How To Save Money Using The 80/20 Budget!

Updated on October 16th, 2019

The 80/20 budget is a simple way to get in control of your money. This budgeting method keeps things simple by dividing your after-tax income into only two categories: savings and everything else. Every time you get paid, you will set aside 20% for savings and spend the remaining 80% of your money on whatever you like.

This is a variation of the 50/30/20 budget but instead, you don’t have to decide whether you are spending your money on a need versus a want. This is great for people who hate tracking every expense. Simply save 20% and spend the rest.


When using the 80/20 budgeting method, remember that the savings category actually includes more than just your savings. This 20% of your money can go towards growing your savings, paying more than the minimum on your debts, or investing. You’ll have the flexibility to choose exactly what you want to do with this 20% but paying down debts and building an emergency fund is generally recommended before investing outside of your retirement account.

Saving Even More

Now you may be wondering, “what if I want to save more than 20%?” If you’re looking to reach your financial goals faster, the 80/20 budget can easily be adjusted. Let’s say you want to take the challenge of a 70/30 or 60/40 budget, simply increase your savings percentage to 30 or 40 and spend the rest. This will allow you to reach your goals at a much faster rate, so don’t be afraid to challenge yourself!

Key Takeaway

If you like simple budgeting plans and don’t want to deal with separating your needs from wants, the 80/20 budgeting method might be the best option for you.