<prompt> Human: Early 30s, married with a one year old. We live in a quite small house, 1400 sqft including the finished basement. Its rather poorly laid out, with small bedrooms and a lot of wasted space. We have been there 5 years, and love the community, also it has incredible panoramic views of lake superior, something that we arent keen to give up. The issue is, it feels cramped now with one child and two dogs, and my wife is adamant we have a second. Im not putting it all on her, I want another as well, but she is unwilling to accept the fact that we may not be able to afford two. Anyway - not to turn this into rrelationships - we can afford two kids, but not if we go and buy a much bigger house. We currently owe 190,000 on our existing mortgage, the house is valued around 240,000 but we are in a terrible neighborhood for home sales, things tend to sit on the market for over a year here. If we list it, we may not even be able to sell it, but if we did, I dont know if its wise to go ahead and purchase a bigger house 300,000 or if that is foolish right before taking on the extra expense of a second child. For example: Combined annual: 130,000 Monthly net: 5700 canada, also a large portion of my income goes to bonuses and stocks, not shown here Current mortgage w tax: 1000mo Childcare for one: 800mo Right now things are tight. Even in this small house. Part of that is we live outside the city and commute, lots of car expenses and gas expenses. Also we arent the most frugal right now, that can change. What I cant wrap my head around, is going to a much more expensive house 300k vs 190k mortgage and also doubling our child care costs. It seems like a double whammy destined to make us house poor and miserable. Should we be able to afford a bigger house and two kids? Am I just that bad with money that I need to budget to make it work? Or is it smarter to stay in the smaller house and just make that with with various home improvements to maximize space? I see friends who have 2-3 kids, two new cars and much bigger houses than me, and I know for a fact I make substantially more money than them, yet I struggle to see how I could afford the same. Is everyone just living on credit and hiding it? Sorry for the scatterbrained questions, just have a lot on my mind. Assistant: Or is it smarter to stay in the smaller house and just make that with with various home improvements to maximize space?Almost certainly. Increasing your mortgage by 50 when things are already tight is not a good idea.Have you looked into home renovations as an option? 1400 sq. ft. isnt big, but its not that small either. Depending on the configuration of your house you may be able to add an extension or reconfigure some walls to make better use of your space.Human: We had plans for a big addition this year but the bank shut them down because the estimated value after the rennos wasnt high enough to get the mortgage. There are a handful of improvements that we have planned if we did stay, things like building a shed for external storage, remodeling a small bathroom into something bigger, and moving into the finished basement not a popular idea but a lot of wasted space is down there.Assistant: Why dont yall want to utilize the finished basement? Is it a livable space with windows?Human: We do want to use it, in fact my wife and I were planning on moving our bedroom and the kids room down, theres just a bit of a stigma about living in the basement. Its a walk-out with big full sized windows and nicely finished.  <response>: You arent living in the basement of your parents house. You are utilizing all of the space your house has to offer. Theres a big difference between those two. 