<prompt> Human: Hi there everyone,Im a long time reader with a throw away account for this post...Can we afford to purchase a 1.5M home?Wed like to send our kids to a better public school, and in Southern California that basically means buying a more expensive house or private school. Wed prefer a great public school over a private school which itself can be 12k-35kyear.Weve studied 30 elementary schools in our area and have toured about 12 now, and without exception the better neighborhoods have much smaller class sizes, higher test scores, more programs, and better facilities.Anyways, my stats:- In our 30s, married, 2 little kidsAssets:- Own our current home outright and could probably sell it for 450k. Lets say its 400k after closing costsetc.- 514k in cash- 278k in short term investments brokerage account- 130k in 401k IRA- 12k in 529s for the kidsDebts:- -160k 2014 taxes. I expect a big tax bill this year because of some business transactions.- -17k vehicle loan 0 interest- -2k regular credit card chargesIncome expenses:- My take home salary is 200kyear and that ends up being about 9kmonth take home after taxesmaxing out our 401ketc. My wife currently stays home with the kids.- Our regular expenses food, utilities, property taxes, gas, eating out, fun, etc is probably about 3kmonth but honestly this varies greatly and I dont have as good of handle on this as I should. In general we are pretty frugal relative to our income and are definitely cash flow positive every month.- Ive ran my own businesses for the past 15 years or so, and my income has been hugely volatile. The last year or so has been good, and I actually expect the next year or maybe many more to go well as well, but who knows...So we could sell our house 400k and put nearly all our savingsshort term cash 792k minus 160k tax debt minus 50k emergency fund 582k into a down payment 1M down payment. Then take out a 500k mortgage. Note, one of the homes we are actually considering now is only 1.2M, but needs a ton of work probably 200k-300k in work; its a dumpy million dollar southern California tear down. So then wed be left with:- 50k emergency fund- 130k in 401k IRA- 12k in 529s- 9kmonth after tax income- 2,600mo mortgage 1,300mo property taxes ! 3,000mo regular expenses that may be a little higher with a bigger home 6,900mo.So, we can technically afford it, but wed obviously be stretched much, much thinner than our current situation where we basically have zero money worries and its quite nice. And if business is bad for a year or two as has happened in the past its no big deal. But I honestly wouldnt feel very good about sitting on a bunch of cash and sending my kids to a not-so-great of school. Moving far away to a cheaper area with good schools isnt really an option because a my business is here and b we like it here.I dont want this to come off as another one of those Im 25 and not sure how to invest my 300kyear salary, but I would love to hear some feedback as I know there must be many others out there in a similar situation as mine. And I know my wife and I are doing pretty well, but its amazing how poor we still feel in southern California.UPDATE: follow up here with more math:  <response>: Let me offer an alternative.Sell your home, and Rent in the desired area. With a million dollars in investments and liquid asset, you can generate a good cash flow to make the rent payments. This would also allow you to switch school districts if necessary. As some other posters alluded to, a good district for Elementary school is not necessarily the same for HS. Source: Done it in NorCal. 