80/20 Budget

About

The 80/20 budget is a simplified financial plan that allocates a fixed percentage of income towards savings and expenses. It involves setting aside 20% of one's income for savings, debt repayment, or investments, while using the remaining 80% for all other expenses. This method is straightforward and easy to implement, making it ideal for those new to budgeting or preferring a low-maintenance approach. It aligns with the principle of paying oneself first, ensuring that financial goals are prioritized before spending on needs and wants. The 80/20 budget is a variation of more structured methods like the 50/30/20 rule but simplifies by not differentiating between needs and wants within the 80% expense category. It is beneficial for those seeking a flexible budgeting system without the need for detailed expense tracking. While it may not suit everyone, especially those with specific financial goals requiring more aggressive savings, it provides a clear starting point for managing finances effectively.