Throughout the week, I receive many questions on mortgages and other economic topics. Some of the questions make me think and some even turn into articles like this one.This time the question was:We live in our apartment without a mortgage. My wife buys clothes for hundreds of shekels every week. Instead of spending a fortune on clothes that are barely worn, wouldn't it be better to take out a mortgage, renovate the apartment, and pay 2,000 shekels a month on the mortgage instead of on clothes?First, thank you to S for the interesting question. General comment: The tone of this article is a bit too chauvinistic, and I regret that. I tried to word the article in an egalitarian way (shirt for a man, dress for a woman / gadget for a woman, shoes for a man, etc.). This came out clumsy and not understandable enough for my taste. In the end, I answered the question as it was asked. I see many couples where the roles regarding looking at the family's income and expenses are reversed, and I have a similar article about Replace the car or pay off the mortgage. Please take my word that the article reflects an answer to a specific question and not my personal opinion on gender differences one way or another. In any case, the principles stated above are the important ones, not any particular example. Spend on shopping or invest?The assumption implied between the lines of your question is that clothes are a waste, while moving to an apartment with an extra room is not a waste.I do not share this assumption. For me, needs are needs, whether it's for a room or a dress. Consumption has a primary purpose of acquiring basic means of subsistence (flour, water, tomatoes, and electricity) and then providing pleasure (yoga class, mango, a new dress, an additional room). If this reminds someone of Maslow, This is probably not a coincidence; that thought also crossed my mind.If you think there's a problem with the priorities of family consumption, the solution is dialogue and a revised plan. Forcing an external factor, such as a mortgage, which would make it impossible to buy dresses due to mortgage payments, is doomed to complete failure from the outset and, in my opinion, will lead to one of two bad outcomes:Your wife won't buy clothes, but the desire to buy clothes will translate into frustration. I see couples who earn well but make poor financial life plans and feel that despite their high incomes, they are required to count every shekel of expenditure. The frustration leads to stress, poorer health, and a less good family life.Your wife will continue to buy clothes exactly as before. The fact that there is an additional expense of 3,000 shekels for the mortgage will not change anything. Note that the bank will not do what a conversation between you two will not do. The bank will not stop the shopping until it is too late. Please pay attention to the two screenshots taken from the website of Bank Hapoalim, where I manage my checking account:Do you think a credit limit of 90,000 has exhausted what the bank is willing to give me to earn interest from me? God forbid, if I press the red button... Well, the bank certainly didn't plan for that when they painted the button red, but this is the button that could mark for you The nuclear Holocaust of your family economy. Clicking it will take you to the next destruction screen:From the combination of the two screens above, one can learn that Bank Hapoalim will allow me to incur debts of 230,000 shekels even before I speak with a banker for the first time. All this easily and "instantly," only through the internet. You can buy a lot of clothes for 230,000 shekels. Meaning, if someone needed to buy an outfit every week, adding a mortgage of 3,000 shekels, for example, would not eliminate this need and would simply worsen the family's cash flow (income versus expenses) and put us into debt, which the bank will not prevent, but rather, will encourage us to incur more debt in order to increase our interest payments.As a side note, I must mention that I love the bank's humor: "You can repay the loan starting tomorrow at any time you choose." As if, if I could repay the loan at any time, I probably wouldn't have taken it in the first place. And that reminds me of This conversation where they tried to sell me a loan. What is recommended, then?We saw why external pressure is not a guarantee of a change in consumption priorities, or conversely, that changing priorities due to external pressure will lead to dissatisfaction, frustration, and an unhappier life. Managing our household finances should be like managing a business. It's amazing to me to see people who manage millions in budgets at work but think the method is different at home. It's exactly the same. The management team (you and your spouse) needs to sit down for a work meeting and decide how much money is allocated to each type of consumption and investment. A kind of "shortcut" like, "We'll move to a new apartment, and then with the mortgage, she'll have no choice but to stop buying," will not bring happiness at home. Think external pressure is still a good way to go? Instead of creating pressure through more consumption, which will further increase your expenses (a larger apartment also means higher property taxes, electricity bills, etc.), do it through investment: set up a standing order for monthly savings. Pay attention! You only save when you have money. Transferring money to savings from an overdrawn bank account is a serious and expensive mistake. In love with the idea of a mortgage as a kind of gatekeeper against wasteful spending? Instead of taking out a mortgage for an extra room in your house, take out a mortgage to buy an investment property. That way, after a few years, once the mortgage is paid off, You will have additional income. For example, if you receive rent of 2,000 shekels, that's much better than a 2,000 shekel salary increase: This is tax-exempt, unlike wages, on which you would pay approximately 30–50% in taxes (Social Security + income tax).This sum will enter your account every month, even during periods when you are not working. You can also view this sum as partial insurance against loss of earning capacity or simply job loss.In summary I don't believe there is good consumption and bad consumption. The decision of what the family spends its money on should be made by both heads of the household and not by an attempt to force it through external pressure such as a mortgage. Do you want to create an external commitment to reduce current consumption? Create a commitment to investment, not consumption.