Travel or buy a home? At 26, with strong incomes, healthy savings and no debt, you’re in an enviable position – and that’s precisely why the decision feels so heavy. You don’t want to “mess it up” by choosing the wrong path.
The good news: there isn’t just one right answer. But there *is* a way to make a smart, intentional choice instead of drifting into what you think you “should” do.
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Your Situation in a Snapshot
– Age: 26
– Joint income: ~280,000 AUD per year
– Savings: ~170,000 AUD
– Debt: None
– Current living situation: With parents, saving ~13,000 AUD per month
– Recent history: 6 months travelling around Australia, loved it, had to return early
– Plan A: Upgrade car (done), buy a larger caravan (not done yet), travel again and work along the way
– Alternative Plan:
– Buy a house for ~750,000 AUD in your area
– Approx. 1,000 AUD per week mortgage
– Likely to be negatively geared if rented later (~500+ AUD/week out of pocket)
– Goals:
– Have children in the next few years
– Travel while young and even with kids
– Avoid being priced out of the housing market
You’re essentially weighing two big questions:
1. Security vs freedom – Lock in a home now or keep life flexible and mobile?
2. Experiences vs building equity – Spend more on travel now or prioritize the property ladder?
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First Step: Define Success *for You*, Not for Others
Many people default to “buy a house as soon as possible” because that’s considered the responsible adult move. But your numbers show you’re already financially responsible: high savings rate, no debt, strong income.
Before crunching numbers, clarify:
– What would you regret more at 40:
– *Not buying a house earlier?*
– Or *not travelling freely when you were young and child-free (or with very young kids)?*
– How important is *flexibility* in the next 5 years?
– How important is *stability* (a base, community, school zone, etc.) in the next 10?
Once you’re honest about this, the financial plan should support those answers, not fight them.
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Option 1: Buying the House Now
Pros
– You lock in a home in your chosen area before prices potentially move further out of reach.
– You start building equity early, which can snowball over the long term.
– With your income, you can pay down the mortgage relatively quickly *if* you keep your spending disciplined.
– Gives a stable base before kids – emotionally and logistically.
Cons
– 1,000 AUD a week in repayments is a big fixed commitment. It reduces your flexibility to travel long-term or reduce work hours.
– If the property is significantly negatively geared as a rental (500+ AUD/week out of pocket), it may become a cash-flow drag in future, especially if one of you steps back from work when kids arrive.
– You may end up becoming “asset rich, experience poor” during years when you actually want to be on the road.
– Running costs (insurance, maintenance, rates) will add to the burden beyond the mortgage.
When Buying Now Makes Sense
Buying now is more compelling if:
– You feel a strong emotional pull to having your own place and it genuinely makes you happier.
– You are comfortable putting travel on the back burner or doing shorter trips instead of full-time or long-term travel.
– You’re happy to work full-time (or close to it) for the next few years to sustain the mortgage without stress.
– The property has solid fundamentals: good area, decent rental demand, realistic long-term capital growth prospects.
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Option 2: Prioritising Travel and Delaying Homeownership
You’ve already identified what you *really* want: travel more, perhaps even with kids, while you’re young and energetic. The question is how to do that without blowing your financial future.
Pros
– You get to live the lifestyle that excites you *now*, not as a vague “someday”.
– You can spend extended, high-quality time together – and later with children – without being locked to one location.
– With incomes like yours, even intermittent work on the road can maintain or grow your savings if you’re disciplined.
– You’ll likely gain clarity about where (and *if*) you even want to settle later, instead of guessing now.
Cons
– Emotional fear of “missing the property boat”. Prices *may* keep rising. No one can guarantee otherwise.
– You may feel socially behind if your peers are all buying houses.
– Future lending conditions and interest rates can change, which could affect how much you can borrow later.
– You’ll need a proper investing plan so that your money works for you instead of just sitting in cash and being eaten by inflation.
When Travelling First Makes Sense
Prioritising travel is more rational than it seems if:
– You have a clear budget and financial safety net even while travelling.
– You invest a good portion of your savings instead of keeping everything in cash.
– You’re willing to accept some market risk in exchange for growth over several years.
– You’re comfortable that owning a home may come a few years later, but with more life experience and clarity.
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A Balanced Hybrid Strategy
You don’t have to choose “all in house” or “all in travel”. You can design a middle path that preserves your options:
1. Keep living with parents for a fixed period
– Set a clear timeline: for example, save aggressively for the next 6-12 months.
– You’re already saving ~13k/month. In another 6 months, that’s ~78k more, taking you near or over 250k savings.
2. Ring-fence your money into “buckets”
– Safety bucket: 6-12 months’ living expenses in cash or high-interest savings. This is your non-negotiable emergency fund.
– Travel bucket: A clearly defined amount for your next big trip (caravan, fuel, campsites, food, experiences).
– Investment/house deposit bucket: The remainder invested for growth with an eye on future home purchase.
3. Travel with a house-deposit anchor
– Instead of pouring *all* your savings into travel, set a minimum house deposit amount that must remain intact and invested (for example, 150-200k as a future deposit).
– You then travel using new income you earn on the road plus only the travel bucket, not raiding the house deposit bucket.
4. Work while travelling
– With your incomes, even part-time or remote work can keep your savings stable or growing.
– Aim for your travels to be *cash-flow neutral* or only mildly negative, rather than “burn the savings down”.
This way you’re not betting your entire future on property prices standing still, but also not sacrificing years of experiences purely out of fear.
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Smart, Low-Risk Ways to Invest Your Savings While You Travel
You asked specifically: if you travel, how can you invest your savings in a smart, low-risk way?
“Low risk” in practice usually means:
– Diversified
– Long-term oriented
– Not highly leveraged
– No need for constant attention
A few broad principles and options (not personal financial advice, just frameworks):
1. Keep a Solid Cash Reserve
Before anything else:
– Hold at least 6-12 months of basic living costs in cash or a high-interest savings account.
– If you’re travelling full-time and your income may be irregular, lean toward the higher end (12 months).
This protects you from:
– Job loss or inability to work on the road
– Medical or family emergencies
– Unexpected vehicle or equipment breakdowns
2. Consider a Simple, Diversified Investment Portfolio
For the longer-term portion of your savings (especially your future house deposit), a simple mix of:
– Broad-market stock index funds or ETFs (for growth)
– Government bonds or bond funds (for stability and lower volatility)
Over a multi-year period, a diversified portfolio like this has historically grown faster than cash, though it *will* fluctuate in value. To keep risk moderate:
– Keep your investment horizon at least 3-5 years.
– Don’t invest money you absolutely must have in a specific year (e.g., month X, year Y) for a deposit; a market downturn at the wrong time can hurt.
– If you’re nervous, tilt more toward bonds and cash and less toward stocks.
3. Avoid Over-Leverage While Your Lifestyle Is Flexible
It can be tempting to use leverage (borrowing to invest or taking on a second, investment mortgage), but:
– With an uncertain travel/work pattern, it’s safer to keep your fixed obligations low.
– Owning a leveraged asset that is cash-flow negative can feel especially stressful if your incomes drop or become irregular.
You can always increase your risk later, once you settle and have stable income plus a home base.
4. Automate as Much as Possible
You don’t want to be constantly managing investments while on the road.
– Set up automatic regular contributions from your income into your chosen investment vehicles.
– Decide on a simple allocation (for example, X% stocks, Y% bonds, Z% cash) and rebalance occasionally rather than frequently tinkering.
5. Think in “Time Buckets”
Match the type of investment to the time horizon:
– Short-term (0-2 years): Travel funds, emergency savings → keep in cash/very safe, liquid accounts.
– Medium-term (3-5+ years, e.g. house deposit): Conservative to balanced portfolio (mix of stocks/bonds), accepting some volatility for growth.
– Long-term (10+ years, retirement, long-term wealth): More growth-oriented assets, such as a larger share in stock index funds.
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What About Buying a Property *to Rent* While You Travel?
You mentioned buying, living in it first, then renting it out, but the numbers point to a heavily negative cash flow.
Key considerations:
– Negative gearing works only if you can comfortably cover the ongoing shortfall from your income and the property has strong long-term capital growth prospects.
– Being on the road + managing a property that’s *losing* 500+ AUD a week is a double stress.
– If your primary reason for buying is fear of missing out, and the property doesn’t stand up as a solid, relatively neutral or positive cash-flow investment, it might not be worth anchoring yourselves financially.
If you ever do choose to buy before fully settling:
– Look for properties that are closer to neutrally geared or at least not severely negative.
– Prioritise fundamentals: location, rental demand, quality of tenants, maintenance profile.
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Thinking Ahead to Kids and Family Life
You’ve also framed this around wanting children soon and ideally combining that with travel.
Questions to ask yourselves:
– Would you be more relaxed parents if you already owned a home somewhere, even if you weren’t living in it full-time?
– Or would the pressure of a big mortgage make parenting and travelling more stressful, not less?
– Are you okay with the idea that you might choose a different area to settle in after years of travel (once you’ve seen more of the country), meaning a house now *might not* be the long-term “forever home”?
For many people, the emotional security of owning a home before kids is powerful. For others, the real security comes from mobility, low expenses, flexibility – and a healthy investment portfolio they can access if needed.
There’s no universal right answer, but being honest about how *you two* handle stress and uncertainty is essential.
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A Practical Path You Could Take
One reasonable, balanced plan, based on your numbers, could look like this:
1. Next 6-12 months
– Keep living with parents and aggressively saving.
– Grow your savings from 170k toward 230-260k.
– During this time, do your homework on investing and decide your “buckets”.
2. Set your buckets
– Emergency fund (12 months of expenses).
– Locked house-deposit fund (invested conservatively, not to be touched for travel).
– Travel fund (cash for caravan upgrade, fuel, camp fees, etc.).
3. Invest the house-deposit fund
– Choose a diversified, relatively low-risk allocation knowing this is at least a multi-year pot.
– Accept that the value will go up and down, but historically should outpace inflation over time.
4. Hit the road with a clear budget and work plan
– Decide how many hours per week/month each of you will aim to work.
– Target at least break-even: your income on the road covers average travel and living costs, so you’re not heavily drawing down savings.
5. Reassess every 12-18 months
– Are you still enjoying full-time travel?
– Has your desire to own a home increased?
– Have your locations of interest for settling changed after seeing more of the country?
– Are you closer to wanting kids right now?
At any of these checkpoints, you can pivot:
– Settle, buy a home using the deposit you protected.
– Continue travelling while your investment portfolio quietly grows in the background.
– Or even switch to a semi-nomadic lifestyle (part-time travel, part-time home base).
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The Smart Move Is the One You Can Stick With
Financially, you’ve given yourselves a huge advantage by building strong incomes, zero debt, and significant savings before 30. That buys you options.
The “smart” thing isn’t just about pure numbers like amortisation schedules and rental yields. It’s about:
– A lifestyle you won’t resent later.
– A manageable level of risk and obligation.
– A structure where your money continues to work for you while you live the way you want.
If your hearts are in travel and you have the discipline to:
– Maintain a solid emergency fund,
– Keep a ring-fenced, conservatively invested house deposit, and
– Avoid taking on a big, cash-hungry mortgage that fights your values,
then prioritising travel now and homeownership a bit later can be not only emotionally satisfying but also financially sound.
You’ve already proven you can save aggressively. The next step is to decide what you most want your next five years to *feel* like, then build the financial plan that makes that possible.