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The 3 Laws of Money Management 
The 3 Laws of Money Management 
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Money Management

The 3 Laws of Money Management 

Farah Nurow
July 7, 2023

To manage your money properly and achieve your goals, you need to have laws governing your financial habits. These principles can guide your every financial move and ensure you have a disciplined approach to managing your finances and working towards your objectives.

To reach that fit, you need to get the fundamentals right. And that requires learning the three money management skills that will enable you to build a solid financial foundation for a prosperous future by ensuring you:

  • Save a portion of your income and build a safety net for unexpected expenses, and you can work towards your long-term goals.
  • Maintain a clean and orderly finance that provides a sense of security, allows you to track your finances, and ensures you make informed decisions about your money.
  • Practice self-control and regularly consider the long-term by helping you curb bad spending habits today.

To incorporate these skills into your financial life, you need to adopt the three important money management laws: The 10% law to improve your savings, the law of organisation to declutter your finances, and the law of enjoying the wait by postponing instant gratifications.

This article explores those three laws in detail.

Read Also: 9 Money Rules You Should Live By

The 10% Saving Law

The 10% saving law involves taking 10% of every money you earn or receive and putting it away for future use. You can direct the funds to a bank savings account, Sacco, MMF, or your preferred saving vehicle. The law requires that you do this immediately and budget for the remaining 90% afterward.

The 10% saving rule is meant to help you develop a saving habit by allowing you to build your coffers gradually by making small, regular savings deposits. It also ensures you learn to live below your means and curb money wastage while planning for the future. 

The 10% saving law requires that you save 10% on any amount of money you earn, starting with your salary. For example, if you make Ksh70,000, you should strive to save Ksh7,000 monthly. And if you get a monthly bonus from your employer or a tip from a client of Ksh5,000, you should immediately save 10% of it (Ksh500) before you plan on how to use the remaining Ksh4,500.

So what’s next once you have gotten into the habit of saving 10%? Depending on your financial situation, you can raise the percentage as your income increases or lower your expenses to save more. After saving enough money, you can start exploring ways to grow your savings by investing and buying assets. 

Read Also: The 9 Most Important Reasons to Save Money

The Law of Organized Finances 

How many savings accounts do you have? How much money is in each account? Who owes you money? How much do they each owe you? How many investments do you have? How are they doing? Where are all your vital financial documents stored? If you don’t know the answers to those questions, or it could take time to answer them, you need to adopt the law of organized finances.

According to the Law of organized finances, you should always have a clear picture of what is where and update it regularly. 

You should have a system to track all your incomes, savings, investments, debts, and all other aspects of your finances. You can do this by keeping a notebook to record all your important financial information or a spreadsheet on your computer/phone. It shouldn't stop there once you have set up such a system. You should frequently revisit it, update it, and use it to track the progress of your finances.

The main benefit of following this law is you will be able to gain financial awareness and know whether you are growing financially. This awareness will let you make informed decisions about your finances, and when you are behind your goals, you can identify improvement areas.

Other benefits of following this law include the following:

  1. Avoiding penalties: Keeping track of loans and bills payment due dates and making timely payments ensures you avoid unnecessary fees.
  2. Organised finances allow you to stick to a budget as you can allocate funds efficiently and avoid overspending.
  3. It ensures that money and financial documents are not misplaced.

Read Also: Tracking Finances: Top Tools to Advance Your Life Goals

Delayed Gratifications: The Law of Waiting 

Delayed gratification refers to the ability to resist the push to get an available, immediate reward to get a valuable reward later. 

The law of waiting requires that you resist the urge to take instant returns by exercising self-control for potentially greater financial returns in the future. When you practice this law, you will be able to delay gratifications which can have positive effects on your finances by ensuring you avoid the following: 

  1. Buying items you don’t need which leads to wasteful spending
  2. Paying premium prices because you didn’t take time to compare sellers
  3. Making semi-conscious purchases driven by impulsive shopping desires
  4. Improperly timed selling of assets and liquidating investments without considering the optimal timing for maximum returns
  5. Debt as a result of buying on credit when it's not necessary, resulting in unnecessary debt accumulation

Delayed gratifications can help you learn self-control. You can make wise spending decisions and prioritise saving and future goals. 

Read Also: Delaying Gratification: Why Waiting a Little Longer Pays More


When seeking financial freedom, your need to ensure every aspect of your finances is handled well, you’re saving, you’re not overspending, and you can live comfortably while planning for the future. However, this doesn't happen overnight, and you must take measures and adopt principles that can help you improve your finances.

Learning practical financial skills is critical to leading a healthy lifestyle that brings security and removes the stress of worrying about money. If you are just getting started with money management, the three laws discussed above can help you develop a strong foundation by helping you learn how to save, keep track of your finances, and control your spending.

The most crucial step in managing their personal finances is to educate yourself. You can build a secure financial future and avoid financial pitfalls by grasping the fundamental laws required to handle personal finances, such as budgeting, tracking spending, and organising your finances. 

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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