Although there is no 100% correct answer on how to use one’s money, people often follow similar flows in allocating money in investments, HSAs, retirement funds, etc.

The Fire Flow Chart is a very popular flow of allocating money for maximum returns.

Fire Flow Chart v4.2

Fire Flow Chart v4.2

Summary of flow in order:

  1. Budget and Essentials
    1. Rent/mortgage
    2. Food/groceries
    3. Essential items
    4. Income earning expenses
    5. Health care
    6. Minimum payments on debs/loans
  2. Employer Match and Emergency Fund
    1. Emergency fund
    2. Contributing to maximize employer match
  3. Debt Reduction
    1. Pay off highest interest rate loans
  4. Health Savings Account
    1. Contribute to HSA if eligible
  5. Individual Retirement Account
    1. Traditional and Roth IRAs
    2. Backdoor Roth
  6. ESPPs, Additional Savings, and maximizing your tax advantaged accounts
    1. ESPP
    2. Funds for large purchases or personal investments
  7. After Tax 401ks, Education Accounts, Taxable Accounts, and Low Interest Loans
    1. Mega backdoor Roth IRA
    2. Tax harvesting
    3. Pay off low interest rate loans

References

Fire Flow Chart Version 4.2: https://www.reddit.com/r/financialindependence/comments/ecn2hk/fire_flow_chart_version_42/