I have observed that if you increase your needs, the new 'increased need state' becomes your new norm after a while. For example, if you didn't have car before but then you purchase it, use it regularly and then when you don't have it anymore — you'll miss your car, you'll feel like you can't live without it even though you managed to live without it before.
Do you agree with this observation? Would you agree that it's better to not increase your needs in first place?
Needs increase when we start to need something and it cannot be bargained for at all. Like when we still have 1 child, we can still travel with our wife and child on a motorbike. But when we have 3 children, we can no longer use motorbikes to travel together. But at that time we needed a car to be able to travel together.
I think you probably mean lifestyle?
Regarding lifestyle, the answer will indeed be better if we don't increase it beyond our capabilities. It's better to keep living simply even though our income continues to increase.