Being hired for your first job and earning your first paycheck is exciting. It offers a feeling of financial independence, plus it’s extremely satisfying. But before you go overboard with the thrill of having your own money, stop and pause for a minute. It might sound crazy, but how about coming up with an investment plan?
Saving your money in any way might not be top of mind after scoring your premiere salary. After all, you’re young and you likely have hundreds of paychecks lined up. But as with all things in life, starting early is always a bonus.
Here are four reasons you should consider investing at least a part of your salary.
Take Advantage of Your Youth
According to the 2018 Planning & Progress Study by Northwestern Mutual, millennials, compared to other generations, are “highly disciplined” when it comes to making an investment plan. They have a strong desire for figuring out their financial future and an aptitude for strategizing their budget. The survey concludes that one in three millennials feel discomfort when they spend money even when they know they can afford it.
Trust your instincts. One way to assuage your unease is to manage your finances wisely. Applying for life and health insurance early on shows shrewd foresight. Due to the lower risk, insurance companies typically approve those in their 20s faster. Younger customers also pay lower premiums. An insurance policy functions both as a financial safety net and an investment that you luckily don’t manage yourself. Plus, everyone knows that investing is a game that’s best played early.
Hold On to That Bonus
You might have big plans for your bonus, like the latest Apple gadget or a long-awaited vacation. However, as tempting and easy as it is to splurge, try thinking about the future. Putting that financial boon can make a huge difference in your long-term investment plan, which you can grow so you’ll have an even fancier gadget or a bigger trip in the future.
Better yet, come up with a short-term savings plan from your monthly salary to prepare for those small rewards. After all, you work hard and you deserve those, too.
You Can Use Sudden Windfalls Wisely
Did you just get a huge performance-based bonus? Did a relative leave you with a sizeable inheritance? Did you win the lottery? Unexpected windfalls are incredibly rewarding. They feel like gifts from the universe. But before you spend it all on a luxury weekend getaway, stop and think for one second. You might want to put at least some of that money away.
Did you know that a 2021 study by nonprofit industry trade groups LIMRA and Life Happens shows that millennials were most affected by the pandemic in terms of their financial situation? Amid the uncertainties of the virus, 45% of millennials answered that they were more likely to buy life insurance. Moreover, 43% of millennials surveyed revealed that they were worried about leaving their dependents financially unsure if they die.
Avoiding such circumstances can be accomplished with FWD’s Set for Tomorrow plan. There’s no better luxury than the feeling of security.
Start Paying for Your Place
Real estate is another way to kickstart your investment plan. Whether you intend to use it as a home for yourself or rent out in the future, real estate is always a good, solid investment., several developers have tailor-made their plans to cater to young urban professionals. Low down payment and minimum monthly mortgage payments are available for condominium units all the way to single detached lots.
The first paycheck is always an exciting one. While you can excuse giving yourself a celebratory treat for working hard for your money, remember that you can make your money work for you, too. An investment plan doesn’t have to be big or complex. You can start small and build up your nest egg as your career thrives. The old 10% of your salary still rings true. Yes, the gratification may not be instant, but the rewards are immense. So, go ahead. Start early.