Life advice--- Spending too much $$$ ? Is it too reckless?

Gday all, quick briefing... I'm a single 23 year old male from Australia who currently lives at home with my parents and works a low paying job even though i have a university degree in communications. I'd earn about $35,000-$40,000 a year. And I still owe about $10,000 on uni payments lol.





Now my ultimate goal is to one day have a nice family and a nice home. And really just a job that pays alright and is enough to get by with some added extras lol.





In my heart though I've always wanted to see the world (different from travelling the world because travelling means experiencing more than just getting a glimpse of something)... so right now I'm at a crossroads and need some help decision wise and some advice please.





I have about $50,000 ---enough $$$ to put a deposit on a house and pay off my Uni debts... but i have a yearning to see the world so my plan is to take $20,000-25,000 and visit Europe and US for 3 months and just go wild and have fun because in all likelihood i'lI probably not be able to again.





So is this a good idea or should I leave my seeing the world until later in life and put $$ to a house or compromise and just go to either US OR Europe?? Would spending $20,000 on a holiday be too much?





Any advice and help is much appreciated. Cheers. (BTW spending that much is probably over estimating though lol)Life advice--- Spending too much $$$ ? Is it too reckless?
If I were you I would follow my dream. I got married at 18 and I have so many regrets about the things I never got to do. Once you're married and own a home you can't just take off for months you'll have too many responsibilities. If you don't take this opportunity to make your dream a reality you'll spend the rest of your life regretting it.In your case, which is rare, you can accomplish the traveling and exploring and still have money when you come home. I think you have a well thought out plan. Go and have the time of your life and something to tell your grandchildren.Life advice--- Spending too much $$$ ? Is it too reckless?
If I were you, I would use that money and buy that house, Make a down payment and finance the rest. pay off your uni debt and then-------rent the house out for the months you are gone seeing the world. You might even have your real estate person do that as a package deal where they collect the rent for you and make the mortgage payment and ta xes for you.
Travel the world now. There is plenty of time to be conservative and ';safe'; when you are older. You are ready to go; so go.


$20,000 is not too much for the experience you will have..
Firstly, I'm an Aussie, too, and I've got a Uni degree (actually 2) and I work in a low paying job. So I know what it's like.





You should keep that $50 000 and not spend it on a holiday. A holiday is a transient expense, and Europe will still be there later on. However, if you're really keen to travel, you could always do a Con Tiki tour, which is cheaper. You'll still get to travel and see the sights, but you might not break the bank. I'd go talk to a travel agent about it, because now that there is a huge slump in the world economy, tourism won't be doing so well. You could get a good deal. But don't squander your savings on it. $20 000 is FAR too much for a holiday.





I suggest you clear that debt. Even HECS debt is indexed to the Consumer Price Index, meaning that the amount you owe goes up in pace with inflation. So if inflation is three percent, and you owe ten grand, that'll increase by $300 to keep pace with inflation.





Clear the debt. Then put whatever you have left over into a good investment. If you're with the Bendigo Bank, or the ANZ, you could probably see a financial planner for free at the bank. They can help you invest that money in a way that will make it work for you.





Invest the money, and leave it alone. Then, while you're living at home, save the money for some Con Tiki trips. You're living with Mum and Dad, so you can afford to save quite a lot. I hope you are paying them rent and splitting the bills, it's only fair. However, your parents are paying for rates, insurance, and a whole lot of other incidental expenses, which are saving you a fortune. So take advantage of your situation and save some money for a holiday.





I would not go for three months. I would look at the options that the travel agent can offer, and decide then. Keep it to a reasonable limit, too. Firstly, you don't want to be away from work for too long, especially if you are a casual employee, because you might find you don't get any shifts when you get back. If you have a full time permanent job, you want to keep some of your holiday pay up your sleeve in case something happens and you can't work.





You should choose a cheap option. This might involve doing several trips consecutively. Set a price limit and stick to it.





When you return from seeing the world, you'll still have your house deposit. Hopefully you'll also have some interest.





Keep working for six months and saving for your house deposit. This will help you present a good history as a saver to the lenders. Also, get rid of any other debts that you have during this time. Use this time to research what properties are available in your area, so you'll know when you go hunting, what is a good price. This is important. Also, look at what area you want to live in, what you can afford, and what facilities are nearby. If something bad happens and you need to move back home with Mum and Dad and rent your house out, you'll need it to be close to schools and shops, or public transport.





When you have a mortgage, you can still have fun. My partner and I could afford to go on a holiday costing $20 000, but we would rather pay our house off in 5 years, so we don't. Look at getting a cheap, good quality home. Don't go for a very expensive house. You can pay a cheap house off faster, and then use the equity in it later to buy the house you actually want to, and keep it as an investment property. You're young, and you'll have a higher disposable income now than at any other time in your life, so you want to buy a cheaper house with the largest possible downpayment you can get. You want to have at least 20% of the purchase price, but 30% would be even better. With your current savings, that would be around the $140 000, so keep saving.





Remember, you're single and you're doing this on your own. So you'll want a big deposit. I am forever grateful we had a 30%+ deposit, because it means now that if one of us lost our jobs, the other could easily make the mortgage repayments and cover the cost of living too. Believe me, waiting another six months will be worth it. Get a loan with a redraw facility too, so that if you would like to go on holidays you can keep your savings stashed in the redraw account to reduce your interest, and then use those savings for a cheap holiday. It gives you some financial flexibility, and the money you save by doing this will be more than if you had savings in a separate account earning interest, which is a taxable income.





You should go to the library and try to find the following books. The first one is 'the Barefoot Investor' by Scott Pape, who has a column on Yahoo!7 in personal finance. It is my favourite book of all time. It really will change the way you look at your finances. The second one is ';Your mortgage and how to pay it off in 5 years, by someone who did it in 3'; by Anita Bell. A bit preachy, but full of fantastic tips. And at the library, they're free!





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Pay off what you owe on your education... (uni payments).


At least take care of that... before it ruins your future credit.





After that... it is up to you.





To be honest... it is a lot more fun to do the traveling when you are young and able... nothing more morose than watching a 75 year old taking Bahama cruise... (that is reality not the 18 year old girls you see portrayed on the Ads...)





Take half of your money that is left over after you pay off your education debt (uni loan) and have some fun.... then get back to the grind stone and replenish your savings and buy a house and life a normal life... because otherwise you will forever wonder.... what if I had done it?