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”.
- 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.
- 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.
- 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
There are a lot of different ways to save money. Beyond the obvious, like good financial planning, there are other factors that influence both your financial and physical health for the better.
Consider these lifestyle choices to help your body and your pocketbook:
Adapted from BusinessInsider.com
- 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
THE WEEK AHEAD
KEY ECONOMIC DATA
Tuesday: Purchasing Managers’ Index (PMI) Flash. Existing Home Sales.
Wednesday: FOMC Minutes.
Thursday: Jobless Claims. Gross Domestic Product (GDP).
Friday: New Home Sales. Consumer Sentiment.
Source: Econoday, February 17, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
COMPANIES REPORTING EARNINGS
Tuesday: Walmart, Inc. (WMT), The Home Depot, Inc. (HD), Palo Alto Networks, Inc. (PANW).
Wednesday: eBay, Inc. (EBAY), The TJX Companies, Inc. (TJX), Nvidia Corporation (NVDA), Diamondback Energy, Inc. (FANG).
Thursday: Block, Inc. (SQ), Pioneer Natural Resources Company (PXD).
Friday: EOG Resources, Inc. (EOG).
Source: Zacks, February 17, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Disclosures and Footnotes
Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance.
1. The Wall Street Journal, February 10, 2023
2. The Wall Street Journal, February 10, 2023
3. The Wall Street Journal, February 10, 2023
4. The Wall Street Journal, February 7, 2023
5. IRS.gov, October 20, 2022
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Copyright 2022 FMG Suite.