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The Amber Wealth Advisors Newletter

How to Create Your Money Flow Priority for Financial Success

Oct 07, 2023

Today, I will show you the process of creating your Money Flow Priority – a systematic approach to managing cash flow that helps you allocate every dollar in your plan as effectively as possible.

By understanding and implementing this system, you'll gain greater control over your money, never question if you’re making the right move, and move beyond traditional monthly budgeting to become more strategic with your finances.

 Why Create a Money Flow Priority?

Creating a Money Flow Priority is essential because it empowers you to make informed decisions about where your money should go. This approach ensures that every dollar serves a specific purpose, paving the way for financial security, wealth-building, and achieving your long-term financial goals.

Unfortunately, many people don't do this for the following reasons:

  1. Overwhelm: Each day you are bombarded online with information on how to perfectly master your money. It can be overwhelming when you start to quantify how much you must do. This leaves you feeling like you are behind in life with an incredible uphill battle ahead. 
  1. Lack of a Clear Plan: Without a personalized financial plan, you will struggle to determine the right course of action for your unique financial circumstances. Putting pen to paper and developing a realistic and actionable financial plan is the key to success. 
  1. Procrastination: When you are overwhelmed and don’t create a plan what you are essentially doing is procrastinating the inevitable. But with money, procrastination is the worst thing you can do. Money needs time to grow, so acting fast with the right plan is the best strategy. 
  1. Lack of Knowledge: Simply lacking the knowledge of what to do next is the biggest reason many people aren’t creating their financial plan. But what knowledge do you need? That’s the hard part to figure out as not everything is applicable to your specific life decisions. 

The good news is that you can overcome all these issues once you establish your Money Flow Priority.

Here's what it looks like, step by step: 

Step 1: Build Your Personal Finance Operating System 

Your personal finance operating system involves setting up multiple financial accounts, each with a specific purpose. Say goodbye to traditional monthly budgeting as automation becomes your ally, making financial management effortless. Your system forms the foundation of your money flow priority. 

Here’s what the setup looks like. Before you read any further, make sure you read all about the PFOS in my article here

Step 2: Fill Your Fixed Expenses Checking Account 

As a baseline, once you setup your PFOS, ensure that your fixed expense checking account always contains funds equivalent to five weeks of deposits.

Since these expenses are 95% completed automated and hands free, having a sufficient cushion in place is essential for feeling comfortable with full automation without worrying about an overdraft. 

Step 3: Maximize Your Company 401(k) Match 

At this stage, you need to start taking full advantage of your employer's 401(k) match program. If your employer offers a match, be sure you are maximizing every dollar that they should be giving you. This is part of your compensation.

So, if they offer a 50% match on contributions up to 8%, contribute 8%. This is free money, so we don’t want to miss out. 

Step 4: Tackle Bad Debt 

Prioritize paying off bad debt. 

What is bad debt?

In my personal opinion, any consumer debt without collateral AND with interest rates higher than the current 30-year fixed mortgage rate. Eliminating this debt is a critical step toward your financial freedom. 

Having bad debt linger while trying to complete the remaining steps would be setting yourself up for failure. 

Step 5: Build Your High-Yield Savings Account Balance (HYSA) 

Once your bad debt is paid off you should start feeling a little more secure with your money flow. Gradually, you will start to accumulate significant savings in your high-yield account. 

I want you to let the money pile into this account until it covers 13 weeks of both fixed and variable expenses, along with half of your annual sinking fund expenses. 

This will ensure if you lose your job or have an emergency come up your automations will have 13 weeks to continue to flow without worry. 

Step 6: Fund Your Short-Term Brokerage Account 

At this stage all your cash reserves are in place, debt is paid off, and you will start to have excess cash flow. This is a great place to be because it means you are in the overflow protocol stage. 

So, where should this cash overflow go? 

Steps 6-8 can be done simultaneously, but I would suggest you start allocating a portion of your overflow to your short-term brokerage account as early as possible. 

For this, we are simply looking out 5 years from today on what expenses might come up. For me, in five years, my oldest son will be starting college. My goal is to have $25,000 to help him with tuition, books, and room and board when that time comes. 

There are 260 weeks until I will need to make that payment. I simply divide $25k by 260 and make sure I deposit $96 a week into my short-term brokerage account. 

This can and should be automated. 

Do this for cars, weddings, significant gifting, or anything else that can’t be funded easily with monthly cash flow. 

Step 7: Contribute to Roth or Traditional IRA 

Retirement should be cooking in your employer sponsored plan at this stage, but we can kick it up a notch if we also contribute to an IRA.

I can’t tell you which account is better because it will depend on your specific circumstances. But, investing in an IRA gives you more flexibility than your employer’s plan and allows you to pick a greater variety of investments. 

Contribute up to the annual limit to your IRA. For 2024, that amount is $7,000. 

Step 8: Contribute up to 10% of Gross Income into a Long-Term Taxable Brokerage Account 

If you made it to step 8 it means you have no bad debt, cash reserves are full, you are getting the full match on your retirement account, you will safely fund your short-term financial goals, and you still have cash you want to invest. 

This is when you start to fill up your taxable brokerage account. 

Most people find it hard to even get to this position so if you’re here, congratulations! 

Any amount you start to contribute here is great so start funding if you have the cash flow. 

But there are two additional steps in this plan so let’s cap the amount you put here to 10% of your gross income. Meaning, if your household makes $250,000 a year, you should only contribute up to $25k a year and then move on to step 9. 

This taxable brokerage account will give you flexibility for an early retirement if that is what you are pursuing or simply be a way to maximize your tax saving strategy in retirement (more on that in future articles). 

Step 9: Max Out All Retirement Accounts 

Now that every bucket has been touched, we can go back to step 3 and max out our retirement accounts up to the annual limits. For 2024, that limit is a contribution of $23,000 for the year. 

Step 10: Pay Off Remaining Debt 

Finally, focus on paying off any remaining debt. If you’re at this stage, it’s likely the only debt you have remaining is your mortgage. 

And if you’ve completed steps 1-9, it’s time to pay it off. 

Becoming completely debt free before retirement is a must in my opinion and if you can pay down your mortgage which is likely the largest obligation you’ll ever have in your life it will be a freeing experience. 


When you establish this Money Flow Priority, you’ll never have to worry about whether you’re making the right decisions with your money or not. You now have a system in place to guide you in the right direction. 

And don’t get discouraged if you can’t make it to the later steps as fast as possible. Personal finance is a long game, and when you treat it that way you’ll be rewarded handsomely. 

See you next week!

Are you ready to take your financial journey to the next level? Here are two powerful ways I can guide you:

1. If you're a mid-career professional seeking financial mastery, I recommend an assessment and a personalized call:

 The Mid-Career Financial Assessment: Unlock the secrets to your financial readiness for the second half of your career and life by answering just 8 simple questions. Gain crystal-clear clarity on your goals and discover the exact steps to achieve them.

 Schedule A Call: Are you ready to have a financial advisor who genuinely cares about your aspirations? Let's have a conversation about what's on your mind and how we can work together to make your dreams a reality. 

2. If you're a hands-on DIYer craving a proven financial operating system:

→ The Automation Operating System: Transform your financial life from complicated and time consuming to simplified and automated. Join the ranks of my satisfied clients and me, as we effortlessly reach our financial goals without the burden of budgeting and sacrifice.


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