We often hear 80-20 rule when it comes to savings, and a lot of 'experts' in the field confer to it. However, in this article, we'll try to understand if 80-20 really works for you . What is the 80-20 savings rule? As a refresher, this rule or principle tells us that once we receive any particular inflow (i.e. salary or business income), we immediately carve out the 20% and keep it in your savings account. This way, you are forced to spend only 80% for your needs (even wants). To whom does the 80-20 savings rule apply? The 80-20 savings rule only works for those with excesses which we define as the surplus from income once you take out your non-discretionary expenses . In here, we define non-discretionary expenses as your strict needs , spending that you cannot or very difficult to avoid within a short time frame. Examples include utility bills, rent, tuition fees and etc. Hence, you may want to analyze your expenses first and identify which are discretionary (commonly