Your 8-Step Financial Priorities Checklist!
Designed to answer the question: “Where should I be putting my money right now?”
Why Order Matters in Your Financial Journey
If you don’t have order, in your finances or in life in general, then chaos typically sets in.
That’s where the Financial Order of Operations comes in.
Think of it as your personal financial roadmap.
Just like you wouldn’t start building a house without a solid foundation, you shouldn’t be investing in a brokerage account while your credit cards are racking up 20%+ interest or your employer’s 401(k) match is going untouched.
So, what’s the right way to go about this? Let’s dig in!
My Revised Version “Prioritizing long-term retirement savings” in JPMorgan’s Guide to Retirement
Step 1: Establish Your Emergency Reserve
This is your financial “cushion”.
People often neglect this step or think they can get by with a minimal amount of money off to the side.
Before going wild with your investing or paying down debt, it’s incredibly important to establish your emergency reserve.
This is your financial shock absorber—3 to 6 months of living expenses in a high-yield savings account—so when life inevitably happens (and it always does), those curveballs don’t turn into financial crises (aka credit card debt or personal loans).
Step 2: Maximize Employer Retirement Match Contributions
Let’s take our free money people!
Once your emergency reserve is in place, the next priority has to be taking full advantage of any employer match in your retirement plan.
If your employer is offering a 3% or 4% match and you’re not contributing enough to get it, you’re essentially saying “no thanks” to free money and a 100% return on your money.
You absolutely have to contribute enough to max out your match.
Step 3: Eliminate High-Interest Debt
Now it's time to go after high-interest debt!
Credit cards, private student loans, or any debt with interest north of 7 to 8% should be tackled next.
The “guaranteed” return of paying down this debt and foregoing this interest rate often outweighs what you'd earn investing elsewhere in your retirement and other investment accounts.
Step 4: Maximize HSA Contributions
After the essentials and the high-interest risks are handled, the focus shifts to long-term wealth building—and tax efficiency.
This one is often overlooked, but if you already utilize a High-Deductible Health Plan (HDHP), you should consider contributing to a Health Savings Account (HSA), which offers “triple tax” benefits.
If you have the option of an HDHP at work and don’t heavily utilize health care services, a lower-premium, higher-deductible health plan can make a lot of sense. Especially, considering that employers will often contribute to HSAs on your behalf.
No other accounts give you this kind of power..
Deductible contributions
Tax-deferred growth
Tax-free withdrawals for qualified medical expenses
Additionally, once you reach age 65, these accounts function like any other pre-tax retirement account.
If you withdraw money from your HSA for non-medical expenses, the funds will be taxed as ordinary income—just like distributions from an IRA or 401(k).
Step 5: Maximize Employer Retirement Plan Contributions
Once you've captured employer matches, consider maximizing contributions to your workplace retirement plans up to annual limits.
In 2025, participants under the age of 50 may defer up to $23,500 into their 401(k), with catch-up contributions of an additional $7,500 for those over 50.
New this year, participants between the ages of 60-63 may contribute an additional super catch-up contribution of $3,750 for a total of $11,250 ($7,500 + $3,750)
Note:
If your plan allows, you may be able to make additional “after-tax” contributions beyond your employee deferral. See here for more information.
Step 6: Fund Your IRAs
Individual Retirement Accounts (IRAs) are retirement accounts in your name individually, meaning they’re not tied to your employment like a 401(k) or 403(b).
IRA contribution limits in 2025 are $7,000, if under 50, or, $8,000, if over 50.
You can always contribute to a 401(k) AND an IRA.
You are able to establish a Traditional (Pre-tax) IRA and/or a Roth IRA.
However, it’s worth noting that IRAs are subject to income limitations.
Note:
1) To have your Traditional IRA contribution be deductible, you must have AGI below a certain threshold. See here.
2) To make direct Roth IRA contributions, you must have AGI below a certain threshold. See here. You can get around the income limitations with the “Backdoor Roth IRA” strategy.
Assuming you meet the income limitations above, you may contribute to one or both (Traditional and Roth IRA).
The IRA limits are aggregated in a given year, so the combined contributions between all IRAs must not exceed the limits stated above.
Step 7 & 8 Are Somewhat Interchangeable
Step 7: Invest in a Brokerage Account
Once you reach Steps 7 & 8, you have a decision to make.
You can either continue to invest more using a non-retirement investment account (brokerage) or you can begin to pay down lower interest debt.
At the end of the day, it’s a personal decision.
The math for investing or paying down debt is, “Do you think you can invest these dollars and earn a higher return than your debt’s interest rate?”
If the answer is yes, then you invest and profit off of the spread.
If no, then you pay down debt.
For people who prioritize early retirement or financial flexibility, building a bucket of money in a brokerage account is a very good idea.
These accounts have no contribution limits, no penalties for early access and are subject to more favorable tax rates like long-term capital gains rates for investments you sell after holding for more than one year.
Step 8: Pay Down Lower-Interest Loans
Once you’ve checked off all the prior boxes, you may consider paying down “lower” interest debts under 6-7%.
For some people, this is more psychological than anything.
They would prefer to have less debt or no debt and that would make them feel better than accumulating more in investments.
It is a personal preference.
Adapting the Framework to Your Personal Situation
While these “Financial Order of Operations” provide a roadmap or marching orders for what to do next, they’re not meant to be rigid.
Your situation may dictate a slight adjustment to the order!
Have any questions about what you’ve read? Let’s talk about them!
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