One of the challenges of being in a high-earning profession – whether in healthcare, business leadership, or another demanding field – is making smart, strategic financial decisions. You might feel more pressure than ever in today’s economic environment, with inflation, high interest rates, and market uncertainty all vying for your attention.
But even in uncertain times, there are steps you can take to improve your financial situation and prepare for the future. One of the most effective is building your financial planning pyramid of priorities – a step-by-step framework for deciding where to focus your time and money.
The financial planning pyramid is a structured framework that organizes your financial goals in order of importance, starting with basic needs like an emergency fund and progressing to long-term goals like alternative investments. The pyramid helps ensure you prioritize essential protections and savings before moving on to higher-risk or discretionary investments.
Over years of working with clients, we’ve found that one of the biggest challenges in achieving financial goals is figuring out which steps to take first—and in what order.
Clients often ask:
The pyramid provides clear guidance on these decisions by laying out a logical sequence, helping you stay focused on the right priorities at the right times.
Let’s walk through the different sections of the pyramid to help you understand this concept further.
Before accelerating debt repayment, buying a home, or increasing investments, focus on building a cash reserve that covers 3–6 months of living expenses. This emergency fund provides a cushion that protects you from unexpected costs, such as medical bills, car repairs, or travel emergencies.
Pro tip: Keep your emergency fund in an accessible, interest-bearing account separate from your everyday checking account.
Once your emergency fund is in place, focus on paying off high-interest debt – typically credit cards or certain personal loans. If you have student loans, ensure you’re using the most effective repayment strategy for your situation, whether that involves refinancing, applying for forgiveness programs, or exploring other options.
Choosing the wrong debt repayment plan can cost you thousands over time, so carefully review your choices.
With a solid foundation established, the next step is protecting your most valuable asset: your ability to earn an income. This includes having appropriate insurance, such as:
Protecting your assets by purchasing insurance that aligns with your debts, goals, and income projections will keep you protected while you address your short-term goals and pay off any debts.
Once you’re protected, you can focus on building long-term wealth through retirement accounts, college savings plans, or other investments. Setting up automatic contributions helps make saving a regular habit instead of a decision you have to revisit each month.
With the earlier steps covered, you may be in a position to explore opportunities such as:
These ventures usually involve more risk, so they tend to work best when supported by a solid financial foundation.
Many purchases can be a distraction from or obstacle to your financial goals, especially if you haven’t laid a solid foundation with an emergency fund and asset protection. But how do you determine your top financial priorities in the first place?
Write down both short-term (within 1–3 years) and long-term (5+ years) goals. Be clear and realistic.
A net worth statement shows the difference between what you own (assets) and what you owe (liabilities). Tracking your net worth over time helps you see your progress toward financial independence.
A budget (focused on future plans) is different from a cash flow statement (based on past records). It allows you to plan ahead for where your money will go, helping you prioritize your expenses without guesswork.
We recently sat down with Dr. Sarah and Caleb Smith, who are beginning to think about financial planning to eventually buy a house. Sarah, who’s in residency, and Caleb came to us with the following questions:
The pair identified their most important goal for the next 12 months as minimizing credit card debt. They felt that if they couldn’t do that, then they shouldn’t be thinking about buying a house at all. With that said, let’s take a look at their balance sheet and their budget.
Here’s their balance sheet, which outlines all of Sarah and Caleb’s assets and liabilities.
Usually, people don’t omit things on a balance sheet as easily as they would on a budget. But, since a balance sheet only shows values at a specific point in time, it’s very important to know how these figures are changing.
For example, what was the balance in their checking account six months ago? Was it higher, and they’ve been slowly using up their surplus? Or was it lower, and they’ve slowly been building some cash reserves?
Now that we have these figures in mind, let’s take a look at their budget, which will give us a more complete picture of their expenses.
Take a look at Sarah and Caleb’s expenses. What observations do you have? Are there any expenses they might be forgetting but should plan for?
They haven’t yet accounted for things like vacations, gifts, or even haircuts. Remember that even though these are variable expenses and often lower on the spending priority — unless you plan to completely cut them out — you need to account for them in your budget.
Now, we’ll need to adjust some of the other items to accommodate these expenses.
Subtracting their total expenditures from their total net income results in their surplus or shortage.
After adjusting their budget to include their additional variable expenses, Dr. Sarah and Caleb's surplus is around $100. This surplus is what we’ll use to help them build their net worth.
Looking at Dr. Sarah and Caleb’s balance sheet and budget, we were able to help them create an action plan to achieve their goals.
The couple’s primary short-term goal is to pay off their credit card each month. Looking at the information above, they have $1,500 in credit card debt and about $100 surplus of discretionary funds leftover each month. They also have a Roth IRA with $1,000 in it.
Using this information, here are three possible strategies to help the couple pay off their credit card:
Each option has pros and cons, so Dr. Sarah and Caleb had to carefully weigh them against each other to decide the best plan of action.
Once they saw their chosen strategy working toward paying off their credit card debt, they were able to make more confident decisions about what the best repayment strategy would be for their student loans (based on discretionary income). They were then able to begin transition planning and work toward buying a house.
Your financial plan, much like a pyramid, must be built from the ground up, with the most important goals forming the foundation of your plan and then working up. Without the basics in place, higher-level goals can collapse under pressure.
That’s why we created a 5 Steps to Organize Your Finances Checklist to help you organize and prioritize your goals.
CRN202808-9307537
Shane Tenny, CFP®, is the Managing Partner of Spaugh Dameron Tenny and a nationally recognized financial advisor. Since 2000, he has combined extensive financial knowledge with a passion for behavioral finance—helping clients make informed decisions based on both data and mindset. Shane often contributes to industry publications, appears as a guest on podcasts, and has been a leader in the financial planning field for years. He is known for making complex topics clear and practical for busy, high-income professionals seeking personalized advice they can trust.
/Logo%20Horizontal%20(4).png?width=2000&name=Logo%20Horizontal%20(4).png)