- My family of four lived for three years in a 900-square-foot home, where our monthly outgoing expenses were about $US1,100.
- When we moved to a 2,700-square-foot home in rural New Hampshire, our net outgoings stayed almost the same.
- Renting out our first home for a profit helped us counteract the higher mortgage on our second home.
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For three years, my family of four squeezed into a 900-square-foot, one-bathroom house. Most of the time, that was manageable, but other times it was challenging, to say the least. I’ll spare you the details of the weekend when all family members had a violent stomach bug. Suffice to say that one bathroom was not enough.
Then, there were the months when my husband was working the night shift, and I spent way too much money taking my daughter to activities outside the house just so he could sleep in peace for a few hours.
By the time our second child was walking, we knew that we had outgrown the space. We were able to move to a 2,700-square-foot house in a rural New Hampshire town with a much nicer school district. In the new house, we had three times the space, but our outgoings stayed almost exactly the same.
Here’s how we pulled it off.
Our monthly home expenses
At our first home, our monthly living expenses were $US1,109. That included:
- Mortgage, with taxes: $US630
- Utilities (oil, electric, internet, trash removal): $US464
- Water and sewer: $US75
At our new home, our personal monthly expenses are $US1,914. Those include:
- Mortgage, with taxes: $US1,430
- Utilities (oil, electric, internet, trash removal): $US484
- Water and sewer: $US0 (We’re on a well and septic system)
We also maintain our first home, which is now a rental. That nets us about $US500 per month in profit. Here’s the breakdown:
- Mortgage: $US630
- Home equity loan: $US270 (we used this loan to fund a down payment on the new house)
- Trash, water, and sewer: $US135
- Insurance increase: $US8
- Total expenses: -$US1,043
- Rental income: $US1,550
- Net profit: $US507
When we moved, we increased our net outgoings by $US805. However, when you factor in the $US507 each month in profit we make from our rental, we’re only paying $US298 more to live in triple the space, in a much nicer area.
The hidden factor: tuition
I would gladly pay that $US300 a month to have triple the space and two appreciating assets (our homes). Still, there was another factor that made moving a wise financial choice.
My old town didn’t have any public preschool options, so I had to pay to send my daughter to either preschool or daycare. I found a wonderful private elementary school that had a preschool program that cost $US700 per month. If we had stayed in that town, which has a troubled public school system, I would have kept her in private school, paying at least $US700 per month.
However, we were able to move to an area with a thriving public school system. Now, I don’t pay any monthly tuition expenses. That returns $US700 into my budget each month. In short, we’re $US402 a month better off living in our new home than we would be if we had stayed in our old city.
Obviously, there’s a lot of privilege in being able to choose whether or not to send our daughter to public school. But the reality is that our family would still be spending big on tuition if we hadn’t moved.
How we kept costs low
Renting out our first home at a profit is the biggest factor in being able to move without increasing our monthly expenses much. But we made other choices intentionally to keep our costs low. Those included:
Shopping for foreclosures
By buying a foreclosure we were able to purchase a home for under market value. That let us stretch our budget and find a house that is bigger and nicer than we otherwise may have been able to afford through private sale.
Selecting an efficient house
Although our new home is three times larger than our first place, our heating and electric costs are the same, or even slightly lower (our utilities overall went up a bit because trash collection is more expensive here).
The new home was built in the 1980s and is very well-insulated, with modern LED lights. That makes it much more efficient to run than our first house, which was built cheaply in the 1950s.
Most of the time it’s true that upgrading your living situation will increase your costs. However, with some creative or non-traditional choices you can minimise the financial impact. We ran the numbers obsessively before we moved to be sure we were getting the deal we thought we were. Now we’re enjoying much more space, without breaking the bank.
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