Just because you can afford to buy something doesn’t mean you should, says Edgar Dworsky, founder of ConsumerWorld.org. “Just because you make a good salary, or just got a raise, doesn’t mean you should spend it all,” he says. Especially if you suddenly got a big jump in your income, keep your former standard of living and funnel the rest into paying off debts or adding to your retirement nest egg. Since you’re not lowering your existing budget or cutting expenses, you’ll be able to accomplish all this without feeling like you’ve had to cut back or make sacrifices.
“The money you don’t spend on ‘stuff’ or waste on expensive travel or meals could better serve most people by being saved and invested for the future,” Dworsky says.