Aug 10 • Mindset & Discipline
Psychological Rules of Money – Master List
The money game is mostly mental. These are the unwritten laws that control how people spend, save, and go broke.
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Rule 1 – Parkinson’s Law
“Expenses rise to meet income.”
• The more you make, the more you’ll “justify” spending.
• Raises feel good for 30 days before you’re right back to broke.
• Solution: Lock in your lifestyle. Bank the raise, don’t live the raise.
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Rule 2 – The Payday Effect
“When the money hits, it burns a hole in your pocket.”
• People with nothing will spend everything right after they get paid — rent, bills… and random crap.
• This is why most are broke by week two.
• Solution: Automate savings before touching a dime.
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Rule 3 – The Law of Diminishing Returns
“More money, less joy… if you’re buying the wrong stuff.”
• The first $100 on food feels great when you’re hungry. The 10th dinner out is just calories.
• Solution: Spend on assets, experiences, and freedom — not just more stuff.
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Rule 4 – The Law of Holes
“If you’re in a hole, stop digging.”
• Borrowing to pay debt or flex makes the hole deeper.
• Solution: Pause spending until you’re climbing out, not sinking in.
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Rule 5 – Triviality Law (Bikeshedding)
“People obsess over pennies and ignore the big dollars.”
• You’ll argue for hours over a $10 bill but ignore the $500 car payment bleeding you every month.
• Solution: Attack the big leaks first.
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Rule 6 – Murphy’s Law (Financial Edition)
“If it can go wrong, it will — and it’ll cost more.”
• Emergencies always hit at the worst time.
• Solution: Keep an “oh sh*t fund” — at least $1,000 you don’t touch.
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Rule 7 – The 80/20 Rule (Pareto Principle)
“Most results come from a small number of moves.”
• 80% of your financial wins come from 20% of your choices.
• Solution: Master the big plays — income skills, major expenses, investments.
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Rule 8 – The Law of Friction
“The easier it is to spend, the more you will.”
• Credit cards, Apple Pay, “Buy Now” buttons make it painless — until the bill comes.
• Solution: Put speed bumps in front of your spending.
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Rule 9 – The Law of Unintended Consequences
“Every money move has side effects.”
• Upgrade the car → higher insurance, more repairs, less savings.
• Solution: Think two moves ahead before buying.
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Rule 10 – The Scarcity Flip
“Broke minds think short-term.”
• When you have little, you spend to feel good now — not to be free later.
• Solution: Break the cycle. Play the long game even when it hurts.
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Psychological Rules of Money – Master List
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