Are you so caught up in building your career and being there for your family that you feel like your finances are slipping through the cracks?

And, while you’d love some financial guidance, the idea of turning your hard-earned income over to a financial advisor (with high fees attached) doesn’t sit right. If this sounds like you, we can help.

With the right structure, you can feel in control of your finances without overwhelming yourself or sacrificing time with family. Let’s dive into a straightforward “waterfall” approach to guide your income into the right places.

The “Waterfall” Approach: Prioritize your financial steps

Think of your income like a waterfall, flowing through a series of priorities that build your financial foundation step-by-step. Here’s how it works:

Step 1: Cover your essential bills

The foundation of any financial plan is simple: cover the basics. This means your monthly bills—mortgage or rent, utilities, transportation, and groceries—are priority one. Paying these is non-negotiable before any other investments or savings goals.

Step 2: Build an emergency fund

Once your essentials are covered, it’s time to protect against the unexpected. Aim to set aside 6-12 months of living expenses in a high-yield savings account. This fund will be your financial buffer, offering peace of mind in case of job changes, family emergencies, or other disruptions. A high-yield account allows your cash to grow a little faster than a regular checking account, helping you stay a step ahead of inflation.

If you're a high earner living in a high-tax state, a significant portion of the interest you earn could end up going toward taxes. For a more tax-efficient alternative, consider holding your emergency fund in U.S. Treasuries, which are exempt from state taxes.

→ Explore Arta’s High Yield Cash Reserve

Step 3: Protect your loved ones with term life insurance

If you have dependents, securing a term life insurance policy is a smart next step. Term life insurance is affordable and straightforward—it provides a financial safety net for your family without the high costs and complications of other insurance types. Look for a policy that would comfortably cover your family’s expenses if they had to rely on it.

→ Watch Video: Term vs. Permanent Life Insurance, Which One Is Right For You?

Step 4: Optimizing tax-advantaged accounts

If you still have money left over after covering the essentials, it’s time to start building wealth in a tax-efficient way. Here’s a breakdown of your options:

• Maximize your 401(k): If you have access to a 401(k), contribute as much as you can to take advantage of employer matching and tax benefits. The growth potential of tax-deferred investments can be a huge advantage over time. The 2025 annual limit is $23,500.

• Open an IRA: If you don’t have a 401(k) through work, consider a traditional or Roth IRA. Both are excellent retirement tools with tax advantages, and you can choose one based on your specific tax situation and retirement plans. The 2025 annual limit is $23,500.

• Save for college with a 529 plan: If you have children and want to save for their future education, a 529 plan offers tax-free growth and withdrawals when used for qualified educational expenses. Many states even offer additional tax incentives for contributions.

• Fund an HSA if available: If your employer offers a Health Savings Account (HSA), it can be an incredibly efficient savings tool, especially with matching contributions. HSAs are triple tax-advantaged, meaning contributions, growth, and withdrawals (for qualified expenses) are tax-free. The 2025 annual limit is $4,300.

→ Watch Webinar Replay: Tax-Savvy Investing Essentials

Step 5: Building your investment portfolio

Once you’ve taken advantage of tax-advantaged accounts, it’s time to build a core investment portfolio with any additional discretionary income. Here’s a straightforward approach:

• Start with a low-cost ETF portfolio: Exchange-traded funds (ETFs) provide broad exposure to the market while keeping fees low. They’re a great way to gain diversified growth over time without the complexity or fees of individual stock-picking. Consider setting up automatic contributions, so your portfolio builds steadily in the background.

→ Explore Arta’s Classic Robo

• Graduate to satellite investments as you grow: Once you feel secure—say, with about 5 years’ worth of expenses in your ETF portfolio—you can start exploring alternative investments. Options like private market funds, structured products, or even certain types of permanent life insurance can add diversification, though they may come with some added risks and complexity. Make sure these don’t replace your core portfolio but rather complement it.

→ Explore Private Investments, Structured Products, and Wealthgen Insurance at Arta

Take control without overcomplicating things

By following this income “waterfall” approach, you can cover your financial bases while keeping your process streamlined and manageable. A digital family office like Arta Finance allows you to monitor everything in one place, offering insights and management tools that let you stay in control without high fees or the need for a traditional advisor.

The key takeaway? With the right structure and a few well-chosen tools, building a secure financial future doesn’t need to be overwhelming. Focus on small, steady progress, and watch as your financial security and peace of mind grow over time.

Geoff Tully is a Director at Arta. Geoff has spent over 15 years in the wealth management space, most recently as a partner in a boutique insurance and planning firm. Prior to that, he was a private banker at JP Morgan in New York and Miami and a director at an alternative investment firm where he supported large family offices in building their investment portfolios.