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(3) the money can be withdrawn for medical expenses at any time tax-free. (1) the contributions are pre-tax dollars, or the contributions can be deducted HSA’s have a triple tax advantage meaning: HSAs are for medical expenses, and they act like pre-tax 401k’s on the front end and Roth IRAs on the back end. Roth’s max contributions = $6,000 per year (per 2020)

Roth contributions are after-tax dollars that grow tax-free and can be withdrawn tax-free during retirement, after age 59 ½. Max Roth and HSA contributions – These are TAX-FREE retirement accounts. This is to ensure you are not missing out on the benefits of investing earlier in life.ĥ.

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If you are wanting to increase your emergency fund, the Money Guy suggests first focusing on 3-6 months (or 18-36 months if nearing retirement) plus anything else you will need within the next 5 years, then finish the rest of the order of operations before coming back to increase your emergency fund. This is not the money you will use to build your wealth as you want it to be there when an emergency happens. *Note, they say this money should be in a savings account and not in any investments as those could either be down in value when you need it, or it could take you longer to get to that money due to banking/government regulations. They suggest you also include any other things you might need within 3-5 years, ( houses, cars, weddings, etc.) in a cash savings account. This can help you transition into retirement as it could take a little bit to start withdrawing any of your retirement funds, and it could help cover you if the market is down when you retire inhibiting you from being able to withdraw your retirement at a significate loss. This depends on how quickly you think you could find a new job and replace your income should something happen.ģ months – if you are in a high-demand field and could find a new job quickly.Ħ months – if you feel it could take you longer to find a new job that will replace your income.ġ8-36 months – If you are nearing retirement. Emergency reserve ( Important money) – Have 3-6 months saved, or 18-36 months if nearing retirement. For credit cards, it is your worst enemy.Ĥ. *Compound interest can either be your best friend or your worst enemy. Credit cards can be an extremely dangerous tool if not used properly. These not only cost you high-interest fees, but they will deny you the ability to gain money from investing these dollars. High-Interest Debt-Credit cards ( Expensive money) – DO NOT carry any credit card balances as that will cost you a lot of your future. Make sure you are maxing out any employer match you can receive in your retirement accounts.ģ.

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Employer Match ( Free money) – DO NOT miss out on the free money.

Make sure to have at least enough cash reserves to cover the one deductible that costs the most.Ģ. This can help you from being thrown backward on your financial journey should something unexpected happen. Deductibles covered – Have enough saved to cover co-pays and deductibles (e.g., Health, Auto, & Home).

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