Got a pay raise? Invest Half of it for your Future

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Congratulations on getting a salary increment! Yes, you tirelessly worked an entire year and waited for 12 months to get an appraisal. Obviously, it’s natural to feel high, and you may already see many things to buy or splurge without worries.

While it’s understandable to pamper and reward yourself, why not steal a moment to think about your financial security? In other words, it’s a good occasion to start investing in some investment plans such as a company fixed deposit or FD, mutual funds and more.

Now that you have got an increment, it may mean two things!

  • Improvement in your Lifestyle and Life Situations

You may get a bike to commute to the office or rent out a home near to your office to save your commute time and spend more time with your spouse as you just got married. Thus, an increment can surely help improve a person’s lifestyle and life situations by a fair degree, and it depends on the percentage of raise itself.

  • You can Now Reach a Better Long-Term Goal by Investing More

You can also start to keep aside some capital towards some bigger life goals and for this; you may invest in some better schemes such as fixed deposits and more. If you can invest in an FD, you can approach a leading lender and get around 8.10% FD interest rates gain as per your membership status with the service provider.

  • Follow a Middle Path and get Going

Another thing that you can do is – strike a balance between taking care of one’s present and one’s future. For this, you can channelize your 50% of your increment towards creating a better life and 50% towards saving to face any situation in the future.

Thus, here are some ways to divert your money depending on life situations.

  • Money for Unknown and Unexpected Crisis

The prime thing that you can do is – keep aside some portion of your monthly salary (the bigger, the better) for an emergency fund. A crisis fund can help you deal with any unexpected emergencies.

A crisis fund should be called a decent crisis fund only when it has enough savings to last you more than three months or more.

You can utilize this fund when you face a sudden unemployment, health issues not covered by medical insurance or other situations causing you an economic stress.

  • Money for goals those are due in the next 3-5 years

Of the total saving an individual makes each month, experts always advise investing half or more than half in a recurring deposit, mutual funds or a fixed deposit portfolio.

Since the amount that you are investing is to fulfill short-term goals such as travelling abroad or purchasing a car, you can keep using it for other goals once the first goals are met.

  • Money for Retirement

Once you have saved enough money for short-term and crisis fund, you can invest the final amount of the savings in long-term instruments like mutual funds and more. You can also do it smartly by investing in tax saving fixed deposit or tax saving mutual funds.

The Bottom Line

You just went through some of the time-tested steps or methods and how you can make money make more money by investing in plans such as an FD or more as per need.

For an economically secure tomorrow, it is highly recommended to think ahead and outclass your peers by investing or keeping aside at least half of a salary increment for your future.

Happy financial freedom in advance to all of you who are due for a pay raise or basking in the glory of a salary increment now!

 

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