There aren’t many instances when you can have your cake and eat it too.  This “one or the other” mindset, though, doesn’t always reflect reality and could even limit future options.  A case in point is millennials and homeownership:  many incorrectly believe homeownership is merely a liability that will limit their fun and travel.  I will explain why this is a fallacy and tell you how, in my mid-twenties, I was able to buy a house and travel the world. More info with regards to Penrose pricing here.

Financial decisions always require some forethought.  While counterintuitive, purchasing a home earlier in life will often enable you to travel more.  A house is an asset that can generate income and one likely to increase substantially in value over time.  If you don’t buy a house, sooner rather than later, you will be subjected to ever-increasing rents. Moreover, you won’t receive rental income while away on extended vacations.  While mastering this financial chess game might seem impossible, the most important thing is knowing where to begin.

Now, little more than four years into my plan, I am a world-traveling homeowner.  The keys to my success have been reducing expenses, effectively exploiting credit card rewards, properly researching home loans and choosing a house that fit my budget.

Evaluate monthly expenses and develop a budget you can adhere to.  Oftentimes, eating out and monthly subscriptions waste a lot of our money.  This was true in my case.  After using the Trail Wallet app, I found that I was spending $75/month on Netflix and other entertainment services and more than $400/month eating out.  So, I decided to cancel a lot of my subscriptions and cook most of my food at home.  I would fix dinner and eat its leftovers the next day for lunch.  I also reduced my spending by driving less, walking more, and by running instead of belonging to an expensive gym.  Ultimately, this saved me about a $1,000/month, or $48,000 over four years.

If you play your cards right, rewards credit cards like World Elite MasterCard and Barclaycard Arrival Plus could enable you to accumulate a fortune in free airfare and improve your credit score.  The method I use is to get these cards, but not enough to harm my credit score, and use them to earn between one-and-a-half and three times the airfare for whatever I spend.  I only use the cards for bills and necessities, spending only the required amount to acquire the rewards.  I also avoid the annual fees by cancelling the cards in a year’s time.

Spend some weeks researching and evaluating mortgages, considering all interest rates, fees and discounts.  Make sure you have a solid credit score and the requisite down payment ready; these are often 20%, but can be as low as 3%.  Considering how incredibly low rates are now, homeownership should be well within your reach.