I run 32:16 (52″ gear) on a 26″ bike with large hills (yes sometimes I have to walk)
I also run 35:17 (60″ gear) at work where it is flat with some shallow climbs or short steep stuff. I run (fast shuffle) the short steep stuff when I can’t climb it but that’s deliberate. Essentially the 60″ gear is great for this area and I don’t spin out. While it had cross tyres on making the effective gear smaller it got a bit too spinny in places as there are quite a few bits of tarmac I use.
Play with this http://sheldonbrown.com/gears/
I’d say go one tooth at a time and accept the extra costs. Although ask your friends and they might have cogs you can borrow.