Where Should You Save First?

Building a strong financial foundation starts with knowing where to focus your savings. Here’s a roadmap of priorities to help get you on the right track:

1️⃣ Emergency Fund

Begin by saving 3–6 months’ worth of living expenses. This serves as your financial safety net, helping you cover unexpected costs like medical bills, car repairs, unexpected home maintenance or even job loss—without relying on debt.

2️⃣ Retirement Plan with Employer Match

If your employer offers a retirement plan with a match, start by contributing enough to get the full match. It’s essentially free money that supercharges your retirement savings—don’t leave it on the table!

3️⃣ Health Savings Account (HSA)

Eligible for an HSA? This triple-tax-advantaged account is a game-changer. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free.

4️⃣ Roth IRA or Backdoor Roth IRA

After maximizing your employer match and funding your HSA, consider contributing to a Roth IRA. With tax-free growth and withdrawals in retirement, it’s a great tool for tax diversification and long-term planning. There are a variety of rules and limits to follow, so check with your financial advisor if you’re eligible for either.

5️⃣ Taxable Brokerage Account

Once you’ve maxed out your tax-advantaged accounts, a taxable brokerage account can help you grow your savings further. It offers flexibility, no contribution limits, and potential long-term capital gains tax benefits.

6️⃣ Max Out Your 401(k)

Circle back to your employer-sponsored 401(k) and work toward maxing it out for the year.

By following this list, you’ll be well on your way to building financial security and flexibility. If you need help tailoring a strategy to your financial situation and goals, then Sandbox Financial Partners is here to guide you every step of the way!