I'm going to emphasize what david and many others said: Avoid debt whenever possible. Being in debt feels like slavery (for example, I can't quit my job or get

I'm going to emphasize what david and many others said: Avoid debt whenever possible. Being in debt feels like slavery (for example, I can't quit my job or get some unpaid vacations because I'm in debt). Not to mention there can be some unforeseen catastrophes: a former coworker had her money frozen during the bank crash of 2002 (in Uruguay and Argentina), and had her credit card maxed out. She became almost homeless and now swore off credit. Savings work in reverse: they allow you freedom - to take time off, to start your own company or even to indulge. Being generous also feels good. And lastly, the advice about stuff vs experiences posted here and higher in the thread is very good as well. A disclaimer: I don't believe in being a luddite, and there are things I value A LOT - for example, having my own car after not having a car for 28 years - but the marginal improvement from an old clunker to a newer car is nowhere near as no car vs any car, and the same happens for Iphone 3 vs Iphone 4 or whatever - I'm not advocating having no cellphone or car or whatever, only that the difference between brand A and brand X where the price is substantially higher is probably not worth it except as an indulgence.