Do this First: Invest in a 401(k) or 403(b) retirement account up to the full extent of the employer's matching contributions.

If you're able to (i.e., if you still have some cash available), do this Second: Pay off high interest rate debts in order—beginning with those that have the highest after-tax interest rate.

If you're able to (i.e., if you still have some cash available), do this Third: If higher education costs are an issue, invest in a section 529 college savings plan up to the maximum amount eligible for state tax benefits.

If you're able to (i.e., if you still have some cash available), do this Fourth: If your tax rate is lower now than you expect it to be at retirement, then invest, up to the maximum allowed, in a Roth 401(k) and/or Roth IRA. (Note that Roth 401(k)s did not exist when this article was published.) If your tax rate is higher now than you expect it to be at retirement, then invest, up to the maximum allowed, in your 401(k) and/or a traditional IRA (if it is deductible).

If you're able to (i.e., if you still have some cash available), do this Fifth: Pay off moderate interest rate debts in order based on the after-tax interest rate.

If you're able to (i.e., if you still have some cash available), do this Sixth: Invest in a regular taxable account.

If you're able to (i.e., if you still have some cash available), do this Seventh: Pay off low interest rate debts in order based on the after-tax interest rate.