Financial Order of Operations: Complete 9-Step Guide

Every paycheck seems to disappear without a plan — that’s why the Money Guy Show built the Financial Order of Operations, a 9-step system that tells you exactly what to do with each dollar. This framework takes the guesswork out of financial priorities, from emergency deductibles to car payments.

Total Steps: 9 ·
Creator: The Money Guy Show ·
Emergency Fund Rule: 3–6 months of expenses ·
Car Payment Rule: 8% of gross income ·
Investment Priority: Employer match first

Five key numbers capture the essentials of the Financial Order of Operations:

What Is the Financial Order of Operations?

The Financial Order of Operations (FOO) is a nine-step system created by the Money Guy Show, designed to tell you exactly what to do with every dollar you earn. It prioritizes actions from protecting yourself against financial disaster all the way to charitable giving. Money Guy (financial education brand) describes it as “a nine-step guide for what you can do with your next dollar.”

• How does the Financial Order of Operations work? You follow the steps in order: start with step 1 (deductibles covered), then move to step 2 (employer match), and so on up to step 9 (low-interest debt payoff). Each step builds on the previous one, ensuring you don’t skip critical protections or free money.
• Who created the Financial Order of Operations? The framework was developed by Brian Preston and Bo Hanson, co-hosts of the Money Guy Show. It has been refined over time; an older version available online had 10 steps and began with creating a budget (The Best Interest (personal finance blog)).

What Is Step 7 of the Financial Order of Operations?

Step 7 is the hyper-accumulation phase. According to the Money Guy’s educational video, you target a 25% gross-income savings rate here, aiming for retirement or financial independence. Money Guy (YouTube explainer) states that steps 5 and 6 are considered complete when those accounts are maxed out or when savings reach 25% of gross income.

• What are the previous steps before step 7? Steps 1–6 cover deductibles, employer match, high-interest debt, emergency reserves, Roth IRA/HSA maxing, and then employer retirement accounts like 401(k), 403(b), 457, or TSP.
• What happens after step 7? Step 8 addresses prepaid future expenses (reframed as “abundance goals”), and step 9 is paying off low-interest debt, because the Money Guy argues that money is better served working elsewhere first.

A common question is how the 8% rule fits here. The 8% rule is a car-spending guideline, not a FOO step — it applies when you decide to buy a car during step 7 savings.

What Is the Money Guy’s 8% Rule?

The Money Guy’s 8% rule is a car-affordability guideline that caps monthly car payments at 8% of gross monthly income. It is part of the broader 20/3/8 rule: put 20% down, finance for 3 years or less, and keep the payment at or under 8% of gross income. Money Guy (car-buying FAQ) states that paying cash is best, but if financing is needed, follow the 20/3/8 rule. The only exception is luxury vehicles, which should be paid cash or paid off within one year.

• How does the 8% rule apply to car buying? If you earn $5,000 gross per month, your monthly car payment (principal + interest) must not exceed $400. A 20% down payment on a $25,000 car is $5,000, and the loan term should be 3 years or less.
• Is the 8% rule the same as Dave Ramsey’s 8% withdrawal rule? No. Dave Ramsey’s 8% rule is a safe withdrawal rate for retirees, not a car-payment cap. The Money Guy’s 8% rule applies only to auto loans.

This rule sits outside the strict FOO sequence but is frequently discussed alongside it. Money Guy (episode on car buying) emphasizes that the 20/3/8 rule prevents over-committing on a depreciating asset.

What Is the 70 20 10 Rule in Investing?

The 70/20/10 rule is a simple budgeting guideline: 70% of income goes to spending, 20% to savings, and 10% to investing. It is not a detailed step-by-step framework like the FOO. Bankrate (financial media outlet) provides an eight-step investing order that incorporates similar allocation ideas but with more specific priorities.

• How does 70/20/10 differ from the Financial Order of Operations? The FOO tells you the exact order of moves (e.g., emergency fund before Roth IRA), while 70/20/10 only tells you how much to allocate, not where to put it first. The FOO is a sequence; 70/20/10 is a budget split.
• What percentage goes to spending, saving, and investing? 70% spending, 20% saving, 10% investing. The savings portion includes emergency reserves, retirement accounts, and other goals. The investing portion is typically for taxable accounts or additional retirement contributions.

The 70/20/10 rule is often used by beginners because of its simplicity, but it lacks the nuance of the FOO’s prioritization. For someone with high-interest debt, 70/20/10 could unintentionally allow too much spending before tackling urgent debts.

What Is the 3 6 9 Rule of Money?

The 3/6/9 rule is a guideline for emergency savings: 3 months of expenses for singles, 6 months for families, and 9 months for self-employed individuals. It aligns directly with step 4 of the Financial Order of Operations, which targets 3–6 months of expenses in emergency reserves. Money Guy (FOO resource) explicitly recommends that range. For an in-depth look, see our guide: Why Save 3–6 Months of Expenses in Your Emergency Fund? Guide.

• How does the 3/6/9 rule relate to emergency funds? It provides a sliding scale based on risk: lowest for stable employment, higher for dependents, highest for variable income. The FOO’s step 4 is more flexible, stating 3–6 months for most people.
• What are the specific numbers? 3 months for singles, 6 for families, 9 for self-employed. These are rules of thumb, not absolute targets. Some experts, like those at First Light Wealth (wealth management blog), use a simpler checklist without the 9-month tier.

The 3/6/9 rule is a complement to the FOO, not a replacement. It adds nuance for different household situations but doesn’t change the core priority of building reserves before investing aggressively.

How Do I Make a Financial Order?

To create your own financial order, start by listing all income sources and monthly expenses. Consider using a budgeting app to track expenses — see our picks for the Best Budgeting App 2026. Then follow the Money Guy’s 9-step system as a template. You can customize the order based on your personal circumstances, such as debt types, employer match details, and eligibility for Roth IRA or HSA. First Light Wealth (wealth management blog) offers a simplified version with fewer steps, which can be a starting point for those overwhelmed by 9 steps.

• What are the first steps to create a financial order? Step 1: calculate your highest insurance deductible and set aside that amount in a high-yield savings account. Step 2: contribute enough to your 401(k) to get the full employer match. Step 3: pay off high-interest debt (credit cards, payday loans).
• Can I customize the Financial Order of Operations? Yes. The FOO is a framework, not a rigid commandment. For example, if you have no high-interest debt, you can proceed faster through step 3. If you are self-employed, you may prioritize the 9-month emergency fund before maxing retirement accounts.

The key is to maintain the core logic: protect yourself, capture free money, kill toxic debt, build a buffer, then invest aggressively. Deviations are okay if they reflect your risk profile, but skipping steps 1–4 before investing is dangerous.

The 9 Steps of the Financial Order of Operations

Here is the complete step-by-step sequence as documented by the Money Guy Show. Each step is backed by verified facts from their official resources.

1. Deductibles Covered – Save your highest insurance deductible in cash, ideally in a high-yield savings account (Money Guy (FOO resource)).
2. Employer Match – Contribute enough to your 401(k), 403(b), 457, or TSP to get the full match. This is free money with potential 50–100% return (Money Guy (educational YouTube video)).
3. High-Interest Debt – Pay off credit cards and other debt with rates above 7–10%. Money Guy calls credit card debt “chainsaw dangerous” (Money Guy (YouTube explainer)).
4. Emergency Reserves – Build 3–6 months of living expenses in cash. Cash from step 1 counts toward this target (Money Guy (FOO resource)).
5. Roth IRA and HSA – Max out Roth IRA and HSA contributions if eligible (Money Guy (YouTube explainer)).
6. Employer Retirement Accounts – Shift back to 401(k)/403(b)/457/TSP and max them out (Money Guy (YouTube explainer)).
7. Hyper Accumulation – Aim to save 25% of gross income for retirement or financial independence (Money Guy (YouTube explainer)).
8. Abundance Goals – Save for prepaid future expenses like a house down payment, car (using 20/3/8 rule), or other large purchases (Money Guy (car-buying FAQ)).
9. Low-Interest Debt – Pay off low-interest debt (e.g., student loans under 4%, mortgages) because money usually works harder invested (Money Guy (YouTube explainer)).

Money Guy (episode on rules) confirms that the FOO is a core part of their educational product. An older 10-step version, reproduced by The Best Interest, listed “Create a budget” as step 1 and “Prepay future expenses” as step 10 (The Best Interest (archived PDF)). The current 9-step version removes budgeting as a separate step and integrates it into the process.

Quotes from Experts and Users

“Protect yourself from financial disaster before doing anything else.”

— Money Guy, financial education brand (Money Guy (FOO resource))

“Credit card debt is chainsaw dangerous.”

— Money Guy, financial education brand (Money Guy (YouTube))

“This is essentially free money for your future.”

— Bankrate, financial media outlet (Bankrate (investing guide))

These perspectives underline the core message: the FOO is about layering protections first, then capturing the easiest returns, and only later pursuing growth. The Bankrate quote highlights why the employer match step is non-negotiable.

For anyone building wealth, the implication is clear: follow the FOO steps in order, or risk leaving free money and protection on the table. 247 Wall St (commentary) suggests that the 25% savings target can start at 15% under certain conditions, but the sequence remains the same. For a single parent with high-interest debt, the choice is clear: kill the debt and build emergency reserves before investing, or face chainsaw-level risk. For a young professional with a 401(k) match, the decision is straightforward: capture the free money first.

Frequently asked questions