The 80 to 20 Money Rule

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If you've been following my blog lately, you'd notice that I like talking about money, infact it's the only thing on my mind right now I must confess.

The reason why I'm on this path is because I realize that 90 percent of all my problems are financial problems so I'm doing everything in my power to become a wealthy man. Reading books on wealth, follow wealthy people's advice and taking action on the wisdom I get from all this.

I learned something this morning and I'll share it with you.

We know that managing money sounds like am easy thing but it's very tricky when you actually try to do it. Life is usually unpredictable and it takes a lot of discipline and wisdom to manage the little that comes into our hands when we work.

There's a rule they call the 80-20 rule and I believe it helps make it simpler. This principle tells us that 80% of our results come from just 20% of our efforts. When I first read this new rule, it sounded a bit confusing but I get it now. In finance, focusing on a few key habits can lead to the most of our success.

When I first started budgeting because I was taught by a rich man to do so, I honestly didn’t see its value in my life. I thought it was too strict and boring. Because of the budget I couldn't buy some of the things I wanted to which I had the money for anyways.

I had to discipline myself to safe and it was a bitter experience at the start because I wasn't used to that kind of financial lifestyle at all.

But after a few months, I noticed my savings grow. I checked my mobile wallet and saw money I have never had at a single point in my life.

By carefully tracking my spending, I saw where I wasted money. I'll give you a good guess, snacks. Lot's and lots of snacks. During work time I would break and buy some snacks I didn't need. Also, cheap jeweleries took a great portion of my money.

What I did was to cut back on eating out, buying unnecessary snacks and started saving to invest.

I owed some money to a friend which I didn't pay and my friend wasn't looking too concerned but I decided I was going to pay off that debt because I don't want to have a life of debt.

I noticed that setting clear financial goals gave me direction and helped me stay disciplined. It's very true that having a vision brings discipline to people automatically.

It didn't take too much to change my financial status, just by focusing on essential habits like budgeting, tracking spending and paying off debt, my life improved. What I'm trying to say is that simple changes can lead to big results.