The 80/20 budgeting rule is more high-level than some methods and is a good option for those that are financially disciplined, but want to ensure they’re building up a good savings.

What is the 80/20 Budget?

With the 80/20 budgeting rule, your money is divvied up into two different categories, one with 80% and the other with 20%. The premise is simple: you divide your income into two categories, essentials and non-essentials.

  • 80% – Expenses (essentials)
  • 20% – Savings (non-essentials)

The 80 percent portion is reserved for essential, or necessary, expenses. Essentials include things like housing, food, and transportation.


The remaining 20 percent is for non-essential, or optional, expenses. Non-essentials are everything else, including things like entertainment, clothing, and vacations.


This leaves you with some room in your budget for the occasional treat without putting yourself at risk of financial hardship. By prioritizing your essentials, you can ensure that your hard-earned money goes towards the things that will improve your quality of life.

80/20 Budget Calculator

Input your income in the highlighted field to see how the 80/20 budget rule would apply to you! This can be income for any range that you choose: weekly, biweekly, monthly, annual salary, etc.

80/20 Budget Google Sheet

Are you a spreadsheet person? Cool, us too! That’s why we’ve put together this Google Sheet resource for calculating different budgets, including the 80/20 rule.


Make a copy of our spreadsheet and check it out!

80/20 Budget Frequently Asked Questions (FAQs)

If you’re unsure about anything pertaining to the 80/20 budget, check out some of these frequently asked questions.

What is the 80/20 budget?

The 80/20 budget is a simple way to budget your income. You divide your income into two categories: 80% for essential (necessary) expenses and 20% for non-essential (optional) expenses.

How do I know if I'm following the 80/20 budget?

The 80/20 is more loosely structured than many other budgeting percentages, yet still, some people use the 80/20 budget more flexibly than others. You can choose to follow it as strictly as you prefer to give you the most effective results.

What expenses are considered ``essential``?

Essential expenses are those that you need in order to sustain your wellbeing and quality of life. This would include costs like shelter, groceries, transportation, and medical expenses.

What expenses are considered ``non-essential``?

Non-essential expenses are those that are more optional and not required to maintain your physical or mental wellbeing. This would include things like entertainment, dining out, or new gadgets.

Is the 80/20 budget realistic?

The 80/20 budget is realistic if it fits your level of discipline and financial situation. This method is more loosely structured than others, which makes it a good option for those who want less strict guidelines to their budget. We recommend looking into several potential budget methods to figure out what’s most effective for you.

Other Percentage-Based Budgets

50/30/20 Budget Rule

✔️ Best for those with higher expenses or lower income

70/20/10 Budget Rule

✔️ Best for those with higher expenses or lower income

60% Budget Rule

✔️ Best for those with lower fixed expenses