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Got your 1st Salary, How to manage your Money !!!….

By   /   May 21, 2013  /   No Comments

1st of all Congratulations !!! I know I am not the only one who is wishing you on your 1st job, all of a sudden you must be getting calls from people who are into selling of Life Insurance products 😉


Then there are close family friends who are agents of insurance companies. This is how they try to convince you to buy the insurance product; “ Since now you have entered a new phase of life & in the near future your responsibilities are definitely going to increase, you should buy this XYZ product. This product will solve the purpose of Insurance + Tax Saving + Investment”. Sounds Intersting !!!… Trust me No matter what your advisor tells you about the investment product, charges deducted per annum are so high that final returns from most of the products will be in range of 2-4 %.


Now the BIG Question is where to Invest !!!


Step 1: Calculate if you need to Pay Tax.

Have a look on my article: How To Calculate Tax


Step 2: Buy a Term Insurance & Health Insurance Plan (Online)


  1. Buy these plans online because there will be no agent in between due to which cost will be very less.
  2. Recommended websites: Policy Bazaar


Step 3: For Tax Saving purpose invest in Public Provident Fund (PPF), National Savings Certificate (NSC), Five years tax saving Fixed Deposits.Though it’s highly recommended to invest in PPF.

AVOID: Insurance Plans, Endowment Plans, Retirement Plans, Annuity Plans, Highest NAV guaranteed plans or any other plan offering Insurance + Tax Saving + Investment.


Step 4: If you are still left with some money after investing in tax saving instruments, Set a goal & invest it systematically. Read more about it here:

Goal Based Investing

If your time horizon < 5 years, invest in bank Fixed Deposits, NSC, Debt Mutual Funds

If your time horizon is > 5 years, set a target amount & invest in Equity based Mutual Funds through Systematic Investment Plan.

Target Based Calculator


Let’s have a look at the list of Don’t & Do’s:



  1. Do not invest directly in shares.
  2. Do not invest in Mutual Funds for short period & do not try to time the market. Remember it’s not about the timing in the market, it’s all for how much time you stay invested in market. Read my article on Benefits of Investing early: Benefits Of Investing Early
  3. Do not buy ULIPS, Insurance Products, Endowment plans, Highest NAV guaranteed plan, Retirement Plan etc. Remember Charges in all these products are too high which leads to low return at the time of maturity of these plans.



  1. Go for Goal Based Investment i.e. Set a goal & then invest.
  2. Buy Term Insurance & Health Insurance Online.


In general best investment combination for all age groups is:

  1. Tax Saving: EPF, PPF
  2. Investment: Mutual Funds through SIP (Invest only if time horizon is greater than 5 years)
  3. Insurance: Online term Insurance.


Hope you guys will follow these simple steps & make your financial life tension free :). For any clarification or query, feel free to drop a mail at financialkundali@gmail.com . I will try to resolve it as soon as possible.

Happy Investing 🙂


Recommended Articles:

1. Public Provident Fund

2.  Why To Save Tax

3.  Impact of 1%



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About the author

Hi My name is Hari Om Tripathi. I am an engineer by chance & a Personal Financial Planner by choice. Currently residing in Kanpur & writing full time for Financial Kundali. In case you have any query about Personal Financial Planning such a buying a MF or ULIP, going for a life insurance plan or a term plan, to surrender your policy or not or any other questions related to your Personal Financial Planning, write to me at financialkundali@gmail.com

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