What's your next step? 

Every dollar you earn has the potential to improve your financial future, but deciding what to do with it can be difficult. Should you save it? Pay off debt? Invest? The key is to have a clear plan that prioritizes financial stability and long-term wealth. Here’s an eight-step roadmap to help guide you in making smart financial decisions with every dollar you earn.

Remember that not everyone's journey is smooth and it's okay if you sometimes need to go back. The important thing is to keep moving forward. 

Check out our free PDF download of the 8 Steps for Building Wealth.

Step 1: Build a Starter Emergency Fund

Your first priority is creating a safety net. Start by setting aside enough money to cover 30 days of living expenses. This will give you immediate protection against unexpected financial setbacks like car repairs or medical bills. Having even a small emergency fund can prevent you from going into debt when life throws you a curveball.

How to Start:

• Set a modest savings goal of $500–$1,000 if you're just beginning.
• Cut discretionary spending temporarily to build this fund as quickly as possible.
• Automate your savings so you don't have to think about it.

Step 2: Max Out Employer Match

If your employer offers a 401(k) match, make sure you're contributing enough to get the full match. This is essentially free money for your retirement and can significantly boost your savings over time.

Why It Matters:

Not taking advantage of an employer match is like leaving money on the table. For example, if your employer matches 3% of your salary and you're only contributing 1%, you're missing out on an automatic 2% return on your investment.

Step 3: Eliminate High-Interest Debt

High-interest debt—like credit card balances—can be a huge drain on your finances. With interest rates often upwards of 15–20%, this type of debt keeps you from making real financial progress.

Action Steps:

• Use the debt snowball method to pay off the smallest balance first or the avalanche method to target the highest interest debt.
• Once this debt is gone, you'll have more cash flow available for saving and investing.

Step 4: Build a Full Emergency Fund

Now that high-interest debt is behind you, it's time to expand your emergency fund to cover 3–6 months of expenses. A robust emergency fund protects you from larger disruptions, like losing your job or dealing with extended medical issues.

Why It Matters:

Having a full emergency fund can prevent financial stress during longer-term crises. It also gives you the confidence to invest or take career risks, knowing you have a cushion to fall back on.

Step 5: Maximize Retirement Accounts

After your emergency fund is fully stocked, focus on maximizing contributions to tax-advantaged retirement accounts like 401(k)s, Roth IRAs, and HSAs (if you’re using a high-deductible health plan). These accounts offer significant tax benefits that can supercharge your retirement savings.

What to Do:

• Contribute up to the annual limit in your 401(k) and IRA accounts.
• Use an HSA for medical expenses or even as a secondary retirement account.

Step 6: Invest Wisely Beyond Retirement

Once you've maxed out retirement contributions, it's time to invest in a non-retirement brokerage account. This is where you can grow your wealth beyond retirement, giving you more flexibility to access funds before retirement age.

Key Considerations:

• Build a diversified portfolio of stocks, bonds, and other investments.
• Tailor your investments to your risk tolerance and long-term financial goals.

Step 7: Pay Off Low-Interest Debt

With your finances on solid ground, you can now focus on paying off low-interest debt, such as student loans or a mortgage. This step gets you closer to complete financial freedom, reducing financial burdens as you grow your savings and investments.

Action Plan:

• Consider paying extra toward the principal to reduce overall interest payments.
• Once low-interest debt is paid off, your entire income can be directed toward savings and investments.

Step 8: Build Future Wealth

With a strong foundation in place, your next dollar can be directed toward building wealth for the future. Whether you're focused on retirement, philanthropy, or leaving a legacy, this is the step where you grow your wealth with purpose.

What to Consider:

• Set new financial goals for wealth accumulation, such as early retirement, charitable giving, or starting a family trust.
• Continue to invest and grow your wealth with long-term vision and purpose.

Conclusion

By following these eight steps, you can ensure that every dollar you earn works hard for you. Whether you're just starting to save or already have a solid financial foundation, there's always a next step to take toward greater financial security and wealth. Take the time to assess where you are in this process and make a plan to follow through.