I used to own a D40, I sold it and bought D300s (-: so you can always save some money and buy your new toy! (-: I still use an 18-55mm, a basic one from Nikon - actually only for wide angles but I think the basic lenses are perfect if you don't have much money OR if you own one already.
Of course I could save some money for better equipment, and I'm sure my photography would improve because that. But I must admit I have other priority's now. In about half a year I'm going to start working as I am graduation from university. That should generate some nice income
So in the future, who knows
And for now I'm quit happy with my gear. Although I do have to admit, always a bit jaleous of people who have better equipment But ofcourse it's my own choice not to save for it