How to Live the 80/20 Rule for What Matters Most

Why the 80/20 Rule is a Key Principle for Having More Time and Money

The 80/20 rule states that 80% of effects are determined by 20% of their causes. The rule is also known as the Pareto Principle, after the 19th Century Italian economist, Vilfredo Pareto. Pareto noticed that 80% of the peas in his garden came from 20% of the peapods. (Weird thing to notice.) He also showed that about 80% of the land in Italy was owned by 20% of the population.

Man contemplating how he can use the 80/20 rule to achieve 80% of the result with 20% of the input

The Pareto Principle is not a law, like gravity. It’s a rule of thumb. It fits a wide array of phenomena. Consider, for instance, these applications of the rule across a variety of fields:

  • Business: 80% of a company’s profits come from 20% of its customers.
  • Software: 20% of the code has 80% of the errors.
  • Sports: 20% of athletes win 80% of the awards.

Along with concepts like the minimum effective dose and putting more load on the arch, about which I’ve written before, the 80/20 rule is a key principle for efficiency. I try to apply it to many areas of my life, especially as regards the “big two” resources of time and money. Consider the following.

The 80/20 Rule and More Time

You can save a lot of time by looking at your daily activities through the lens of the 80/20 rule. Here are some examples of questions you might ask:

  • Weight-lifting: Which 20% of the lifts I do are responsible for 80% of my strength gains? (Hint: it’s not wrist curls.)
  • Meetings: Can I shorten some of the meetings on my calendar to 20% of their currently-scheduled length and still accomplish 80% of what needs to get done?
  • Netflix Watching: Can I experience 80% of the relaxation and enjoyment that vegging out in front of the TV gets me in 20% of the time?

If life were all about weight-lifting, meetings, or Netflix watching, then it might make sense to put in 100% of the time for 100% of the reward.

But most folks would agree that a balanced life is a higher good. Aiming to realize 80% of the benefit from a wider array of activities in 20% of the time for each of them makes balance possible.

The 80/20 Rule and More Money

You can likewise earn as well as save a lot of money by applying the 80/20 rule to your finances. Questions you might ask yourself in this regard include:

  • Work: What 20% of the activities I undertake at work are responsible for 80% of the impact I make at the company? By focusing more on those activities, you can put yourself in a better position to succeed and to get a raise.
  • Disposable Income: What 20% of transactions account for 80% of my expenditures? Whether it is eating out, clothes shopping, or something else, you could then target that area for greater discipline or thriftiness.
  • Purchases: Rather than paying top dollar for the product with all the bells and whistles, can I pay 20% as much for 80% of the effect? A used Civic will still get you from points A to B same as a Hummer.

The 80/20 Rule and What Matters Most

Now don’t get me wrong. I’m not proposing that you apply the 80/20 rule to every area of your life. You don’t want to aim for an 80% good marriage with 20% of the effort. Some things are worth going 100% in on.

But that is precisely the issue. With limited time and money, how do you go 100% in on what matters most?

The answer is by getting 80% of the result on lesser goods, but doing so in 20% of the time or with 20% of the cost. That restraint on the inessentials garners you the time and money you want for what matters most.

Question: What is an example from your life where you reap 80% of the benefit in 20% of the time? You can leave a comment by clicking here.

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