It is generally said that money is an exception to the law of diminishing marginal utility. However such a conclusion emerges out of a misunderstanding about money and due to confusion between marginal utility and total utility.
Money does not mean a particular want or a commodity. It is a medium of exchange which represents a claim on overall commodities . It has a purchasing powe, therefore used to satisfy wants. Thus uses of money violates the assumption of homogeneity.
It is sometimes said that this law does not apply to money. Since money can command an endless variety of commodities and services. There can be no end to earning of money. The more money a person gets, the more he would like to have.
Therefore, this law is not applicable to money. Therefore money is an exception to the law of diminishing marginal utility.
On the other hand, it is said that money is no exception to this law because every addition to stock of money however welcomes it may be, leads to less pleasure. We do not attach the same importance to it. As a man becomes richer, he becomes careless in spending the money. He spends it on luxuries which obviously yields him less satisfaction than necessaries. When stock of money increases marginal utility derived from the additional stock diminishes. Therefore money is not an exception to the law of diminishing marginal utility.