Where Should Your Next Dollar Go?
By Ari Baum, CFP®
THERE’S NO SHORTAGE OF FINANCIAL TIPS OUT THERE. SAVE FOR RETIREMENT. BUILD AN EMERGENCY FUND. PAY DOWN DEBT. INVEST FOR THE FUTURE. MUCH OF IT IS PROBABLY GOOD ADVICE. AND THAT’S EXACTLY WHAT MAKES IT SO OVERWHELMING.
When every financial goal feels important, it’s hard to know which one deserves your next dollar. And when you’re not sure where to start, it’s easy to feel like you’re not making enough progress anywhere. That’s where the Money Stack can help. Think of it as a simple way to organize your financial priorities. Instead of trying to tackle every goal at once, you can focus on the step that may have the biggest impact right now.
Like building with blocks, the layers at the bottom support everything above them. And strengthening those first layers can make it easier to keep building over time. There’s no perfect order that fits every person or every stage of life. But thinking through these priorities one layer at a time can make it easier to spot where you’re on solid ground and where your next dollar might have the biggest impact. The Money Stack offers an intentional way to decide what deserves your next dollar.
CAPTURE YOUR EMPLOYER MATCH
If your workplace retirement account includes a matching contribution, it may be one of the most valuable places your next dollar can go. Few financial moves offer an immediate boost like money your employer adds alongside your own contributions. That’s one reason this layer often comes first.
BUILD A STARTER SAFETY NET
Only 47% of Americans say they can cover a $1,000 emergency expense without having to scramble. A flat tire, an unexpected vet bill, or a trip to the emergency room can quickly derail even the best financial intentions. A starter emergency fund of about one month’s worth of essential expenses helps keep temporary setbacks from becoming long-term debt, making every financial step that follows a little easier.
PAY DOWN HIGH-INTEREST DEBT
Every dollar spent on high-interest debt is a dollar that can’t go toward savings or investments. Reducing expensive balances may not feel as exciting as investing, but it can free up more of your money for the goals that matter most. That’s why many financial strategies focus on paying off high-interest loans and credit card debt before moving to the next layer.
BUILD A FULL EMERGENCY FUND
Once high-interest debt is under control, a larger emergency fund can provide something that’s hard to replace, flexibility. Whether you’re facing a job loss or another unexpected setback, having three to six months of essential expenses saved can give you time to adjust without derailing your long-term goals.
KEEP MORE OF WHAT YOU EARN
After you’ve built a stronger foundation, the next step is making your savings more efficient. Tax-advantaged accounts like 401(k)s, IRAs, and HSAs may help reduce the impact of taxes on your savings, depending on the account. That can help keep more of your money working toward your long-term goals before you invest elsewhere.
PROTECT WHAT YOU’VE BUILT
The more your financial life grows, the more there is to protect. Life and disability insurance, along with up-to-date beneficiary designations, can help your financial plan keep working even when life doesn’t go according to plan. It’s one more way to protect the people and goals that matter most.
PUT EXTRA DOLLARS TO WORK
Tax-advantaged accounts can do a lot of the heavy lifting, but they aren’t the only place to invest. Once you’ve prioritized those opportunities, additional savings may go into taxable investment accounts, helping you continue to build wealth over time.
WHERE DO YOU GO FROM HERE?
Every financial stack starts the same way, one layer at a time. The goal isn’t to rush to the end, but to make sure each layer can support the ones that come after it. If you’re not sure where you are in the stack, let’s talk. Together, we can identify the next step that makes the most sense for you.The content is developed from sources believed to provide accurate information. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. Consult with a financial professional regarding your specific situation. Ari Baum, CFP® is the Founder and CEO of Endurance Wealth Partners. For nearly three decades, he has helped individuals, families, and business owners turn complex financial decisions into plans they can execute with confidence. Securities and Advisory services offered through Prospera Financial Services Inc. Member FINRA/ SIPC. Brokerage and Advisory accounts carried by Wells Fargo Clearing Services LLC.
