It’s been a month and a half, since I’ve sat down and written anything in this blog. Most of my distraction away from this has been with my new role at work, trying to get some much-needed down time on weekends (aka – I don’t want to see a laptop), or trying to work on my yet-to-be-titled fictional novel. However, there’s also a part of me that has avoided posting anything of substance here because I’m trying to figure out some “large-life” things.
In years’ past, I’ve thrown caution to the wind with my credit card and said, “I’m up for the adventure, let’s go”. I’ve had amazing vacations in Miami, Chicago, Toronto, Sundance, Los Angeles, New Orleans, San Francisco, London, Paris, Belgium, and the list goes on. Since I moved back to DC a year ago, I’ve tried to pare that back to trips that cost little-to-no money: A family vacation in Europe, a family vacation to Disney World, and a trip to Cancun for an extended weekend (not a whole week). There isn’t one experience on these lists that wasn’t amazing (particularly Europe). However, it left me wanting to explore more and stay “grounded” less. Like they always say, “Once you’re bitten by the travel bug…” So what’s halting me from continuing on my quest for more exploration? I’m two years away from being 40 and I don’t “own a spot in the world” aka real estate – something I feel like I’m supposed to do at my age. So what do I do?
If you’ve had limited travel opportunities in your life, I’m sure you’ve heard, “there’s a huge world out there and once you’ve had a taste of life outside your front door, you’re hooked”. Or, you may start to notice more and more people around you, telling stories of far off lands they’ve visited; or perhaps you’re noticing more friends are traveling in groups to experience these things together; or even that there are becoming trends in where groups are going in a given year: Iceland in the spring, Greece in the summer, and then the slew of trips to Miami and points south to keep from freezing (Note: that’s what’s happening in D.C. anyway). But how are they doing it? This has been my biggest question thus far and financially, my biggest barrier to being able to travel more frequently – especially since the pressure of owning a home has become so huge.
Of course, I can’t tackle this subject by myself. I have many friends of many ages, across the world, that have been through this/are going through this in some form. But they all ask the same thing, “Which need is larger – your need to explore the world or your need for a permanent place to put your stuff?” The other question they love to ask with a smirk is, “Is this your version of a mid-life crisis?”
Sure, the latter is like a punch in the gut, only because on paper I seem old, yet for some reason, I feel like I’m in my late 20s. 🙂 Still, it doesn’t help to think that I’ve been working for 18 years and have not really given any thought to planting roots until this year. But I digress.
I decided to ask two different women (one in real estate and one who travels the world), whom I admire greatly, the same question about real estate vs. traveling: What makes the most financial sense – traveling or “slaving away” at work to own a home? The answer might surprise some of you.
Girlfriend #1: The Real Estate Guru
My girlfriend in real estate is quite impressive. She’s definitely done some traveling in her time and was also fortunate enough to do well in real estate at a young age. However, she also knows the pitfalls of owning real estate and what it can do to not just one’s bank account, but also their sanity.
In the Washington, D.C. area, whether reports are going to publish it or not, the SAFEST areas, closest to the city (even 20 miles out) are still out of range for someone making under $120,000/yr. The average home price for a one bedroom condo in Arlington, VA is almost $400,000 and that does not include annual taxes, Home Owners Association (HOA) fees (usually $400-$1000/mo.), as well as any utilities, parking spaces, and any other odds and ends that come with purchasing a condo, including potential closing costs, inspection costs, and any money down upfront. If that’s just a condo in a good area, imagine the price of a townhouse or single family home, there.
As one of the most knowledgeable property owners I know, my girlfriend surprisingly told me that owning real estate is not a MUST these days. With the average price being so high, people aren’t making real money off of homes around here – most are lucky to break even when they go to sell. And, unless you’re going into purchasing home with a partner or are making enough money to comfortably afford a place, it doesn’t make a lot of sense to shove yourself into a very stressful situation.
Now, I know for you realtors and mortgage lenders out there, reading this post, you’d argue this left, right, and center because if everyone thought this way, you would not be selling any homes. However, it’s sound advice for someone that doesn’t want to end up in over her head, or worse, in an unsafe neighborhood (actually, I don’t know what’s worse).
She told me that if traveling is what I wanted to do, to do that while I can because in most situations, the first few years of owning a home are all about spending quite a bit of money, and then trying to recover (aka building back up your bank account), only to have to deal with expensive repairs when/if they arise. In other words, there’s little-to-no travel – not on smaller paychecks, where every dollar is key.
All of that actually stuck with me – and in a positive way.
Girlfriend #2: The Traveler
After chatting with girlfriend #1, I had a phone date with girlfriend #2. She’s in her 40s and has traveled extensively. Like me, she spent a bit of time, swaying back and forth on owning a place because she thought she had to do it. In fact, it ate at her that she was turning 40 with what seemed like nothing to show for it. When her big 4th decade arrived, she went on a month-long, soul-searching adventure and ended up not coming back for quite some time. She realized that there’s so much to experience in this world and that spending money on a place to permanently put her stuff was not high on her list. In fact, the more she started telling others about her growing need to travel, the more people started to admit that they would rather do the same. It eased her “fear” of supposedly having to grow up and be financially responsible (the irony in this is that owning real estate can be an irresponsible move if you’re not prepared). She decided that traveling and renting was the best thing for her at the time and three years later, she hasn’t looked back. It’s very inspiring!
In chatting with these two women, it made me eager to search for how other people do this – how they seem to hold down jobs and make time (and even money), several times a year, to see and do things in this world. I’ve certainly learned a lot. Here are the top five things I’ve learned when creating a budget-friendly, time-sensitive travel lifestyle:
- Find a roommate you can get along with – People, like me, find this to be a non-negotiable. I work from home and my sanity is key. However, if you can live with someone else, it does allow you to pay less in utilities and rent, which equates to more money.
- Stuff vs. experiences – While some prefer both (like me), the reality is experiences are with you for a lifetime – stuff can always come later. Every time you want to buy something, ask yourself if it will impact your future travel plans. I’m currently “training” myself on this concept, as for me, this is key.
- Social activity vs. experiences – No one wants to stay in and only go out when it’s time to travel. The question comes down to IF you actually NEED to spend much money when you go out. It’s another area I’m working on because 1. Alcohol consumption actually increases your caloric intake, which creates weight gain; and 2. It costs A LOT of money in the long run. The average person spends $80 – $200 a night on going out, between rides, alcohol, food, etc. – that’s quite a bit of money spent in ONE WEEKEND. Instead, as painful as it sounds, try going out and not sipping on drink after drink, driving your own car (if you have one), and/or eating at home before you head out. Those saved dollars add up!
- Set travel goals well in advance – Unless you can afford the last minute trips (or you find that amazing flight deal), plan at least 3-6 months out if you can. I’m already planning out 2017. What travel goals mean (in question form):
- When do you want to go on your trips?
- Are your dates flexible, to include better airline rates if you are willing to go a few days later?
- How much do you want to spend?
- Who are you planning on going with (hint: larger groups mean less money spent)?
- Are there special tours you can tack onto if it’s a small group, or if you’re going solo?
- What do your friends and acquaintances say about the place you’re going? Can they make any recommendations? Do they know of anyone who lives there?
- Do your research – And prepare to do lots of it! While something might seem like a great deal, it might very well not be. Like I stated before, recommendations can become key! Also entertain Air BnB – I’m hearing more and more great things about places to rent all over the world that are unique and offer better views, living conditions, and experiences than a hotel!
While all five above seem daunting, the effort you put into saving and researching now, the better off you will be financially in the long run. As for me, I think I’m going to hold off a few more years, allow myself to leave some “footprints” across the world, before I own a spot in it 🙂