80/20 Budget Calculator

Use this 80/20 budget calculator to divide your monthly income using the 80/20 rule of budgeting.

80/20 Budget Calculator

Expense Amount (80%):

Savings Amount (20%):

What is a 80/20 Budget Calculator?

80/20 budget calculator is an online financial calculator which helps you to divide your monthly income using the 80/20 rule of budgeting. In this 80/20 budget, 80% of your income goes towards your monthly expenses and spendings, and 20% on savings. This is a very fruitful way to save money.

For example, Suppose your monthly income is $2500/Month. Then, using this 80/20 budgeting rule, you have $2000 (80% of $2500) for monthly expenses and $500 (20% of $2500) for savings.

What is the 80/20 Rule?

The 80/20 rule which is also known as ‘Pareto Principle’ states that 80% of your result generates from 20% of your work. This principle was developed by an Italian economist ‘Vilfredo Pareto’. He stated that “80% of consequences comes from 20% of causes“.

Since then, this pareto principle can be seen in many aspects of life. From productivity to finance, this rule applies to many fields.

How to Use the 80/20 Budget Calculator?

  1. Visit the 80/20 Budget Calculator page
  2. Enter your monthly income in the first input field
  3. Click on the ‘Calculate’ button to divide your monthly salary using the pareto principle
  4. The 80% (expenses) and 20% (savings) amount is shown to you in the output fields
  5. You can also use the ‘Reset’ button to reset the calculator

Use Cases of 80/20 Rule

  • Business – In many businesses, majority of their revenue is generated from their small number of products. For example, in a cafe majority of their revenue comes from mainly a small portion of their products (mainly coffee and cakes).
  • Investment – Many investors finds that their 20% of their holdings is responsible for their 80% of the portfolio growth.
  • Workspace – In our day to day life, the 20% of the deep work which we do in our office is responsible for the 80% of the outcomes.

References

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