The 20/80 Rule


I used to ridicule people who focussed on small tweaks (eg skim milk instead of full fat) whilst seeming to ignore the big issues (eg they smoke 3 packs a day).

But later I realised momentum is often incremental – we usually need to start small (focus on the 20%) to get confidence to attack the big (ie 80%) activities.

Here’s another example that still gets ridiculed: highlighting the ‘cost’ of buying a coffee each day.

There’s ridicule on both sides, but the point is that saving $5 a day isn’t going to make any meaningful change to most people’s finances. But the small habit will likely start something that will.

There’s a micro behaviour change that starts, and likely progresses to other areas of spend – which will make meaningful change.

The approach isn’t right or wrong, it’s just whether it’s right or wrong for your situation.

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