So, like 10 years ago when I got a big amount of money for Christmas, I went and bought my first guitar, which I could really only afford a Squier Bullet. Fast forward to now, I still have this but I also have a Epiphone Les Paul Standard a friend gave me.
I like the Les Paul, but I like the lightweight body of the Squier. It obviously sucks, it's 10 years old and is not a great build quality, but I still like playing it. Barring personal feelings about keeping my first guitar or buying a new one, would it be better, long term, to just replace the parts on it that suck or is the whole build quality just holding it back?
From a money standpoint, modding guitars is basically never worth it. But there's nothing more rewarding to me than having a customized instrument that's uniquely yours.
When it comes to modifying a starter guitar it really comes down to how the thing feels to you. If you like the build quality and neck feel of your Squier, then slapping some great new parts in it is a great idea. If you don't feel like it plays well right now, then it might be a better use of money to just buy something a bit better.
That said, I have a heavily modified Squier P-Bass that I absolutely love. Seymour Duncan pickup, Warmoth roasted maple neck, new machine heads, new tone cap, spray painted white, and so on. Looks, feels, and plays great! Wouldn't trade it for anything. :)