What To Do With This Money

A lump sum, run down the waterfall

Answer what applies and skip what does not. The answer at the bottom updates as you go, one bucket at a time, in the order of the Waterfall.

The money, and a little about you

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Checking and savings you could spend tomorrow. Not investments.

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Just yours. It sizes the 401(k) steps.

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Everyone's pay together. It sizes the 25% rule.

1

Cover the deductibleYour biggest one, in cash

What would you owe before insurance paid a cent? Leave blank what you do not carry.

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2

Take the free moneyThe employer match

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"50% of the first 6%" means 6 here.

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3

Kill the expensive debtEverything you owe, except the house is fine to list too

List each balance. The page decides which ones are expensive by type, rate and your age, and the cheap ones wait for step nine.

4

Build the cushionMonths of expenses in savings

What it costs to keep the household running for a month. Only what you must pay, not what you like to.

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5

Fill the tax-free accountsRoth IRA and HSA

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6

Fill the work plan401(k), 403(b) or 457 to the cap

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7

Twenty-five percentOf gross income, into retirement

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8

Pay aheadThe big planned costs

College, a wedding, a down payment, the trip. Anything with a price and a date.

9

Own it outrightThe cheap debt, last

Nothing to ask here. The mortgage and any low-rate loans from step three land in this bucket on their own.

Where it goes
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