The Not So Simple Side of Money Management

“True wisdom comes to each of us when we realise how little we understand about life, ourselves and the world around us.” – Socrates

You only have to take a stroll through any bookstore to get an idea of just how many different books there are related to all aspects of finances. It can be overwhelming but at the end of the day the core advice boils down to much the same thing:

It really is that simple but for so many of us, sticking to those three principles, is harder than astrophysics! It’s not that money management is hard; it’s that it’s a mind game. Our psychology, emotions and habits all play a major role in determining how committed we are to handling our money well and if we’re not fully committed to making our financial goals a reality, the chances are good that we won’t achieve them.

Last week I shared five of the books that had impacted my financial life and this week I want to add four more to the list. These books are a little different from the ones I shared last week because they don’t directly outline how you should handle your money. Instead they present a different way of considering the world we live in and the life we're creating and challenge us to ask if we could be doing better. The reason I have these books on my top 10 list is because money management is so much more than simply tracking dollars and cents and it’s amazing what you can accomplish when your habits and beliefs are in line to support rather than hinder your goals.

The Power of Habit – Charles Duhigg

Habits are powerful things and one of the most powerful things about them is the fact that they’re often rooted so deeply in our subconscious that we’re not even aware of what drives them. Duhigg explores how habits are formed using a variety of real life stories and scientific research and explains how we can redefine our “habit loops” in order to gain the same reward from a different, more positive, action and so increase our success.

Your Brain and Your Money – Jason Zweig

I love learning more about how the brain works and what makes us tick. In this book Zweig investigates the emerging science of neuroeconomics (a combination of neuroscience, psychology and economics) and uncovers a surprising number of reasons why smart people make financial decisions that are not so smart. Understanding that it’s the anticipation of pleasure, rather than pleasure itself that gets our brain in a spin, made it an awful lot easier for me to walk away from all those tempting deals at the mall!

The Ten Percent Solution – Marc Allen

This book wraps a powerful message in an easy to read tale and paints a picture of a different way of handling money, outlining the kind of world we could live in if more people were committed to sharing their wealth rather than splurging it. It reminds me of Mark Victor Hansen’s strategy of giving 10%, saving 10% and investing 10% of every paycheque and then living on the remainder. It’s a book that makes you feel that it’s possible for you to significantly impact the world regardless of how much money you make.

The Four Agreements – Miguel Ruiz

This is most definitely not a money management book but the reason it’s on my list is because it challenges the reader to examine those beliefs that have been instilled in them by family and society and question whether they add value or detract from their life. So much of the way we handle our finances is rooted in everything we’ve ever heard, seen and experienced in relation to money. Sometimes being challenged to look more closely at those beliefs and consider whether they’re really helping us reach our goals is exactly what we need to take us one step closer to success. Ruiz challenges us to do exactly that in every aspect of our lives and encourages us to simplify our approach to life (and boost our happiness quotient) through consistently living just four key “agreements”.

As I’ve said before, I love to read. Three goals that appear consistently on my monthly goals list are “read a fiction book”, “read a non-fiction book” and “listen to an audiobook” and I’m always looking to expand my horizons and my understanding of myself and the world around me. If you have suggestions for books I should add to my reading list over the next few months, I’d love to hear them!

Written by Sarah Milton

Sarah Milton is currently stretching her professional wings in Edmonton, Alberta in a role that allows her to combine her talent for writing and speaking with her training in the financial services industry. She is passionate about inspiring people to get excited about their money and empowering them to take control of their financial future. You can follow Sarah on Twitter @5arahMilton

3 Responses to The Not So Simple Side of Money Management

  1. Great post! I’ve been thinking a lot lately about how I feel today and I think a lot of it is tied to having really taken control of our finances and given ourselves a purpose with our money. The benefits of being financially aware are really great. Thanks for verbalizing it so perfectly here.

  2. Good article and subject matter Sarah. Four that I am currently reading now are the following:

    Winning the Losers Game by Charles Ellis
    Four Pillars of Investing by William Bernstein
    The Quest for Alpha by Larry Swedroe
    Pioneering Portfolio Management by David Swenson

    and for those who like to read the analytics of financial reports you can read the Berkshire Hathaway Annual Reports.

    Have yourself a wonderful Easter Sunday to you and all your readers.

  3. Good post Sarah. I have read or am currently reading the following 4 books which I think your readers might find worthwhile.

    Winning the Losers Game by Charles Ellis

    The Four Pillars of Investing by William Bernstein

    The Quest for Alpha by Larry Swedroe

    Pioneering Portfolio Management by David Swenson

    Hope you have yourself a wonderful Easter Sunday and to your readers as well.

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