So, the heaviest question to talk about has been:
Can we move into a smaller house? The answer isn't easy. Of course we can. But, wait. Maybe we shouldn't.
We want to simplify. We want less stuff. We want fewer responsibilities. But we also want to be smart about this. We still have two kids here at home, and they're getting bigger. They have friends, and STUFF. I work from home, and I need a little studio space.
When we got married almost exactly 18yrs ago, we went on our honeymoon and then a week later, closed on our first little house. Doing all the work ourselves, we fixed it up over several years and sold it for nearly twice what we paid for it. That made for a great down payment on our current home into which we lucked for an excellent price. (For reference sake, our house is about 2450 sq ft, built in the early 50's, always in need of some sort of repair, comfortable but not at all fancy.) And again we've slowly updated it, mostly ourselves, over time. It's worth quite a bit more than we paid for it, even after the big housing bubble burst. Plus, we refinanced to a fifteen year mortgage several years ago to a nice, low rate. We have about 10 years remaining on our mortgage. For folks with moderate income, we've made some sensible housing decisions, and I think it's paid off.
SO... when thinking about downsizing to a smaller home, it has to be financially beneficial. If we move, we'd move a little closer to the kids' schools. When we look at smaller homes to purchase, in the neighborhoods we want to be in, they cost roughly the same (or a little more!) than what we'd get for ours. So it would put us no further ahead financially and with the probable loss of closing costs, for a 3 bedroom, 1.5 bath home that may need some work. Hmmm...? Heating and cooling bills could be less, but in the neighborhoods we like the taxes are more. I just don't think it's worth it. I'm not saying if the perfect home appeared, we wouldn't consider it, but it would have to be quite a deal. We will keep our eyes open though.
For now after much discussion, we've decided until the perfect situation appears, we're staying put. We're close to my parents, and we suddenly have great neighbors. That is so fun!