5 Smart Purchases From Your First Salary

One of the best days in a youngster's life is when they receive their first paycheck as it signals the start of newfound freedom. As delighted and grateful as one should feel, they nevertheless need to be careful with their first paycheck. Typically, individuals buy a ton of presents for their loved ones, friends, and themselves. Although there is nothing wrong with expressing your affection, you can make far wiser investments that will eventually benefit not just you but also those around you in the future.

Make these 5 practical investments from your first salary and thank yourself later!

• Buy Life Insurance

  Buying life insurance early on is one of the best investments you’ll make as a young working professional. Especially, if you’re the sole earning member of your family, it is crucial to safeguard some funds for your family’s comfortable living, in case of an unfortunate event. To do so, you can consider investing in HDFC Life Click 2 Protect Super to safeguard your family’s future. It will not only act as a comprehensive protection plan for yourself but also an option to increase your cover on marriage or child-birth.

• Systematic Investment Plan (SIP)

  A systematic investment plan (SIP) is a type of investing plan that enables you to make regular, small investments into the mutual funds of your choice. The major benefit of opening a SIP is that you can start investing with as little as INR 1000. One of the biggest advantages of investing through a SIP is that you get to invest during market highs and lows, averaging out your total investment amount and resulting in a higher return down the road.

• Build an Emergency Fund

  Unexpected events are difficult to anticipate; all you can do is be ready for them. You must therefore continually maintain an emergency fund in order to be ready for the unforeseen. This is a defined sum that you set aside each month to protect your family and yourself from unfortunate circumstances. Depending on your lifestyle and level of risk tolerance, you can choose from a variety of solutions, including FDs, mutual funds, SIPs, etc., to develop an emergency fund.

• Set Up Automatic FD Deposits

  Banks provide savings account customers with the option to set up an automatic fixed deposit instruction. According to this instruction, the remaining balance in your account is automatically transferred to an FD, which pays a greater interest rate than a savings account, when it exceeds a pre-specified threshold. This is a wise strategy to save as much money as you can and get ready for the future.

• Invest in Yourself

  One of the biggest favours you can do yourself with your first hard earned income is to invest in yourself. Read books, invest in value added courses and training programs, keep upskilling yourself, and invest in your financial education. Learn about various investment and personal financing strategies so that you’re always financially savvy, secure, and never have to worry about managing your money.

  Investing your hard-earned money by making money-smart choices right from the beginning of your financial journey is always going to serve you well in the long-term.

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ARN: ED/12/22/31004