Your first salary brings a sense of independence, excitement, and the freedom to spend on things you have always wanted. However, your first few years of earning are also the right time to build healthy financial habits that can support you in the long run. In an interview with HT Lifestyle, Ramneek Ghotra, chief growth officer, Finvasia Group, shared financial rules every first-time earner should follow before turning 30.
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1. Embrace the power of compounding
The 20s offer one significant advantage that is often underestimated, and that is time. According to Ghotra, money saved and invested early has more years to compound, which means even relatively small amounts can become meaningful when there is consistency. That early start can make a considerable difference over the long term.
2. Invest in financial literacy
A first salary is also an opportunity to start understanding how money works. Young earners should take the time to learn the basics of investing, taxation, insurance, credit, and the financial products they are likely to use as their income grows.
“Spending time, and where appropriate, some money, on a good financial course or a well-chosen book can be a worthwhile investment,” said Ghotra. Financial literacy may not produce an immediate monetary return, but it gives people the confidence to evaluate advice and make informed decisions rather than simply following what someone else recommends.
3. Build an emergency fund
{{/usCountry}}“Spending time, and where appropriate, some money, on a good financial course or a well-chosen book can be a worthwhile investment,” said Ghotra. Financial literacy may not produce an immediate monetary return, but it gives people the confidence to evaluate advice and make informed decisions rather than simply following what someone else recommends.
3. Build an emergency fund
{{/usCountry}}Ghotra highlighted that before chasing returns, it helps to have a buffer in place for the unexpected. Setting aside a few months of essential expenses in an accessible fund, kept separate from long-term investments, ensures that a job loss or emergency doesn't force the withdrawal of investments at the wrong time.
4. Practice asset allocation and diversification
“Avoid putting all of one's money in a single investment or asset class. There are relatively conservative avenues such as PPF that can help build a long-term savings discipline, while SIPs offer a structured way to participate in the markets without relying entirely on individual stocks,” recommended Ghotra.
5. Mitigate risk with adequate health cover
For someone young and earning their first salary, insurance can easily seem like an unnecessary expense, particularly when there are few immediate health concerns. But an unexpected medical emergency can erode years of savings in a short period of time. Building wealth is only one part of financial planning; protecting that wealth is equally important.
6. Follow the pay-yourself-first principle
As income increases, it is easy for spending to increase alongside it. Setting aside a portion of every salary before discretionary expenses begin can help create a financial cushion and prevent lifestyle inflation from consuming future income.
7. Leverage fintech for financial discipline
AI-based budgeting tools can track spending patterns, flag areas of overspending, and show how small, consistent savings can add up over time. This makes it easier for first-time earners to stay disciplined without having to manually monitor every transaction, turning good intentions into consistent habits.
Note to readers: This article is for informational purposes only and not a substitute for professional advice. Always seek the advice of your expert.