferred accounts, college planning, and insurance. In my opinion, the second half of this book is far more challenging to understand for a finance neophyte such as myself. While I have done considerable self-education, I still think that many of the concepts in the second half were more difficult to understand. I will say that the most valuable portion of this book was likely insurance and speaking about the various types and necessity. However, that was also the most dry portion of the book. Most personal finance may cover insurance, but I think that most people, including myself, glaze over at the concept, leading it to be under-appreciated and under-learned. I think any of the more complex topics (eg. real estate investing, college payments, insurance) could have been a whole book or course within itself, so I do think that the author did a strong job for these very large subjects. Smaller and simpler topics such as budgeting and credit cards were covered adequately. The one criticism or critique I would have when it comes to this book would be when it comes to career planning, as this book does not mention that. Of course, that could be interpreted and spoken about at length, but I think prudent career planning is a driver to be able to use all of these concepts and that one's income is likely the most valuable asset over a working lifetime. Therefore, there should be some talk about it. Last notes are that Tyson is very objective, which is wonderful in an industry that is fraught with misinformation and salesman and honest about certain situations (eg. avoiding a consumer lifestyle, etc.) Overall, a strong book and a good recommendation for all ages.

[Tiler Widdowson · Rating 4 out of 5]

Good information, definitely need to go back to it as your doing the actions it gives information on.

[Ellen · Rating 3 out of 5]

this book is very well-written. Very accessible by the layman or laywoman. I have read a few financial texts in my life and have invested in mutual funds and 401Ks for a while, so I am not a complete novice, but this was a good refresher on the differences between investing in stocks and bonds, the difference between taxable and non-taxable securities, what you should/should not invest in through a 401K compared to what you should/should not invest in through a directly purchased investment such as a mutual stock fond or mutual bond fond. He promotes purchasing funds rather than stocks or bonds directly because you get experienced management with your investment.

His approach is very sensible. He tells you what kind of insurance you need and what not to waste your money. He distinguishes between catastrophic insurance and insuring for possibilities that would not be catastrophic. For example, losing your ability to earn money when you have dependents is catastrophic. Having a fender bender that costs $500 is not. YOu can probably afford a deductible of $500 for your car insurance and you will spend a lot less every year in insurance (plus look at how much decreasing that deductiblew to $250 every year will cost you -- you might be amazed at how little sense it makes for you to carry that each year).

There are several chapters I did not read because they do not apply to me, so I cannot speak to them. These are chapters on saving for a child's education, buying life insurance (we have always had life insurance from our employers), and buying real estate.

[John · Rating 4 out of 5]

This book is structured to educate in three primary areas: saving and managing money, investing & insurance. It also provides basic instruction on key financial concepts and concerns for individuals. Also provided are recommendations of decent companies to explore and guidance on protecting your assets and further educating yourself.

Having read Dave Ramsey's Total Money Makeover and other financial guidebooks, I feel that this book is a sound and less dramatic guide. Ramsey has a very focused and defined message; Tyson in this book keeps the conversation open and discusses options. I like that Tyson's approach is not as condemning of certain choices (credit cards - which he doesn't condone - are still discussed in a way applicable those who appreciate the benefits).

Overall, this was a good book with a lot broader discussion than most financial advice books. The parts on investment and insurance are especially educational. I appreciate the way these sections discuss topics that most books and people think should already be known by the reader. It is clear that the point of the book is education; and Tyson does a good job with that.

If you are reading this in terms of tax factors and other time specific elements, I do recommend getting access to the most recent edition. Tyson has kept information and Tables updated to give the most accurate numbers available.

[John Michael Strubhart · Rating 5 out of 5]

Now, before you let the 5-star rating cause you to jump up and buy this book, read the review first. The For Dummies series is an excellent way to learn things. Financial planning is a subject that requires an almost daily update of your knowledge base. There are some fundaments of the subject that are outstandingly covered in this book and if you get it for that reason alone, you'll be doing well, but if you want to keep current, you really need a reliable website. Fortunately, the book includes a link to the For Dummies website that appears to be quite current, so what I'd do is get the latest (not this) edition of the book and frequent the website. Use to teach your kids, for the love of Mike! Goodness knows they don't get the essential advice given in this book in our schools private or public (and I support public schools). The style of presentation is conversation and quite enjoyable to read. Just be sure to keep current if you're going to follow the advice that the book gives you. With that, I wish you a very happy personal finance!

[Mark · Rating 5 out of 5]

"For someone who has their personal finances in order, this will be a boring and basic book. For someone who is just figuring out how to manage their finances, this is a great book. I read this book when I was feeling weighed down by our finances and debt. This book helped me think systematically about what we were doing with our finances, helped refine a plan to retire all our debt, and convinced me the need to save and invest for the future. Since I read this book, I have read a number of other books about personal finance and investing. While several of these books gave me a deeper understanding of the topics, not have contradicted what I learned in this book. Personal Finance for Dummies has all the advice I would hope a parent would pass onto their children about money. Unfortunately, a lot of parents don't know many of the things found in this book or don't think to teach their children how to effectively manage their money."

[Julie Kwiat · Rating 3 out of 5]

For someone who has their personal finances in order, this will be a boring and basic book. For someone who is just figuring out how to manage their finances, this is a great book. I read this book when I was feeling like I should get to prepare for my future personal finances and possible debt. This book helped me think systematically about what I should be doing with my finances and convinced me the need to save and invest for the future. I never thought I'd be so absorbed by a book like this but when you're in that weird transitional state between student and independent adult, a book like this can feel empowering. I can't believe this stuff isn't required education for public schools or even expensive colleges.This book also includes a lot of valid personal advice. Don't become obsessed with building wealth, personal relationships can be more valuable than anything.

[Liam · Rating 3 out of 5]

This contained some good informative stuff. I didn’t quite finish it because I experienced it as an audiobook - and just couldn’t digest all the little details - let alone incorporate them in to life based on the audio alone. I had to throw in the towel at about the 80% mark.

This may be a good resource to go through as a paperback with a pencil & notebook however.

My only other issues with it were: (1) that it was pretty dated as a financial resource. It’s been 15 years since this was published. And since the author gives detailed information about web pages and other current information at the time, it’s long due for an update. And (2) that it was VERY abridged. I suppose that this makes sense for an audiobook - especially a financial audiobook. But with a run time of only about 3 hours, it seemed like too substantial of an abridgment for me.

[Dave · Rating 4 out of 5]

Personal Finance for Dummies is clearly written and gives a good overview of all the basics. It has very broad coverage - everything from budgeting to investments to mortgages to wills. This is useful if you need to learn about or do multiple things at once.

I admit I was embarrassed to check out a "Dummies" book - even though I read it on my phone where no one would see the cover! However, this was a high quality read. It has many good tips and helped me build a thorough understanding. I have a better grasp on several topics (investments, mutual funds) and can now see where I need to learn more (wills, estates).

Highly recommended to help you build a solid understanding. If you're new to budgeting read Chapter 6 on reducing your spending to get a head start!

[Dania · Rating 2 out of 5]

The investing parts of this book were not very good. The information was very outdated and did not discuss TFSAs properly. I think if you're interested in investing, just read "The Millionaire Teacher".

However, obviously this book was meant as a sort of encompassing resource for personal finance. If you are a complete novice and beginner who needs someone to tell you brands aren't worth the money - this will provide you with a ton of helpful information. If you're not - well it's pretty long so there'll be some content for you too. Still, I wish this had been condensed more. It was a bit of pain to read since a lot of the material I already knew.

[Ricky Bosso · Rating 4 out of 5]

Yup, it’s a book.

Edit:

Actually, it’s a very good book for anybody learning about personal finance and investing for the first time, even if the book itself isn’t super exciting. Quite frankly, that’s the way personal finance should be. It’s not about flash, excitement, or hype. How you live with your money is serious business, something that anybody in their early twenties should learn more about NOW.

There are plenty of other books on personal finance and investing that should likewise be suitable, but Personal Finance for Dummies is comprehensive enough to point anybody in the right direction.

[George Nageh · Rating 4 out of 5]

Everyone should read at least one book about personal finance in their early twenties.
This book will walk you step by step toward dealing with money, you'll get familiar with
Earning
Spending
Budgeting
Saving
Investing
Insurance
Retirment
And setting life long financial goals
This book will answer important questions which most of us don't even bother asking but can turn our lives upside down
Planning your personal finance properly is a necessary skill that will benefit you alot and you'll finish this book with a different ideaology about personal finance

[Andrew · Rating 4 out of 5]

This is a good financial planning read with specific tips and resources throughout. I appreciate Eric Tyson’s balanced tone throughout, no hyping one thing or fear-mongering about another; though, it can be a somewhat boring read too - which is probably why I half read, half skimmed this book.

I’ve been wanting to make sure we’re on a good path financially and this helped me evaluate what I’ve done so far and whether I need to correct or anticipate something new I hadn’t thought about. Recommended as a map to what comes with financial planning in the States.

[Jonathan H. MONTES · Rating 5 out of 5]

If you are looking for information, you got it here. This thick book covers everything you need to handle personal finance. I mean everything.

I enjoyed learning new material and researching the things I couldn’t understand. I’m not saying the concepts are difficult to acquire at all. There are just some that are completely foreign to me and research was needed.

I highly recommend this to everyone

[Katelyn Jenkins · Rating 5 out of 5]

This is going to help me a LOT as a freelancer to determine my annual needs. It also teaches a bushel about investing, retirement accounts, debt, mortgages, and other day to day in an outs to help its reader save money, time, hassel, and INSTEAD build a life worth dreaming about - all in a charming stylistic text. Loved it. Highly recommended :)

[Powell Omondi · Rating 5 out of 5]

Amazing illustration on major issues to deal with personal finance, on how to start investing and he gives a practical advice on how to go about the whole issue on personal finance. A good worth reading