Paige is a supervisor at UPS. She just got a big promotion and went from working part time for $20,000 a year to full time for $55,000 a year. Her new manager tells her,

“You should live like you’re still making the part-time income for two years and save everything else. You’ll thank me when you’re my age.” Should Paige follow her manager’s advice?

Study Problems Learning Objective 13.1 Understand how consumption and saving vary with income.