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Why this is correct (Q20 — sequence: capture match, build emergency fund, then increase retirement savings): This question tests practical sequencing for incremental monthly savings. Capturing an employer match first secures an immediate, effectively risk-free return on savings. Next, building an emergency fund protects you from needing to tap retirement accounts early (which can trigger taxes and penalties) and reduces financial stress. Once the match is captured and a modest emergency buffer exists (commonly 3 months of expenses for many planners, though individual needs vary), additional funds can be funneled into retirement for long-term compounding or into taxable investments for flexibility. This staged approach balances taking advantage of employer benefits while keeping near-term liquidity and avoiding costly early withdrawals.

Practical takeaway & how to implement with $200/month: A concrete implementation could be: set $X of your $200 to capture the full match (if less than $200 is required), direct $Y monthly into a small emergency fund until you hit your target, and then allocate remaining amounts to retirement contributions or taxable investing. If $200 is enough to capture the match and still leave a small remainder, split it accordingly. Document your plan in a simple budget and set automatic transfers or payroll deferrals to enforce the discipline. Reevaluate periodically—if your emergency fund reaches target, redirect more into retirement; if a high-interest debt emerges, prioritize paying it down. This sequence is conservative and beginner-friendly, balancing guaranteed employer returns with short-term safety and long-term growth.

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