WWYD? Smaller house / more disposable income?

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We have a very big, expensive farmhouse which is costing a fortune to run (aprox 2000 per month Inc mortgage, oil, council tax). We can just about afford to live here with about £1k left for food & petrol per month after all bills/DDs.

We also have a smaller buy to let house which is let to lovely tenants who have never been late with rent / keep the place clean & tidy etc. The cost of living in this house would be £500 per month (inc mortgage, gas and c tax again).

If we moved in to the smaller house (3 bed, 2 rec, garden) we would have so much more disposable income and I could reduce my hours at work to spend more time with the DC. The 2 DSs would prob share a good sized double bedroom as I would need the box room as a study.

DH doesn't want to move because he can't be bothered. He also says I wouldn't be happy with a
smaller house which I think is unfair as I have really thought it through.

WWYD?

It's not WWID and more a question of reaching a compromise with your husband by the sound of it. I've lived where I do for 21 years, probably have a bigger house than I strictly need which comes with various additional costs, and accept that it means a modest lifestyle. If I simply couldn't afford to live here any more I'd move somewhere smaller & cheaper... otherwise, I think it's worth a few sacrifices in order to be in a good location with a bit of space.

I would take the smaller house in a heartbeat. If it means a simpler less stressful life then do it. I honestly think our kids would all prefer more of 'us' than more house/possessions.

Ironically you're describing my house (that I rent) - I really hope I'm not advising my own landlord to kick us out!

The lack of money can get you down especially when you have a realistic alternative.

We moved from a 3 bed where we had shed loads of money left over every month (which paid for the move) and we moved to a much bigger 4 bed house.

We still have money left over every month but it means it takes longer to save for stuff so it is frustrating but I realise we are still in a really good financial position.

I think you have to think both for the now and the long term, my last house was fine for the "now" as in it was a small 3 bed with 2 young boys. But this house we live in now is great for the long term, my boys are now 6 and 9.

Garden is huge compared to the postage stamp of the last one, we converted the double garage into a playroom so they have loads of space for their toys and games.

It was a win win all round. Clearly you are looking to do the reverse but I think as long as you are realistic about the smaller house, then it is worth considering.

How would it work? Would you let your current house out and keep it as an option, or would you sell it?

Could you sell the rental and use the capital to pay off some of the bigger houses mortgage thus lowering your outgoings?

We would sell the farmhouse but there is little or no equity in it really... The smaller house has about £40k equity but we've already tried to sell it with no luck and we don't want to accept an offer below what we think it's worth (hence renting it out in the meantime while the Market picks up - the rent more than covers the mortgage).

If we paid £35k off our current mortgage I think we'd be £200/month ish better off... Except we wouldn't as we bank £300 a month from renting out the house after the mortgage has been paid :s

"about £1k left for food & petrol per month after all bills/DDs" and "bank £300 a month from renting out the house after the mortgage has been paid." Honey you're rich.

I think you should stay where you are and keep your good tenants in your other property. You have the foundation of such a secure financial future for your DCs with these assets and I really can't imagine that they want for much with the way things are. Also, life is much less stressful for a large family to have that bit more space, it gives you so many more options. Think of all the grandchildren, when they arrive.

However if this is about you wanting to spend more time with your DCs, it is more about negotiating with your employer to get better terms of employment for fewer hours or trying to find an alternative source of income that allows you to spend more time with them while ensuring your financial security.

Children grow up so fast, a blink of an eye and they're moving out so of course you want to be able to spend of much of that time with them as possible, which no doubt your DCs will very much appreciate as well. You need to be clear with your DH about why you want to down size.

I watched a programme about optimising income from an asset, not saying that any of these options would suit you but they suggested, letting out a room to a lodger (apparently there's some sort of government tax breaks available for doing this as well.) Renting out your loft or outbuildings as storage, (as long as they are dry and secure.) Renting out parking space on your drive. Or running a party plan business from home i.e body shop at home etc.

Maybe some of these options will bring in enough money for you to cut your hours but still maintain your financial security.

Good luck, I hope you find a solution that suits you all.

We've sort of got the opposite dilemma. We live in a fairly small house, probably similar to your 2nd house - 3 bed, 2 rec, 1 bath - terraced. Bills are ok:

No mortgage (owned outright),
Gas £80 (could reduce this I guess as it's based on last years winter where I had it on 24/7)
Electric £30,
Water £40,
Council Tax £110
Total= £260

So the basic household bills are a fairly small percentage of income - we have also other expenses like petrol, insurances, food etc. We're able to save a fair whack each month, something like 75% of income excluding pension.

Been thinking of moving to a bigger house as it's getting a little tight here, but also do like the spare cash. We also feel secure as hopefully whatever happens we'd have money to cover the essentials for a long time.

If I were you and the money was causing a worry, I'd move to the smaller house. You can then save to get into a better financial situation and maybe pay the mortgage off or move to a larger house when you want to.

Good luck whatever you do!