How Much House Can I Afford? (Part 2 of 2)

In Part 1, we talked about the financial half of deciding how much house you can afford.  But how happy you are after buying the house depends on how well you balance the financial of your decision with the psychological ones.

Hugh Chou writes an excellent article, "How Much Do You Really Need to Buy?" based on the book The Millionaire Next Door, disputing the contention that more is better. 

He contends that sometimes people who live in expensive neighborhoods aren't always the ones with the most money --- they're just the ones who spend the most.