80/20 Budget Rule: Calculator, How To, & Google Sheets Resource

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.

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.

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.

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.

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!

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