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Be Creative
Most of us want more space than we have. We hit the listings in pursuit of our bigger and better place. I say slow down and take another look. How about dreaming of turning what you have into what you want—that is, renovating rather than moving? It can make great financial sense. For instance, if you bought a house or refinanced a mortgage in the past few years, trading up now for a new home would push up the interest rate on the loan.

Add to that the commission to the broker who sells the old place and the closing costs on the new one, and you're talking serious outlay. And don't forget moving costs, or the fact that a more expensive house means higher property taxes and insurance. Not so dreamy after all, eh?

So before you make the open-house rounds, sit down right where you are and consider what you have. Do you really need a new house—or would the problem be solved by a beautifully redone bathroom or an extra bedroom for guests? Renovating rather than relocating can be the smarter financial move, with one caveat: Don't go too far beyond the neighborhood's basic level, upgrading to the point where you have a Taj Mahal bursting its boundaries on a block of ranch-house subdivisions.

The rule still applies. Go for what you want, but don't go overboard. Find your practical dream.