t's bound to happen. That lovely just-right-for-us beauty is no longer the apple of your eye. Is it time to trade up?

The right answer depends on wise money management and sound lifestyle choices. Dollar for dollar, an investment in the stock market will likely bring you better returns than even the most elegant trophy home. Still, you want to be comfortable in your home today and prepared for tomorrow. Here are the steps to take to put things in balance.

Make a list of why you want to move. Moving is very stressful. Don't take it lightly. Even if you have a lengthy "wish list," it might be smarter to remodel than to move. Marginal decisions should certainly fall on the side of staying put, especially in a financial environment where real estate rarely appreciates more than 5 percent a year.

If your reasons for moving are purely structural, make a concerted effort to evaluate the cost of remodeling.

If the problem is with the neighborhood, such as traffic, schools or neighbors, look for alternatives. Research new routes to work. Have a party and meet the neighbors. Consider a private school - the cost may be less than the cost of a move to a better district.

If your house is too expensive to maintain, look for money-saving ways to create a more cost-efficient home.

Before you decide to trade in your old home, make an inventory of what you do like about it. The pluses may be harder to duplicate then the minuses are to fix.

In many cases, a renovation can resolve whatever it is you don't like about your home. Basic renovations or additions range in price from $55 to $125 per square foot. Get estimates from at least three building contractors. The most expensive additions are for bathrooms and kitchens, but they also offer the best return on your investments when you sell.

If you decide to refinance to improve your home, factor in the cost of refinancing. In the past two years, almost 20 percent of all mortgage owners refinanced their homes. Most people refinanced to reduce their mortgages, but if you're considering it as a way to remodel, be aware that you could end up increasing your monthly payments. When you refinance your loan, you typically also have to pay closing costs, which may include points, application fees, credit reports and appraisal fees.

After considering costs, many homeowners choose an additional line of credit instead of refinancing. It works well because no interest is paid until you use the money to pay your contractor. The catch here is that the amount offered through a home equity loan is sometimes less than you'd get by refinancing. And the interest rates on home equity loans are higher. Adjustable rates prevail in the industry, leaving you with less control over your mortgage budget than you would have with fixed rates.

In almost every case, you will be better off financially by not trading up. Closing and moving costs are nondeductible expenses that account for a substantial sum. A larger, newer home might bring higher taxes. And no home is perfect. You'll need to "improve" again, eventually.

Consider the investment value of the money you'd have to spend on a new home. For example, let's say you spend $25,000 more on your move than if you remodeled. If you invested that $25,000 in a simple certificate of deposit paying 6 percent annually, it would grow to $40,144 in pre-tax dollars in seven years (the amount of time the average homeowner lives in a home).

You've also got to consider housing prices in your area. Do you think they'll continue to appreciate or is the market near its peak? Home prices can rise - and fall - rapidly.

If you live in a rapidly appreciating area, or one very desirable to renters, you may want to keep your current home.

Rent your single-family home at a sum that equals the cost of your property taxes, insurance, upkeep and mortgage. Buy your new home with a "from scratch" down payment, and carry the new mortgage. This works well only if you live in a neighborhood where rental homes are desirable.

Study the vacancy rates and rental values in your area. You can also depreciate the property once you turn it into an investment. But you will lose its primary residence status. So the favorable exemption of profit provisions will not apply.

Still, if you sell at retirement, the house can be a nest egg, or better yet, can serve as an income stream after the mortgage is paid off.

Remember that Uncle Sam will help if you decide to move and sell your house. You can keep up to $500,000 of profit without paying taxes when you sell your primary residence, provided you have lived there at least two years.