March 28, 2013

Cost Benefit Analysis - Vacations vs Bigger Home

Cost - $3600 (cost of our most recent vacation)

Choice A - Increase our mortgage by another $300 per month to be able to afford a bigger house
Total Annual Cost: $3600
1. More room for storage, house looks less cluttered
2. More space for kids to play
3. Little Ripples and Baby Ripples get their own rooms

Choice B - Take family on a nice vacation
Total Annual Cost: $3600
1. Family
  • Reconnect with partner
  • Strengthen relationships with children
  • Create memories
2. Learning through new experiences
3. Trying new foods
4. Relaxing - allows you to mentally and physically take a break
5. Being away forces you to focus on yourself and your family away from all the normal everyday complications of life.

OK, so this is a very simplistic cost benefit analysis. And there is a lot left out, like the extra expenses a house will incur and there is definitely some stress related to travel with young ones and coordinating everything.

But when I try to explain to my daughter why we don't have a big house like one of her friends or whatever the new expensive toy is that everyone is buying, I hope that I am impressing upon her an understanding of why we choose to spend our money the way we do.  Everyone has things that are important to them, and in our family, we make the conscious decision to save money and spend less so that we can do more.


  1. When was your last vacation? Are you saving up for the eventual move to a larger home? Explaining financial decisions to children can be difficult, but I like your approach so that your daughter doesn't feel like she's being deprived.

    1. We went on a cruise in January and had a blast. People always ask us if we are going to buy a bigger home since we only have a 2 bedroom condo and 2 kids. But to me its not worth it. We live in a great location and our mortgage is less than most peoples rent. Because of this, we are able to take 1 or 2 nice vacaions a year. The experiences are worth more to me than having a bigger house.