Where to save first

Getting your feet on solid financial ground begins with knowing where to save first. That’s easier said than done, though, when you have multiple financial goals, like building an emergency fund, paying down credit card debt, and saving for retirement. For help, try climbing the savings ladder. Each “rung” helps prioritize the steps you can take to make the most of the money you have available to save. After you successfully climb one rung, start reaching for the next.

Keep in mind, the savings ladder places special emphasis on helping you save effectively for retirement. While you can probably get loans to pay for other things—a house, a car, your children's college tuition—there are very few ways to fund your retirement. Of course, it’s a general guide that may or may not fit you.

Rung 1: Establish an emergency fund

Before you do anything else, set aside enough money to cover three to six months of living expenses. That way, you’ll be prepared for any number of financial emergencies, like unexpected medical, home, and auto bills, just to name a few. Consider opening a separate, easily accessible account like a savings account or money market fund for your emergency fund and begin making automatic transfers to the account on a regular basis. You might be less likely to dip into the money for everyday needs, and you won’t have to think twice about saving.

Rung 2: Contribute to the Hewlett Packard Enterprise 401(k) Plan

To take full advantage of the company match, you must contribute at least 4% of your pay on a pre-tax and/or Roth basis. Hewlett Packard Enterprise will match 100% of the first 4% of pay you contribute. It’s like getting "free" money, and you get the added potential benefits of any tax-deferred growth and compounding returns. Any matching contributions are made to your account at the end of each calendar quarter and they are not made on after-tax contributions.

Remember, you have the flexibility to choose pre-tax contributions, Roth contributions, after-tax contributions, or a combination of all three depending on your needs. Regardless of how you contribute, you’ll pay no taxes on any company match received until you take the money out of the Plan. To update your contribution elections, visit Fidelity NetBenefits®.

Rung 3: Pay down high-interest credit card debt

If your interest rate is high on your credit card debt—more than 9% for example—use any extra savings to pay down the balance. If you have multiple accounts, work on the one with the highest interest rate first. (Keep paying at least the minimum required payment on all your other accounts, so you don't get hit with any penalties or hurt your credit score.) Then, when that first card is paid off, put your extra money toward paying off the next. You’ll find that each card gets easier to pay off, because you have more money to put toward the balance each month.

Rung 4: Contribute the maximum to the Hewlett Packard Enterprise 401(k) Plan

Building tax-deferred savings early makes sense, because the amount you need to save for basic expenses in retirement can be hundreds of thousands of dollars—or more. You don't want to be borrowing money for living expenses later, so consider stepping up your contributions to the Hewlett Packard Enterprise 401(k) Plan. For 2026, the annual contribution limit on pre-tax and Roth contributions combined is $24,500. If you’ll be age 50 or older this year, you can contribute an additional $8,000 in combined pre-tax and Roth catch-up contributions. Plus, you also have the option to make after-tax contributions—and save beyond the IRS limit—up to $66,000 of eligible pay in 2026. For more details, read Learn the 2026 IRS limits.

Rung 5: Fund an IRA

When you've maxed out your Hewlett Packard Enterprise 401(k) Plan account, consider other investment choices such as a Roth IRA. If you don't qualify for one because of your income, a traditional IRA might be another option. For 2026, the annual contribution limit for traditional and Roth IRAs combined is $7,000. If you’ll be age 50 or older this year, you can contribute an additional $1,000 in catch-up contributions. To learn more about IRAs, including income limits and withdrawal rules, read Looking for more ways to save for retirement? Check out IRAs.

Keep climbing

After you reach the top of the savings ladder, shift your focus to your other important financial goals, like saving for your children’s college education or paying down your mortgage. The Savings and Investment Checkup tool can help you identify where there might be room in your budget for additional savings goals.

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