Make it work or upgrade?

So, several years ago when I first started working, I bought a 4 bedroom, 2.5 bath, 2000 sq. ft. house for $164,000. A few years ago, I refinanced to a 15 year loan, and I am on track to pay it off in the next five and half years (the idea being to use what was going towards the mortgage for college for my kids since I would be debt free). Now the problem. I have five children, and the house comes with very little storage space. I have my twins sharing one bedroom, my older two boys in another room, and my daughter in her own room. None of the bedrooms are very large. The older boys' closet is filled with food storage, since we didn't have anyplace else to put our year supply, and we actually turned our master bedroom into a toy room. Our bedroom is upstairs in the loft. We feel like our house is way too cluttered and may be too small for our needs, though both my wife and I recognize that it is bigger than the house that either of us grew up in. My wife's family consisted of four children, and we had 10 in our home, though rarely more than eight at a time.



We have considered installing built-in shelving for the master bedroom to organize the chaos of the toyroom and finishing the space above the garage for storage--there would then be plenty of space to fit our year supply, as well as other storage. That would probably take care of the cluttered feeling. The other option, of course, is to upgrade to a larger house.



My salary has practically doubled since I first bought my house, so right now, I currently have about $900 in discretionary income every month (meaning I can save it or spend it--it isn't part of retirement savings or allocated for any other expenses). Upgrading to a larger house would use up most of that discretionary income.



If it were you, would you continue the plan to be debt free in five years (do the built-in shelving/finishing the attic), or would you upgrade to a larger house? I go back and forth on it because I want my wife to be happy, and I can tell she is very overwhelmed right now. I value some fresh perspectives.

Tough call. Living debt free would be so incredibly fantastic, but living debt free with a frustrated wife and incredibly cramped living conditions certainly tempers that.



Has your wife talked about which she would prefer? The other side of getting a bigger house with more space is that we tend to fill up that space and end up just as cramped but then have more area to clean which can be more frustrating.

FWIW - If it were me, I'd make it work and pay off the house. My family is in a 1400 square foot house (my kids are 14 and 16 and this is the only house that they have known)The way that we make it work is to get rid of stuff all the time. We donate all old clothes and toys to the DI trailer every time it’s in town, we put stuff we never use, but want for keepsakes in the rafters. We actually have both of our cars in the garage every night. Our storage shed in the back yard is invaluable for keeping not only the camping gear, but also the yard maintenance stuff as well.



As with you, food storage is throughout the house - under our bed is two layers of number 10 cans hidden by the bed skirt. Both children have foodstorage in thier closet to go along with their clothes. And the majority of the food storage is in the office closet.



My experience is that one can never get enough house. No matter how big of a house you get, you’ll need more room later. To me the solution for not enough room is usually to eliminate stuff; not get more room.



That said. I watched my dad spend tons of money on renovating our house growing up, only to have my mom decide after all of the work was done, that it wasn’t her dream house anyway. They’d have been better off moving when Mom was done with the house rather than trying to make her like it. So my experience is that if either parent is done with the house, cut your losses and move. But if you can make it work, do it. Especially when if the problem is space, you’ll never really have enough of it anyway.

Get debt free.

We remodeled, adding two rooms and a large closet for storage along with a shed for food storage stuff and that worked well for us...It was not as nice as a newer, bigger house, but less money and debt. No matter how big a house one gets, one seems to fill it in time...I think that is an unmmutable law of the universe

It's a wonderful blessing to be debt free. Cougarfan, this following is in no way a reference to your wife but I consider it as humorous as a lot of my students were. A couple of years ago my finance guy said he knew a guy that was making at least $100,000 and had a house of over $200,000 both of which is way more than what I make and the worth of my trailer house. He said I wouldn't want to trade places with him. I don't have a wife so I said in jest, I'd have to see his wife to see if I would do this. He looked at me and said, "You wouldn't want to trade places with him". I'm still not in debt.

I am debt free and I love it. We worked hard a number of years to get there. We refinanced when rates dropped (twice) and made extra payments to get there. I'm 52 and I could retire if I wanted to. We would have to cut back quite a bit but it is possible. I like what I am doing so it is not an option right now. A couple years ago I asked my wife if she wanted to move into a bigger house. She declined. Even though we have only one bathroom.



Now if you can find a bigger house that is a great deal, it might not be a big hit to your debt load. Rates are really good right now.

You could probably upsize your house and preserve your $900 discretionary buffer.



If you are on track to pay off your 15-year loan in five years, you could probably purchase a new house the size/area you want on a new 15-year loan with payments about the same as what you are paying now with your accelerated payoff schedule.



My advice is to get the real numbers, that is, talk to a recommended realtor and mortgage broker and find out what rates/payments would be for the type of house you are looking at. As long as you keep it in the hypothetical realm, your answer will always be hypothetical and therefore feel unresolved. If you get your real numbers, then you can figure out exactly what you can/can't live without.



Personally, I'm a strong believer in the debt-free philosophy, with the exception of a 15-year mortgage that is no more than 60% of the appraised value of the home and fits easily within your budget (leaving room for savings/investment).

Thank you all for your feedback. After speaking with my wife about it, we are going to try to make it work. She likes the prospect of being debt free in a few years and spending more of our weekends doing fun things. If it doesn't work in a few years, we'll have a bigger down payment on a bigger house. Clutter is the main problem, and that could continue to be a problem even in a bigger house.

Could you add storage someplace? If you have a garage, could you build a loft and store things there? Add a shed?

scott715 wrote:
Could you add storage someplace? If you have a garage, could you build a loft and store things there? Add a shed?

That's what we are planning. The space above the garage can be finished, and we can add a doorway through the twins' bedroom. That way it will be a much more convenient storage space--similar to a step-out attic, but it will be a step-out finished room about the size of a one car garage. We have a two car garage which we normally keep our cars in, but the slope of the roof tapers in such a way that the space above the garage is about the size of a one car garage. Still, that will take a tremendous load off the rest of the house.



I read an article that said you should put anything you don't use regularly in storage. Once we finish that room above the garage, my plan is to go through the house and put anything we don't use regularly in that storage space...in an organized fashion. Getting rid of all the equipment that comes with babies should help too.



My wife likes our house. There is plenty of natural light, which we don't find in a lot of houses. It has some good size windows that are situated perfectly to catch the rising and setting sun. I am grateful she wants to make it work.