We were sort of faced with this last year. We were thinking about moving to a larger house in a fancier neighborhood. But along with that would come with a bigger house payment. We'd have a bigger, nicer house, but less money to do fun things.
We decided to stay put, make some improvements in our own home, and be able to have more "free" money to "play" with. I'm really glad that we did it this way. I'm happier in our home now that we've made these improvements and now we can still visit our 2nd home (Disney!) as much as we'd like.