Do you really know? How can I use the 80/20 method to save money?
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Nov 10, 2025 Discover the simplicity of the 80/20 method for saving money! This approach divides your income into 20% for savings and 80% for spending, making budgeting hassle-free. Learn how it works, from funding emergency savings to managing daily expenses. Ideal for those who detest tracking every purchase, this method offers a flexible way to grow wealth. However, be aware of its drawbacks, like potentially overlooking changes in income or expenses. Tune in for practical tips on implementing this straightforward strategy!
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Automate 20% To Save First
- Multiply your take-home pay by 0.2 and automate transfers to savings or investments on payday.
- Use the remaining 80% freely but avoid exceeding that limit to keep the rule effective.
Prioritise Emergency Fund First
- Direct the first 20% toward investments, savings, or debt repayments, starting with a 3–6 month emergency fund.
- Set up automatic transfers so you won't forget or be tempted to spend it.
Low-Tracking Budgets Build Momentum
- The 80-20 method suits people who dislike tracking spending or strict budgets.
- It builds momentum by showing savings grow without demanding detailed planning.