How to Budget for a Vacation Without Owning a Timeshare

If you have spent time researching whether a timeshare is a good ‘investment’ or not, you may have come across a lot of evidence that warns you about the budget limitations and expense of owning a timeshare.  Even though there are many websites and online comments from dissatisfied timeshare owners, the rate of sales for the timeshare industry continues to climb.

How popular is the concept that timeshares offer good value for consumers?  The American Resort Development Association (ARDA) reports that domestic lakeside or country timeshare resorts sell approximately $1.2 billion dollars of inventory annually.  Consumers looking to enjoy beach side or theme park resorts spend roughly $1.1 billion dollars annually, and golf resorts earn an average of $1 billion dollars per year in timeshare contract sales.  Island, snow skiing and urban (city) timeshares sold for private or business use net the industry another $700 million dollars in annual sales.

So, if you are asking yourself why it seems that most timeshares do not care about “the customer experience” in terms of providing quality service, it is simply because a few thousand disgruntled Americans are not enough to put a dent in the annual sales, which are estimated to average almost $4 billion dollars U.S. every year. As unhappy customers are grappling with how to cancel their timeshare, or enduring the expensive cost of timeshare resale or rental services, new customers are lining up to buy into the dream of affordable, accessible and guaranteed vacations that fit their budget.

Why Do People Still Buy Timeshares? The Dream of Making Vacations Happen Easily

What motivates consumers to purchase a timeshare ironically, is affordability.  With the average cost of foreign vacations and even domestic family style resorts climbing, the dream of having a luxury vacation once or twice a year, is a goal that seems financially out of reach for most consumers.   Saving for an annual vacation (or two) seems much harder than simply factoring your ‘guaranteed budget’ into your existing monthly budget.  It appears to be simple; just pay the monthly bill, and you will have your vacation time.

When consumers buy into a timeshare, they are on average, extremely price sensitive.  After all, if budget wasn’t a consideration and the consumer could vacation anywhere and anytime they wanted to, they wouldn’t choose the predatory terms of a timeshare contract.  They’d simply pick a place, plan their vacation and go!   You probably know a few people who are in that category financially, but for the rest of us, setting money aside for a planned vacation is harder than it seems, and a lot harder than many financial advisors and professionals tell us it is.

People buy timeshares knowing that there could be problems down the road, but they trust that they have asked the right questions at the presentation, or from the timeshare sales person.  In fact, if you have ever sat through a timeshare sales pitch, you know that consumers have many questions, and the timeshare sales person is very skilled at avoiding the concerns, and focusing on the things that essentially, the potential buyer wants to hear.

Do any of these statements sound familiar?

  • “You will maximize your vacation time every year, as a timeshare owner”
  • “Our timeshare owners get first choice of the most desirable weeks in the year”
  • “Your family and friends will want to vacation with you”
  • “The timeshare will save you money compared to the cost of staying in a hotel, and offer you all the conveniences of home, including a kitchen and laundry”
  • “Many people own multiple timeshares in different resorts and destinations to maximize their vacation fun”
  • “If you can’t use your weeks, someone in your family can”
  • “Owning a timeshare is more affordable than paying for a vacation annually”

These statements are common in any timeshare sales presentation, or one-on-one pitch, because they provide the information that prospective owners want to hear.  Consumers want to make sure that at least one annual vacation happens (regardless of budget challenges) and they have typically not been very successful creating that vacation independently, because of cost constraints.  The option of owning a timeshare presents a solution to a problem; it makes it seem like the vacation will always happen, if you pay your maintenance fees and membership costs.

If that rationale was true, why do thousands of people fight a battle with timeshare and resort developments to cancel their contract?  Why are people so angry when they find out they are locked into their timeshare with few legal options to cancel it, no matter how their financial needs change?  Because consumers are sold the fantasy of an easy, affordable yearly vacation and distracted from the true nature of the timeshare industry; which is to profit from the sale, resale, rental services, and administrative fees over the lifetime of the consumer contract.

The relationship between the timeshare resort and the consumer erodes quickly, when the consumer starts to add up the numbers and realize the true cost of the vacation model they’ve signed up for.

You Can Budget and Save for Vacations Without a Timeshare

If you are focused on balancing your budget, and you are thinking that a timeshare might be a good option for you, remember that any scenario that gives you financial freedom is better than being locked up in a long-term contract that most financial advisors consider to be “high-risk”.    There are better ways that you can factor in 1-2 great vacations a year, without ever signing a timeshare contract.

Step 1: Plan Your Vacation Time

Since you probably must book ahead of time to be absent from work, planning works well both for your employer, and for your vacation saving strategy.  Choose the month and week(s) that you would like to be away, and get approval from your employer.  Once you’ve scheduled that vacation time (you can do it six months to even a year in advance) you can start to financially plan for the expense.

Step 2: Set a Maximum Vacation Budget

This is the fun part.  Choose where you and your family would like to go for a vacation, and budget out the cost of the entire trip.  Include hotel accommodations, airfare, spending money, and don’t forget about incidentals including baggage check fees, travel and vacation health insurance, and excursions that you will want to take while you are there (tours, or other recreational activities).

Step 3: Break it Down to Monthly Saving

Add up all components of your vacation for a maximum spend.  That amount should be divided equally by all months leading up to your vacation evenly.   Not sure whether you can save the money without spending it?  Ask a family member to set up a two-signature account where you can deposit (but not withdraw) your vacation money (it is a trick that many financial planners advise). You’ll start getting excited when you see it growing every month toward your dream vacation.

Step 4: Get Creative!

If there isn’t a lot of room in your budget for savings, you can get creative about alternative ways to fund your vacation.  Many people work a side-gig or small business they love, such as dog walking and pet sitting, lawn cutting, UBER or freelancing part-time (nights and weekends) to supplement their income to build up personal savings.  Have a garage sale (or two), get crafty or find something you like doing to bolster your savings and get to your vacation faster.

Step 5: Group Travel

Another cost-effective way to afford a luxury vacation rental, is to split the cost with a group of friends or schedule a multi-family vacation.  Everything is economical when split between a group, from rental cars and gas, to groceries, and many destinations offer recreational activities that are cheaper when booked at a group rate.  Something for travelers to consider as a practical way to vacation better, and more often, while creating memories with loved ones.

Step 6: Last Minute Deals

While you may not be able to book time off work at the last minute, you can still take advantage of significantly discounted vacation packages offered at last minute club sites.  From cruises to all-inclusive vacations, if you are willing to purchase your ticket less than two weeks before your departure, industry experts say that you can save up to 30% off the cost of pre-booking in advance.   Sign up for websites that promote last minute vacation rates, and have deals delivered to your inbox weekly, or create your own package with bidding sites like Priceline, which allow you to set your maximum daily rate.

The best part about saving for a vacation upfront, is enjoying it without the monthly expense (or large credit card bill) that arrives after a great trip.  And the number one rule to making vacations happen annually?  When you are done your vacation, start planning your next one right away, without worrying about escalating membership fees or maintenance fees.  Enjoy the freedom of vacationing anywhere you want, without a limiting timeshare contract.  It’s a better way to travel.