The Pareto Principle is also known as the 80/20 rule. You might see this explained different ways, but basically it means that a large portion of the results or problems are generated by a small portion of the effort or people.

What this means from a money perspective is that there are probably one or two areas that, if you focused on them, would make the biggest impact on your financial life.

Identifying those one or two areas, and then focusing your effort there, could really pay off.

If you’re not sure which areas those would be for you, start by spending some time taking notes. As you move through your daily life, when something money-related annoys you or causes you problems, write it down.

Chances are you’ll see a pattern emerge.

If I had done this years ago, my list would have looked something like this:

• Got an overdraft
• Ugh, another thing wasn’t entered into Quicken!
• What the heck did I/he buy?
• Oh no, this letter’s from the bank. I hope it isn’t another overdraft. Oh good, it’s just a statement. I’ll have to look at that sometime.
• The car broke down. How are we ever going to pay for that?

Do you see any common themes in those complaints?

Two pop out at me: a lack of planning and a failure to pay attention.

So focusing my efforts on planning ahead (preparing for eventualities and emergencies) and actually paying attention to my money would probably net me the greatest results.

And in fact, doing so has made a world of difference. Probably…80% of the difference, if I had to guess.