From Here to Financial Happiness

Day Fifty Needs First, Wants Second

Can you afford the house of your dreams? Do you have the wherewithal to pay for your children's college education? Is it financially prudent to take the two‐week European vacation? I'm not here to tell you how to spend your money. As far as I'm concerned, you can use your dollars however you wish – as long as you're taking care of your future self and those financially dependent on you.

That means making sure you save enough each month for retirement. You also need at least four other tools in your financial toolbox: an emergency plan in case you lose your job, health insurance, disability insurance if you have less than $1 million in savings, and term life insurance if you have less than $1 million in savings and a family that depends on you financially. Got all that nailed down? The other financial choices are all yours.

With any luck, once you've taken care of your financial needs, you'll have some financial wiggle room – and you can devote dollars to things you want. That's why we've spent so much time focusing on what you enjoy most about your daily life and what you want from the future.

So what do you value? Some folks will want to use their financial wiggle room to buy a home or even a second home. Others will want fancy colleges for their kids or fancy cars for themselves. Yet others will want to devote their spare dollars to special trips or a more lavish daily lifestyle. None of these is a bad choice – as long as they are what ...