Learn · Your first salary
Your first salary: a simple order of things
Where the money goes first, second and third, before any investing.
3 min read
Have a plan before the money lands
The first salary disappears fast. Deciding the order of things in advance is easier than deciding every month. Here's an order that works for most people.
In order
The order that works for most people
- Essentials and high-interest debtRent, food, travel, family. Pay credit card dues in full first: card interest can be 36% to 42% a year, more than any investment earns.
- An emergency fund3 to 6 months of expenses somewhere safe and quick to reach. It stops a surprise from turning into debt.
- Health and life coverCheck your employer's health cover. If people depend on you, a term policy is cheap at your age. Skip plans that mix insurance with investing.
- Then start investingA monthly SIP for goals 5 or more years away. ₹500 or ₹1,000 a month is a real start.
Where it goes
50 / 30 / 20 on a ₹40,000 salary
- Needs: rent, food, travel₹20,000
- Wants₹12,000
- Saving and investing₹8,000
A rough split, not a rule. If rent takes more, save less at first and raise it with every increment.
Myth
I should invest my whole first salary to get a head start.
Fact
Without an emergency fund, one surprise bill can force you to sell at a bad time. Order matters more than speed.