The 80 20 Rule – What’s Your 20?

Friends, today I want to discuss a rule that may very well change how you view your time and time management. It is commonly referred to as the 80 20 rule or 80/20 rule.

The 80/20 rule is a very effective way of understanding how to make more money in your life, and how to better manage your time. In it’s simplest form, the 80 20 rule states that 20% of your actions will yield 80% of your results. That means that if you have 5 tasks to do, 1 of them will produce the majority of the positive results, and the other 4 will only produce a small percentage. To take that idea further, one could also state that a few of the things we do are very important, and the others are only nominally important.

If you can figure out which 20% of your customers are responsible for 80% of your sales, then you can know which customers to work with more closely. If you sell product or services, knowing which 20% are responsible for the majority of profits can help you better understand which products you should market. This is an effective application of the 80 20 rule in business.

The main idea here is to find those 20% items in your life, and focus on those types of things, while minimizing or eliminating the 80% that provide little or no value. Here are 4 things that can help you find your 20:

#1. Budget
Take a very detailed approach to analyzing your budget, whether it is business or personal. Detail where each dollar goes, and see if there are any of those areas where you spend a great deal of money, but don’t necessarily see a lot of value. One example of this can be an entertainment area, such as seeing a movie. I know people that spend $100 a month on movies, yet tell me that most of them are boring. Is that a good way to spend that time and money? Think about it in detail, then decide.

#2. Personal Relationships
This one can be tough. Do you have some relationships that require a great deal of work and effort, yet you find little satisfaction in the relationship? Perhaps it is time to evaluate where you spend your time socially, and find any relationships that are dragging you down. It isn’t worth spending time with people that will only be a weight on your life.

#3. Daily Tasks
Write down the work and personal tasks you complete in a day, and decide which of them are really providing value. Are you spending 3 hours sorting through emails that are trying to sell you health related products that you don’t want? The 80 20 rule definitely applies here. Take steps to eliminate the 80% that is a waste of time. Are you watching television shows that really aren’t all that entertaining? Are you spending time doing things that can be delegated to someone else? Evaluate everything, and see if you are truly spending your time and effort on things that matter, or if they are just part of the daily routine.

#4. Evaluate Your Goals
I have spent considerable time talking about reaching goals, and writing them down. However, have you every really evaluated the list to determine if they are the most effective way to spend your time? Are your particular goals really worth the effort involved? What I mean is this – if you have to spend 30 hours to do something, and the reward is 50 cents, is that worth the time and effort? Couldn’t you spend that same 30 hours to do something that is worth $300, or produces some other valuable, even non-monetary, result? This is another way the 80 20 rule can be applied in daily life, and how you can produce more effective results with a solid time management strategy.

So again, I ask you: What’s your 20?