The game kind of push you into hoard and use rather than use items as you go through. This can lead to the situations where one would rather hoard the gold rather than use it to buy expansions on the homestead and then mass buy 5-10 expansions at once...
Balance there seems rather off from that point of view.

I would say you should not be able to merge more than lets say level 3 coins wood stone until you are lets say level 10 and then around level 4 you are able to get a bit further and so on....

Or perhaps its all about the 5 items merge thing?