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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s episode starts with a discussion about lifestyle creep — how to know if you’re falling victim to it, tips for preventing it and how to spend your money intentionally.
Then we pivot to this week’s money question from Megan in Seattle. She wrote:
Hey Sean and Liz!
Over the course of the pandemic and student loans being paused, I have been able to save up enough to pay off my student loans, about $9,000. Is there anything I should do to get the most out of that money between now and when payments resume? It's in a high-yield savings account. Is there a reason not to pay off the lump sum?
I'm also planning a vacation to Iceland with my boyfriend, and was wondering if you guys have any tips with bundling versus getting everything separately. The airline has some packages with rental car and admissions to some attractions. Seems like the prices are similar, but I haven't clicked through to see all the final prices.
Thank you, Megan
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Lifestyle creep can happen to anyone — no matter their income level. At its simplest, happens when your spending increases as your income does, but you’re not channeling your dollars with intentionality. This overspending can come at the expense of financial goals such as or building wealth. To keep lifestyle creep at bay, try to put the bulk of any raise into savings and know your triggers for overspending to keep your budget in check.
If you’re debating whether to put your pandemic savings toward , know the trade-offs and how the decision would align with your financial priorities. If the debt is a burden you want to be released from, there’s no problem with knocking out the debt. But realize that once the money is spent, there’s no getting it back and you won’t be able to direct it toward other financial goals — like investing or saving up for a down payment on a house.
To book the , shop around and compare bundles versus booking things individually. While some bundles won’t save you money, they can be a more convenient way to arrange your vacations. If you are set on finding the best deals, however, know that you’ll have to do a bit of research. Look online for promo codes and check hotel rates when you’re a few weeks out from your trip.
Have a money question? Text or call us at 901-730-6373. Or you can email us at . To hear previous episodes, go to the