The study examines the relationship between household livelihood diversification, expenditure patterns, and saving behaviour in Vijayanagara District, Karnataka State. The study is based on both primary and secondary data. Primary data were collected from 400 rural households through a structured questionnaire using simple random sampling. The study analyzed farm and non-farm livelihood activities and their influence on household expenditure and savings. Statistical tools such as percentage analysis, correlation, regression, and ANOVA were used for analysis. The findings reveal that households with diversified livelihoods have higher savings and better financial stability. Diversified households spend more on education, health, and transport, while dependence on food expenditure decreases. A strong positive relationship was found between livelihood diversification and household savings. The regression results show that livelihood diversification significantly influences saving behaviour. The study concludes that livelihood diversification improves the socio-economic condition and financial security of rural households.