The Financial Priority List
The exact order to attack money: emergency fund, free match, high-interest debt, retirement, then life.
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 95%
Dunlap's Financial Priority List gives an ordered sequence for every dollar. Step one is a three-month emergency fund in a high-yield savings account, before any debt payoff, because an emergency will come and stability protects mental health. Step 1.5, sliding in before debt, is capturing any employer 401k match because it's free money. Step two is paying down debt over 7% interest (the stock market's expected return), starting with credit cards. Step three pairs retirement savings with paying down sub-7% debt, and step four saves for big life goals like a house, wedding, or early retirement.
Origin
Dunlap built the list into Financial Feminist, deliberately breaking from the common 'pay off all debt before you save' advice she associates with Dave Ramsey because it ignores emergencies and mental health.
Core principles
- 01Stability first: an emergency fund precedes even debt payoff.
- 02Never leave a free 401k match on the table.
- 03The 7% interest threshold decides what debt to kill before investing.
- 04Retirement and low-interest debt can be tackled in parallel.
How to run it
- 1
Build a starter emergency fund
Save at least three months of living expenses in a high-yield savings account before paying off any debt, including credit cards.
Pro tip A high-yield savings account earns meaningfully more interest for zero extra effort.
Watch out Without this buffer, one emergency pushes you into more debt.
- 2
Grab the 401k match
If your employer matches contributions, contribute enough to capture the full match; it slides in at priority 1.5, before credit card payoff.
Pro tip A match is free money and an instant guaranteed return you can't beat elsewhere.
- 3
Kill debt over 7%
Pay down any debt charging more than about 7% interest, starting with credit cards, since it costs more than you'd expect to earn investing.
Watch out Nothing reliably returns 25%, so high-interest credit card debt must go before investing.
- 4
Retirement plus low-interest debt
Simultaneously prioritize retirement savings while paying down debt under 7% such as most student loans, car loans, and mortgages.
- 5
Save for big life stuff
Once retirement is on track and low-interest debt is shrinking, save for major goals: the car, the house, marriage, kids, a business, or early retirement.
In the wild
Dunlap describes the match as a 'Lion King one-and-a-half situation': it slides in between priority one (emergency fund) and priority two (debt). If an employer matches 3%, contributing 3% doubles it instantly, so you capture it even before paying down credit card debt.
→ Savers lock in a guaranteed 100% return on matched contributions rather than forfeiting free money while attacking debt.
Common mistakes
Paying off all debt before saving anything
Skipping the emergency fund means the next unexpected cost sends you back into debt, and it ignores the mental-health value of a buffer.
Ignoring the 401k match to attack debt
Forgoing an employer match to pay down debt faster leaves a guaranteed free return on the table.
Is it for you?
Best for
Anyone who wants a clear, defensible sequence for allocating money.
Not ideal for
Someone whose income doesn't yet cover basic living expenses.
From the transcript
“your emergency fund should be at least three months of living expenses in a high yield savings account... that is our first step before we…”
“one and a half is getting that 401k match because it's free money and we're actually going to do that before we start paying off…”
From the episode
Tori Dunlap: Unlocking Financial Freedom, the REAL Cause of Money Problems and How to Defeat Them for Good
Tori Dunlap