(NYTIMES) – Home has become work and school for millions of people. Many residences needed to somehow shift overnight to accommodate two workplaces and multiple classrooms because of the coronavirus.<\/p>\n
With schools and businesses signalling that these conditions will extend for a while at least, it’s no surprise there is a stampede of people seeking more space. But when so many are acting on instinct, the best move may well be to slow down and ask some questions.<\/p>\n
Should the house you’re thinking of as a starter home be your forever home instead?<\/p>\n
This is a tricky subject, like many of the biggest questions in personal finance, because of the complex stew of money and feelings that are involved.<\/p>\n
First, the money. A home is an asset with a value that could make up a substantial part of your net worth. Hopefully, that value grows over time. And right now, with mortgage rates at record lows, it’s tempting to go as big as possible.<\/p>\n
But there are other things you could do with any extra money that you might otherwise put towards a bigger or better home.<\/p>\n
That incremental amount could go into retirement savings instead or a college savings plan. Or you could give it away to people who don’t have the luxury of contemplating these sorts of trade-offs.<\/p>\n
A more modest home can leave more money in the budget for travel, expensive hobbies or a getaway abode by a lake or mountain. Living smaller also helps the environment.<\/p>\n
Now, those emotions. Spending more for a bigger dwelling doesn’t make sense unless there is a high psychic return on the extra space. But if you’ve never lived bigger, it’s hard to predict how much happier it will make you.<\/p>\n
Consider maintenance costs, too. A newer home – say, less than five years old – might require just 1 per cent of the purchase price in annual expenses, said Mr John Bodrozic, a co-founder of HomeZada, a tool that helps owners keep track of costs and improvements.<\/p>\n
But if your home is 25 years old or more, 4 per cent is a better estimate. If history is any judge, putting money into stocks over periods measured in decades should yield a better return.<\/p>\n
Mr Joe Chappius, a financial planner, suggested one basic strategy: consult a few elders. Find someone you trust who upgraded 10 years ago, Mr Chappius said. Very few of his clients who did so now think it was the best financial decision they ever made. More often, they have two rooms they rarely use.<\/p>\n
A financial professional can also help you prioritise, including getting you and your spouse, if you have one, to agree on goals and dreams – and what’s worth sacrificing in the present to achieve all of the former and reach for some of the latter.<\/p>\n
For any given trading-up transaction, a client might need to move more money per month to the housing budget. What might that mean right now? Perhaps it’s just a severe reduction in travel or eating out. But if money is already pretty tight, it could mean that no saving for a child’s college can even begin.<\/p>\n
“The thing about Covid-19 is that it’s hopefully a short period, but it really puts a very fine point on the need for flexible spaces that can do double duty,” said Ms Sarah Susanka, who has been preaching that gospel ever since 1998, when her book The Not So Big House came out.<\/p>\n
Ms Danika Waddell, a financial planner in Seattle, suggested another framing question: What might you regret if you stay small? Get granular here and think beyond the coronavirus pandemic, if you possibly can.<\/p>\n
Is your love of hospitality and large gatherings one that you would act on frequently? Hosting Sunday supper each week in a newly oversized great room can bring joy beyond measure. But maybe you’re just letting your desire to host a few holidays each year dictate your feelings about a major real estate decision.<\/p>\n
If you’re a parent, are you fine with your house not being the place where the gang gathers? And when relatives come to visit, will you regret having to put them up in a hotel? Maybe not. But if you want them around for an entire season each year, for many years to come, the bigger house could make sense if you are certain.<\/p>\n
“The people who are generally the most happy are the ones who avoid the more, more, more and understand what is enough for them,” said financial planner Jeff Wolniewicz. “That takes courage, to stand firm on what your enough is, especially if it’s in contrast to what the world says you should want more of.”<\/p>\n
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