Order of Operations Allocator

Saving is step one. This is step two.

Deciding to save is the hard part, and it is the part that matters most. But once the money exists, where you send it is not a matter of taste. Some destinations pay a guaranteed return, some pay an employer's money, and some pay nothing at all until decades later. Getting that sequence wrong is expensive in a way that is almost invisible, because nothing goes obviously wrong. You just end up with less.

This spreadsheet turns that sequence into a waterfall. You enter your income, expenses, debts, and account room, and each step draws what it needs before handing the remainder to the next one. The first step still showing a number is where your next dollar belongs.

The nine steps

1. Starter emergency fund. A small cash buffer, so the next surprise does not become new debt.
2. The full employer match. An immediate return on your own contribution. Nothing else competes.
3. High interest debt. A guaranteed return equal to the rate you stop paying.
4. The full emergency fund. The cushion that keeps you invested through a job loss.
5. HSA, if eligible. Deductible going in, tax free growth, tax free out for qualified medical costs.
6. IRA. Broad investment choice and low costs compared with most employer plans.
7. The rest of the employer plan. Remaining tax advantaged room, after the better-termed accounts.
8. Lower interest debt. Optional, and as much temperament as arithmetic.
9. Taxable brokerage. No cap, no early withdrawal penalty, where the surplus lands afterward.

The full reasoning for each rung, including where the ordering is genuinely arguable, is in the order of operations essay.

Why the contribution limits are blank

Three cells in this workbook are deliberately empty: the employer plan limit, the HSA limit, and the IRA limit. The sheet will not fill them for you.

That is not laziness. Contribution limits change every year, and a limit typed into a spreadsheet does not announce when it expires. It keeps producing confident, wrong answers indefinitely, and the file gives you no signal that anything is off. A tool that quietly goes stale is worse than a tool that asks you to do ten seconds of work, because the first one you trust.

So you look them up at irs.gov once a year and type them in. The sheet flags those three cells in a darker shade so you cannot miss them.

The threshold is a judgment call, not a law

Step three splits your debts at a high interest threshold, which the file defaults to 7% and lets you change. That number is not handed down from anywhere. It represents the return you believe you would otherwise earn by investing, which is why a rate above it is worth clearing first and a rate below it is arguable.

Set it higher and more debt gets tolerated while you invest. Set it lower and you clear debt more aggressively. Both are defensible, and the honest answer is that the gap between them is narrower than the internet suggests. What is not defensible is carrying a 24% balance while contributing to a brokerage account.

What this tool cannot tell you

It ignores income phaseouts, filing status, catch-up contributions for older savers, plan-specific vesting schedules, and the mechanics of a backdoor Roth. It assumes a single household with one plan. It does not know whether your employer match vests immediately or over four years, which matters if you might leave.

It also assumes the ordering itself is right for you, and there are real cases where it is not. Someone with unstable income should probably build the full emergency fund earlier. Someone who cannot sleep while carrying a mortgage may rationally pay it down ahead of investing, accepting a lower expected return for a certain one. The steps are editable for exactly that reason.

Confirm your own eligibility before acting on any of it. This is a structure for thinking, not a ruling.

Using it

Fill in the Inputs tab, list your debts with balance and APR on the Debts tab, then read the Waterfall. Revisit when your income, expenses, or balances move materially, and once a year in January when the limits reset.

Found an error, or think a step belongs somewhere else? Tell me. Corrections get published with a date attached, the same as they do for the research reports.