Anybody studying economics, business, or many other areas has heard of The Pareto Principle: the law that states that 80% of results come from 20% of effort. It is a common rule used in businesses to express that 80% of business will come from 20% of clients, and 80% of clients will come from 20% of marketing effort, and so on.
While not necessarily and inherently accurate, it can be used in a variety of situations to some degree of truth and honesty. One such situation is that of a very important sector in personal finance: saving money.
If 80% of your savings will come from 20% of what you do to save, then it is important to identify the 20% and do more of it, while discontinuing ineffective areas.
