What should I do with my first salary?

The single highest-value habit is deciding your savings rate now, before lifestyle expands to absorb the income. Money is easiest to save at the start, when you have no fixed commitments and no comparison to a previous standard of living. **The order that works:** 1. **Automate savings on payday.** Aim for 20% if possible, 10% if not, but set it up as an automatic transfer the day salary arrives. Saving what's left at month-end almost never happens. This one mechanism outperforms every other financial decision you'll make in your first year. 2. **Build a starter emergency fund** — one month of expenses, then work toward three. 3. **Clear high-interest debt** — credit cards, personal loans. Nothing you invest in will reliably beat the 30-40% you're paying on a revolving card balance, so this is a guaranteed return. 4. **Take any employer match** on a retirement contribution in full. It's free money and skipping it is a straightforward loss. 5. **Get basic insurance.** Health cover if not provided, and term life insurance only if someone depends on your income. Skip the products that mix insurance with investment — they're generally poor at both, and heavily sold for a reason. 6. **Then invest the rest**, simply. A low-cost index fund via automatic monthly contributions. At your age, time is the dominant variable and complexity adds little. **What to avoid in year one**, since these are where first salaries mostly go: - **Lifestyle inflation on autopilot.** A raise absorbed entirely by a bigger flat and a car loan leaves you no better off with more obligations. Deliberately let some of each raise flow to savings. - **EMIs on depreciating things.** Phones, gadgets, a car you don't need. These convert future income into present consumption at a cost. - **Investing before you have a buffer.** You'll be forced to sell at the worst time. - **Complicated products sold by someone earning commission.** If you don't understand it in two sentences, don't buy it. **And spend some of it deliberately.** A savings plan with zero enjoyment gets abandoned. Budget a guilt-free amount for things you actually want — the goal is a sustainable balance, not maximum deprivation.