Suze Orman Says: The First Law of Money

The First Law of Money is to Live below your means but within your needs


This is the second part of the series about Suze Orman’s interview by Karen Davila in ANC’s show Headstart(to read the first post click here).

Now are you ready to know the first law of money? The first law of money says:

Live below your means but within your needs

Some of you might have already read or heard this but I tell you, you haven’t. Probably what you heard or read about is “Live below your means”. Now the additional four words actually makes a lot of difference. But before that we have to tackle first what is “need” and “want”.

Understand and differntiate which are needs nad wants


In basic terms “need” are life essentials that you can’t ignore. An example would be food that we have to eat to be alive; medicine we need to take when we are sick; and a decent house to protect us from the elements. On the other hand “wants” are the non-essential things in life which though makes life easier but can still be forgone or delayed and not have an effect on our ability to live. A good example is having a Rolex watch, an Xbox, or a Gucci bag which would make us look good but we don’t necessarily need to be able to live another day.

The first law of money is saying that in order to save and have a sound financial health we have to live below whatever we earned but not to the point that we are not taking care of our body to live and function correctly. It would be pointless to save much of our earnings and yet we don’t eat the necessary food for us to be able to do our job to earn money. If we do that we would get sick and the more that we won’t be able to work and thus limit our capacity to earn a living what more earn some extra for savings.

Suze said that if your earnings are not even enough to pay for your living expenses then you got to get another job as a source of income. Now in a typical Filipino family it is sad to note that there is only one breadwinner and he or she is sacrificing a lot. If he or she gets sick who would earn for the family to bring food on the table? I guess Pinoys should now start applying our long old tradition of “bayanihan”.

In a family of 4 or 6 at least 2-3 should have a work or any source of income to help the family survive daily expenses and at the same time set aside a few for emergencies. Also it would be nice if those members who cannot be gainfully employed help out be reducing unnecessary “wants” that they are spending for. If electricity bill is to high check what appliances can be switch off to save power. If your kid’s or your bum brother’s playing of Xbox whole day adds up to the power bill they should voluntarily give it up to reduce power.

The key here is to delay gratification.

Learn to be financially free from the principles in this book Kontento ka na ba sa KaPERAHAN mo?


There are wants that the family can’t afford today but if only every member helps out one day such “want” could be enjoyed once again if such won’t get big chunk of the family budget. If you remember one post two of our Pinoy authors have published a very good book to address this issue. Authors Vic and Avelyn Garcia’s “Kontento ka na ba sa kaPERAhan mo?” (Are you contented with your money?) teaches two principles, The “Piso Yan Principle” and “Kurot Principle”(you can read all about these two principles by clicking here).

Now it is pointless for you to live like a rat to save. What you could do to have a little money in savings is to live below your means and if you are already living below your means yo got to have another source of income and your family members have to forego unnecessary wants up until the family has enough to treat such wants as only “kurots”.


Gather your family and start making a budget. They got to know how much are you only able to bring to the table and discuss which “needs” to be taken cared of first and which “wants” should be taken out.

Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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