Stay or Move to save more?

Folks,

I'm currently in a house that is way bigger than what I need. I can move into a house that will reduce my expenses by nearly $1000 a month.

I can afford that $1000 a month, but obviously that would go towards saving if I wasn't spending it.

Of course, if I stay in the more expensive house and house prices go up, I'll have more money "saved" in the future.

If prices stay flat or go down, well that's REALLY bad if I stay.

What I need to balance this against is the realtor fees, moving expenses, etc. that come into play for a move.

I plan to stay in this next house until my youngest finishes high school in about 8 years.

I've plugged it into a spreadsheet, and if house prices go up 3% a year (kinda high) and I stay in the next house at least 4 years (very reasonable), I just about break even.

Short answer is, the spreadsheet is indicating move.

However, I'm having a hard time with:

1) Ugh, moving.

2) Wasting money on realtor fees, moves, etc.

Thoughts?

Thanks in advance!

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  • Hi Ricardo Diaz !

    I hope you don't mind if I tackle this from a (slightly) less financial view! :)

    Since you said you can afford that extra $1,000, I think it comes down to if you want to. Do you want to move? Is the extra $1,000 you're paying because of the location? What about amenities? If you move, are you moving far? Would your youngest need to switch schools? Would the drive to school or work be noticeably impacted? What about other day-to-day activities? You don't seem too tied to the house, will future you thank you for having made the move? If so, is that thanks because you can pad retirement accounts at a better rate, pay off debt faster, or something else entirely?

    As for selling, where do you stand with your current house? How much equity do you have? Can you sell the home for enough to cover those fees? Moving is known as one of the most stressful life events, so while moving can definitely be the right decision in some cases, it's important to consider even the minor things. :)

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    • Faness 

       

      Lots of great questions, thanks for the thoughtful reply!

      1) Don't *want* to move, but will do it if I can save more money for kid's college.

      2) Extra thousand is due to 1200 extra square feet :) 4 of us in a 5 bedroom, 5 bath house, we'd be downsizing, but still very comfortable in new home.

      3) I lose a pool and tennis courts, not ideal, but not a big deal.

      4) No, moving less than a mile away, no school switching, I work from home.

      5) No debt other than house, socking away max in 401k and then some.

      My biggest thing is I really don't need a house this size, and I can't see myself needing a house this size ever again.

      It feels particularly wasteful, and I'd love to be able to put more away for kid's college since I'm set up in other areas well.

      I probably need to at least defer the decision some to get to the right down payment, although ironically, if I moved, I'd be able to get to that down payment twice as fast :)

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  • Sell it and move to a less expensive house. Assuming you have enough equity in the house now to cover the transaction costs, you aren't losing anything except in your head. The house you live in is not an investment, it's a place to live. Every house will have to be sold someday and there will always be transaction costs.

    Also, we're in a rising interest rate environment, so assuming you'll need a mortgage, the sooner you move, the more you'll save in interest over moving later (and if rates go down later, then you just refinance to a lower rate).

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