At the end of 5 years, which would you rather have - 60 rent receipts or equity in a home that has probably gone up in value?

It depends on what matters to you. I have a pretty nice house that could use some work, but I am always choosing vacations over house projects. I have scaled down plans and do not regret all the fun I've had traveling.

Real estate is the most important investment you will ever make. And paying rent is just like shoveling money out the window.

On the other hand I sympathize with the need to travel.

Her parents have nothing to say in the matter. It's how the two of you choose to balance your spending.

I think the mistake some people make is that they think it's one or the other. It's not.

Make both absolute priorities. There are several ways to do this.

If you have or are working on masters degrees you have or will shortly have significant incomes. Don;t waste them on nonsense.

Pull the house/condo savings money and travel money out of your budget first.

If you're not making enough progress on either one:

Get a second job - both of you

Do you both really need cars? do they both have to be that big and that new?

Get a starter house or condo (you don;t have to start with what your parents have now - you just have to get into the market so you're building equity, getting tax benefits and benefitting from rising prices - even if it's a studio for a couple of years to begin with).

(I have seen so many of my junior staff spend wads of money on expensive clothes that are out of style in a season, big stupid expensive cars and going out for a night of $15 drinks 5 nights a week - and then wonder where their money went.)

Just put together a reasonable budget that let's you do both. And don't forget the 2 job idea - I and many of my friends did it for 2/3 years out of school til we were making reasonable money - since we didn;t have parents with enough extra to support us after college.

Oh - by the way - my first trip to europe was at 19 and I have gone now about 70 times in the 30 years since then (but some were business). And the first apartment I bought (at 29) for a measly $65,000 was recently sold for over $700,0000.

Fancy cars and Big homes dont mean anything to me.

I MUST travel.
Plain and simple.

And then there's the thought that you should see as much of the world as you can, if that's important to you, before all it's important monuments are gone. Sad but plausible fact. There are a lot of fruitcakes out there who care nothing about historic or aesthetic value, which makes me feel like I'm in a mad rush to see what I can now. Maybe that's how the OP feels.
Life is short and uncertain, do what you love and you'll have few regrets.

By the way, if anyone wants a house, I can't get rid of a completely remodeled one in Fl. that's on a fresh-water canal, even at $219K and $3000 closing costs. I should have spent the money traveling! I know I would have been a lot less stressed right now.

"...we love to travel and it is my passion and I would like to spend most of my disposable income traveling now-before we have little feet, and huge mortgage payments."

You have received lots of good advice here. Ultimately, you and your wife will have to make the list of YOUR priorities and then do a budget that will make them a reality. If travel (or owning a home, or both) is also your wife's passion, you'll find a way to make it work.

Once you see the numbers on paper, it'll make it a lot easier to decide what you can afford in all categories. There are always ways to travel inexpensively (w/lots of threads here giving great advice).

BTW, I wouldn't worry so much about seeing another new country each year as much as deciding what it is you wish to see and go from there. Chances are you'll get hooked by Paris, Rome, Croatia, Switzerland, Scotland etc. and then your plan for a new country each year will be out the window anyway.

Best wishes on your marriage.

I'm amazed that people spend what they do on weddings rather than put that towards a down payment. But like everyone says, it's an issue of priorities.

People are talking about single family homes? A 1 br condo (1000 sqf) in my neighborhood goes for over $375,000.

You want to know what we really think? Forget the house! It will just tie you down. Equity, smequity--live the life you want. You could be run over by a bus tomorrow.

2tired2night
touche'

I would like to reframe your question as I do not think it is about a house vs travel but more about accumalating financial assets vs spending your money on something which gives you pleasure. Renting is not always a bad financial move if the cost is low and you can invest the difference between owning and renting in productive ways. Beware that you also have maintenance costs in owning a house. I do not mean to imply that your life has to be all work and no play but you must strike what is for you a reasonable balance. How to measure this balance is difficult and as we do not know your financial situation and future, it is impossible to speculate.
Getting a good financial planner might be a good way of getting an objective view on your situation.

Obviously, you want some responses from people who enjoy travel. Crunch those numbers. Oh, it's such an individual thing.

I think this is a great question for Suze Orman.

Fishee, a 4 bedroom, 2 1/2 bath, 2800 sq. ft. house in my neighborhood - with excellent, nationally ranked public schools - sells for $200,000-$225,000.

I'm bringing this up because the OP should realize that it is a lot less expensive to purchase a single family home in some areas of the country/world than in others.

Another factor is that if you live in an area where you can happily send your kids (when they arrive) to excellent PUBLIC schools, the private school tuition that you won't be spending can be used for travel!

missypie, well you could barely buy a studio condo for that price in my neighborhood! But I love it here so it is worth it to me.

Again, it all goes back to personal priorities.

I think you've been given good advice and bad advice.

For one thing, in many areas of the country, living like you do, putting 20% down is unrealistic. And you don't have to pay PMI - you get a piggyback mortgage for the portion of that 20% you haven't put down on the house. It's the primary way these things are handled now.

Now then, if you're talking about spending your money on travel or on a house, but then you say you travel "wicked cheap" eating homemade PBJ's and sleeping in a rental car, I wonder how much disposable income you have at all. Travel or home may not be the primary claims on your finances. I worry you aren't saving enough.

So, look at your income and current obligations (including student loan payments, credit card payments, and monthly costs). Make sure you're paying down any credit card debt you might have. Then make sure you're both maxing out any retirement programs that are matched by your employer - and you want to aim to save 15% of your income for retirement. At the same time, as you're newly married and based on the questions you've asked, I'm betting you don't have an emergency fund - that needs to be at least 4-6 months of living expenses in a fund that you can readily access (an HSBC or ING account will allow you to earn 5%+ on that money, but make it easy for you to withdraw that money when you need it).

You talk about wanting to travel before you have a big mortgage and little feet. When do you plan to have children? Will you or your wife take a reduced work schedule to rear the children? You need to think this through and try to learn to live on one person's salary so you can see how children will impact your financial picture.

If you don't have credit card debt, are making good strides towards retirement savings, and you've built an emergency fund, then you can think house or travel. Real estate prices are in flux right now, and you may see some depression in the market for an indefinite period. However, real estate prices tend to trend upward longterm. That's a calculus you'll need to figure out for yourself (as in, are you going to live in one place long enough to make buying a home financially sound? can you afford what you want in a home and its maintenance?)

Travel and memories - on the other hand - are important, and you need hobbies and leisure in your life. However, perhaps you need to balance your needs and your desires with less extravagant trips for the next few years. I think that seeing as many countries as you are old is a nice goal, but not if it imperils your retirement or other financial goals.

Finally, ASK YOUR WIFE. What are her priorities? This can't be a unilateral decision.

In the end, you have to work it out for yourself. It is not only about priorities, but also about your own financial and personal situation, and stage in life. What is right for one person, with one income or tax situation, or in one city is not a universal truth.

As an example. I live in Canada, where mortgage interest is not tax deductable, so there is no tax advantage to owning vs renting. I live in a city where property costs are very high, but rental rates are still pretty reasonable.

So, although we could afford to buy and have enough for a down payment, right now we choose to rent. Gasp! The horror! It totally bucks the traditional logic, but right now, it is right for us. And we don't feel that we are "throwing away" our money.

By renting, we are able to put away and save MORE each month than a mortgage payment would be. We do this in several ways.
1. What we pay in rent is probably 1/2 what we would have to pay each month owning a house. Utilites and property taxes are included in our rent, as are all maintenance fees. You can't compare rent-mortgage, there are a lot of extra costs to owning than just the mortgage.
2. We know exacly what our costs are each month - if the stove breaks, or the roof needs fixing, the landlord pays. So we have very few unforseen costs which means we put away a fixed amount every month. (Including savings for travel).
3. We rent in the city centre, so can walk to work. This means we don't own a car or pay for transit. If we were to buy, it would definitely be in an area where a car would be a must. Cars are expensive to own and maintain.
4. We still have modest expectations. We haven't owned a car yet, or lived in a big house with a yard, so we don't miss it.
5. We don't spend $ fixing up or buying things to fill our home, because we don't own it! Instead we use our disposable income (and again we don't consider our savings as disposable) on travel!

Over the past five years we have gained more equity than we would have if we'd been paying into a mortgage. (Five years of mortgage payments wouldn't even dent the interest). When we are ready to buy, we will have a very large down payment, and should be able to get a short term mortgage and pay the rest off quickly.

This obviously might be totally unrealistic for you, but that is my point. There isn't one right way to do things. Really look at and question things. The traditional approach isn't right for everyone.

kgh8m has given very sound advice. Assuming you take care of the important stuff financially (your cushion and retirement, not to mention your other obligations), you need to get down to the business of determining what exactly you mean by "disposable income." Treat savings as a mandatory expense every paycheck.

When you do get to the point where you want to buy a house, don't over-extend! We know people who have (as I'm sure everyone does). They spent twice as much on their house as we did. They do not travel and they do not even go out to dinner anymore. But they live in a very nice neighborhood close to town. Good thing they like their house because they never get to leave it! All about priorities.

As for child care, if one spouse does not intend to stay home, take into account the future expense of child care (and the need for additional expenses, like life and disability insurance). Unless you have a family member who has already committed 100% to providing care, expect to spend a lot. This varies dramatically by geography and based upon what option you decide is best for your family, be it day care, one spouse at home, or a nanny, or a combination of options.

There are those who will always view travel (especially to Europe) as an extravagant expense, no matter how "wicked cheap" (you must be from New England!) you travel. Just be realistic about your expenses and finances and if it works for you, go now while you still can! Also, you can still go when you have little feet, by the way....

I vote for getting the house as soon as you can. I love to travel, too, but the sooner you get the mortage, the sooner it will be paid off. Years from now, you do NOT want to put off early retirement (and enjoying retirement travel) because you still have that mortgage to pay.

I know everybody is different, so our stories will differ. But by way of example, I bought a house very early in my career, and so did my husband (we hadn't met yet). Both houses are now paid off so I do not worry about the future. We rent out the house we don't live in, which provides extra income for us to travel on. So I love renters, God bless them. But I would give my renters the same advice - buy a home as soon as you can. Yes, in theory, you can invest money other ways and have a bigger payoff than a house might give you. But I know very few people who have experienced that.

Just my two cents. Good luck with whatever you decide to do.

I do know what Suze Orman would say, and I agree with her- always have.

Read her book and do a specific money outline.

You've got some good advice, but I don't think anyone with any economic knowledge would think "I would like to spend most of my disposable income traveling now,..." is something that makes a lot of practical sense. MOST, you said.

Yes it can be somewhat about priorities of course, but I have lived long enough to see the tale of the ant and the grasshopper come true more than not. Some of these rationalizations are just that- not a smidgeon of the reality of aging etc.

I made some mistakes, big ones, but buying a house when I was 20 although impoverished was not one of them. Any house.