One of the most challenging personal finance issues we all face is an ever-expanding definition of “need.

Things we once thought of as clear luxuries somehow become necessities, often without any consideration of how the change in status happened.

Cars that seemed just fine a few years ago now seem old-fashioned. Remember when the idea of giving a kid a cell phone—much less an iPhone and iPad to boot—seemed outlandish?

Here are some questions to think about:

• What if financial happiness is not about getting more but about wanting less?
• What if things start out as wants and become needs, not because the things themselves have changed but because our feelings about them have changed?
• What if you can never really get enough of something you don’t need?

Look, we all know that the shiny new toy we “needed to have” often ends up in the pile of things we need to sell at a garage sale or donate to charity.

This is yet another example of why personal finance can be so complex—because there’s no definitive list of the 100 things that every family must have. So, these decisions end up being incredibly personal.

Over the years, we’ve gathered a couple of good habits from personal experience and feedback from people we trust to help draw a line in the sand between “want” and “need”. 

1. Don’t buy things immediately.  Sleep on the decision overnight.  Pro tip: This works for e-shopping, too.  Before buying a book on Amazon, let it sit in the cart for at least 72 hours.
2. Implement a “Stuff” quarantine.  Nothing new comes into the house without sitting in the garage for three days.  Then, if you still feel like you need it… it comes in. Otherwise, it can be returned to the store.
3. Use the One In, One Out rule.  For every single thing you bring in the house, one thing has to go out of the house (and not into the garage… far, far away). You can do this with books, clothing, anything.

The important thing is to engage in the process of trying to get clear on the difference between what you want and what you need.  Put some space between yourself and the impulse to buy and use that space to reflect.

We hope these tips help.

Your Eagle Wealth Team

P.S. Want to learn more about minimizing?  Check out this quick Ted Talk about How Less Stuff Can Lead to More Happiness.

Leading a Healthy Life Can Save You Money in the Long Term

• Consumption-related vices like smoking, drinking, substance abuse, and drinking soft drinks don't just harm your health; they're also costly.
• Eating well will also save you money — when you don't pay attention to what you're eating, you often end up spending more.  On the other hand, planning homemade meals made with raw, healthy foods can actually work out less expensive. 
• Living a healthy lifestyle can also impact your medical costs, as well as your life insurance policy costs, as you're less likely to develop medical problems.

The Week on Wall Street

Growing concerns about further interest rate hikes, prompted by fresh economic data, reversed early-week gains and left stocks mixed for the week.

The Dow Jones Industrial Average slipped 0.13%, while the Standard & Poor’s 500 fell 0.28%. The Nasdaq Composite index advanced 0.59% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.52%.^1,2,3

Rate Concerns Weigh On Stocks

Stocks opened last week higher on investor hopes that a continued cooling in inflation might support a more dovish Fed. A higher-than-expected rise in the Consumer Price Index (CPI) and strong retail sales in January initially did little to dent that enthusiasm, as stocks posted solid gains through Wednesday’s close.

But that optimism faded on Thursday as a surprising rise in producer prices and another decline in initial jobless claims triggered worries the Fed would stay the course for longer. Comments from two Fed officials supporting a more aggressive rate hike stance added to the unease, erasing much of the week’s gains. Stocks ended mixed on Friday, capping a choppy week.

Inflation Moderation Pauses

Consumer prices climbed 0.5% in January, fueled by rising shelter costs and energy prices. The increase in the CPI was higher than the 0.1% rise in December and slightly above the consensus estimates of 0.4%. The year-over-year inflation number (6.4%) came in lower than December’s 12-month rise of 6.5%, making it the seventh consecutive month of declining year-over-year inflation.⁴

January’s product price report showed a surprise 0.7% increase, higher than the 0.4% rise expected by economists and the biggest jump since June. Year-over-year, producer prices rose 6.0%, a slight improvement from December’s number.⁵