As you graduate college, find a job, and climb the career ladder, you’ll begin accumulating savings. The question becomes what should you do with those savings? The conventional route is to buy a house and start a family. You can also use your funds to travel the world. Which is the better way to spend your money?
While the decision is ultimately yours, the better long-term investment is purchasing a house. You can always rent out the house while you’re traveling to recoup some money. You can also buy a smaller house and use your leftover savings for traveling.
In this guide, we’ll examine more closely the pros and cons of buying a house instead of traveling and vice-versa. If you’re truly interested in having both (which is doable, by the way), we’ll provide some tips for that as well.
To help you look at the matter objectively, we’ll use this section to put together a pros and cons list for both traveling the world and owning a home.
Home Ownership Pros and Cons
Let’s start with homeownership and all it entails, including the good, the bad, and the ugly.
Here are some pros of owning your own home.
- It’s what’s expected of you: If following the tried and true version of the American dream, then it’s as we said before. You should graduate college, find a steady job, buy a house, and start a family. The goal of a house is ingrained in most people, and possibly you as well.
- Your money doesn’t go into a black hole: Renting an apartment is great, as you can get out should you want to travel. However, each month, you’re throwing your money into the ether. You’ll never own an apartment, so your money isn’t going towards anything long-term. With homeownership, your payments are being used to pay off a mortgage.
- Stability and security: A home isn’t necessarily forever, but it sure is a more stable living arrangement than an apartment or even a condo. The sense of security you’ll feel is unmitigated.
- Lots of space: Unless you live in a penthouse apartment, then the average home is going to afford you more space than renting an apartment. You can spread out and live a less cramped lifestyle.
Now let’s examine the downsides of owning a home.
- It’s permanent: If you don’t like a neighbor in your apartment complex, you can always move out. Once you own a home, you can’t wriggle your way out of the arrangement so easily. You’d have to put your home on the market and hope someone buys it.
- All the repairs are on you: As a homeowner, you can’t call a landlord to fix that broken pipe or loose side door. You have to learn how to fix everything or find someone who can, and you must pay for the costs of repairs too (either that you do yourself or pay a professional to do).
- Owning a home is expensive: The mortgage and repair costs notwithstanding, you have many other fees associated with owning a home that you don’t when you’re renting. You have to pay for the electricity, water, Internet and cable, homeowner’s insurance, a sewer bill, and possibly a homeowner’s association fee or mandatory insurance such as flood insurance. It’s costly!
- The housing market wildly fluctuates: Whether you’re thinking of buying a house or selling, the housing marketing has been up, down, and sideways in recent years. When the demand for homes is high, it’s nearly impossible to buy one for an affordable price.
Traveling Pros and Cons
Switching gears, now it’s time to talk about the pros and cons of traveling instead of buying a house. We’ll begin with the upsides.
- Go where you want when you want: If you want to experience true freedom in this life, then travel instead of buying a house. You can go where your heart desires whenever the urge strikes. Rather than be tethered to one place permanently, you can stay in a location for as long as you want and not a moment longer.
- Make timeless memories: It’s on almost everybody’s bucket list to travel the world. Rather than wish for it, you can actually do it. The memories you make will stick with you for the rest of your life!
- Improve your happiness: According to a 2021 CNBC article, a cited Washington State University study found that traveling often can increase your happiness by at least seven percent. Doesn’t everyone want to be happier? Regular travel could be the answer.
- Experience different cultures firsthand: You can read about the different cultures of the world, or you can get out there and see how life differs depending on where on this vast planet you visit. Many people choose the latter!
Traveling–as life-altering as it can be in the best way possible–does not come without its struggles. Here’s an overview.
- Lack of stability: Traveling is very exciting and fresh at first, but after a while, the constant merry-go-round of jetlag, the frequent flights, and the hotels can make life a blur. Taking more time between your stops is usually the best medicine.
- Traveling is expensive: You’re not only paying for a plane ticket to your ideal destination when traveling, but lodging, food, entertainment, and maybe some gifts for your friends and family back home. Your wallet can be drained fast.
- Hard to sustain long-term: Where does your travel money come from? You could start a travel blog and make an income that way. Perhaps your job allows you to work remotely, so you do your work from anywhere. For anyone who works a different type of job though, you can’t travel indefinitely. You need to work too, or you’ll be broke.
- Not the best long-term investment: When you look back 20 years from now, will you regret choosing to travel rather than own a house? You may, depending on what your living situation is like at the time. Many people agree that a better use of your money, especially long-term, is to buy a house.
How to Have Your Cake and Eat It Too – Tips for Being a Traveling Homeowner
If you’re still straddling the fence between homeownership and traveling, we can’t blame you. Both are attractive propositions, after all.
Fortunately, you may not have to choose. If you make smart decisions when it comes to the type of house you buy and how you allocate your funds, you can be a homeowner and still travel when you wish. Here’s how.
Buy a Smaller or More Inexpensive House
Who says your house has to be the biggest or most expensive on the block? If you’re prepared to live with less, then you can enter the exciting world of homeownership while still having cash on the side for traveling.
You don’t necessarily need a large house considering you’ll split your time between being at home and out seeing the world anyway. You’re making a cost-effective decision when you downsize.
Fixer-uppers can win you over with their potential. You see what a charming home you could have after you repaint the exterior, redo the wallpaper in the sitting room, carpet the bedrooms, refinish the bathroom, and get new counters for the kitchen.
Each of those tasks can be monumentally expensive. The money you spend on your counters cannot go into your travel fund, which means you’re forced to choose one over the other.
When you buy a house that’s already in good condition, you’re ensuring you have fewer repairs to deal with.
Now, don’t get us wrong. No house is perfect unless it’s brand-spanking-new. That said, your home will require fewer repairs than a fixer-upper. Plus, the repairs needed are usually less expensive.
You can then funnel that money into traveling.
Rent Out Your Home When You’re Traveling
We mentioned before that traveling long-term can be unsustainable unless you have a remote gig. One of the ways to procure consistent income is to rent out your home when you’re not there.
Depending on where you live, your home can be a quaint vacation property or simply a short-term living situation for college students, tourists, and others. You may choose to rent out the entire house or just a wing or section of it.
If you do the latter, then you could theoretically rent the house out even when you’re living there, which would maximize your earning potential!
You’ve reached a fork in the road where you have to decide whether you’ll put your money towards owning a home or traveling the world. You can do both if you’re smart with your money, and we recommend that option above all else.
You won’t have to feel like you’ve missed out on the many rich experiences that traveling has to offer, and you’ll always have a reliable place to return to.
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