If you are like the rest of us, you work hard for your money. One of the greatest pleasures is the ability to be able to take a vacation and simply relax, leave the world behind, and spend time with your family or friends. It is an important part of living well, and since the average American is entitled to only ten vacation days a year, it is also important to make the most of that time off.
Families that try to vacation at least once per year, learn quickly how expensive it can be to plan a destination trip. Between the cost of airfare, hotel accommodation and meals out at restaurants, the average domestic vacation (for a family of four) over a period of seven days, can set you back up to $600 per family member, or just under $3,000 for a budget conscious vacation, according to the U.S. Bureau of Labor Statistics, Consumer Expenditure Survey. International or exotic destinations, can cost far more.
Why would Americans be lured by the stifling and unpredictable long-term costs and buy a timeshare, when they could simply save for an annual family vacation?
Saving for Annual Vacations: Understanding the Challenges for American Families
When presented with the cost of 1-2 vacations per year, the average American can estimate that a minimum of $500 to $700 per month would need to be saved, to provide a family of four with the annual vacation experience everyone would want. That number simply doesn’t work for many families; the average household income in America (with two provides) is roughly $53,000 gross earnings per year (in 2015 there was an increase to $56,516 per annum). After taxes, cost of living, and other family expenses and needs (including student loans and personal, revolving debt) there isn’t much net income left to set aside even 10% for savings.
Whether we like to admit it or not, most Americans live paycheck to paycheck. One recent survey reported by the U.S. Federal Reserve, found that nearly 50% of Americans couldn’t cover a $400 emergency expense, without selling something, or relying on short-term loans, such as pay-day advance or credit cards.
Further findings revealed that more than 50% of U.S. households had less than one full month of income available in savings, should they become sick or unemployed. Financial experts recommend that Americans should have up to six months of expenses saved, in the event of financial, employment or health adversity. How many people do you know, that have $30,000 tucked away in a savings account?
Here are some other alarming statistics about the way families navigate financially in the United States:
30% of Americans in a survey for com reported that they had no savings at all.
62% of Americans have less than $1,000 saved.
Pew Charitable Trusts reported that more than 50% of American households experience a 25% change every two years (24 months) in income; either increasing their income by 25% or reducing it by the same amount. Given the volatility of the global economy, and variable domestic unemployment, as well as life events such as sickness or unexpected loss of income earnings, American families on average, are struggling to make ends meet, in a very uncertain economic climate.
Just when American’s felt that a vacation was out of the range of what they could reasonably afford, they stumble onto an offer that seems too good to be true. A chance to have 1-2 vacations a year without having to set aside $500 or more; the average timeshare is available at less than $200 per month at the introduction level. That makes a world of difference to people of all ages, as timeshares offer low cost monthly payments that virtually guarantee that the vacations you deserve, and want to have on an annual basis, will happen.
It is important to note that not all timeshare owners come from a background of restricted income, or cash flow concerns; but many do. And it the families that take the leap to commit to a timeshare membership at a payment rate they can “just barely afford” that are the most vulnerable to increased membership and maintenance costs, that inevitably follow, with sometimes financially catastrophic results.
Obstacles to Buying a Vacation Property
Financial advisors agree that in the long-run, purchasing a vacation property is by far, a better option for Americans than timeshare ownership. Financial obstacles stand between families and their desire to own a vacation home, including poor personal credit, debt versus asset ratio (too much personal debt) and the inability to save for a down payment, to qualify restrictions set by lenders.
We would all love to own a beach house. The problem is, few families in the United States can accomplish this, given financial challenges. Buying a vacation home for most Americans, is simply not an option.
Buy in Low? What Consumers Really Need to Know About Long-Term Costs of Timeshare Ownership
Timeshare companies understand that Americans are stuck between the desire and need to have vacations, and the inability to successfully save money, to have them. The idea of leasing time offers so many cost saving advantages, when compared to other alternatives, including purchasing a cottage, cabin or vacation condominium. You don’t have to insure your timeshare, you aren’t responsible for utilities such as water and electricity when you aren’t using it, and you don’t have to pay property taxes.
The most luring aspect of timeshares is the concept that you are paying for what you use. This is an angle frequently used in timeshare presentations; why pay for a vacation home you aren’t using? But timeshare owners are paying equally for all costs associated with the resort, amortized monthly, and split with all other timeshare owners who have bought into the same timeshare.
You are paying for something monthly, that you are using 1-4 weeks per year. And unlike an amortized mortgage on a vacation home, you will never legally own that timeshare. After 20-30 years of paying a mortgage on a vacation property, you would own it outright; an asset that would have very likely appreciated in value. Few timeshare memberships retain their value after even five years, with many timeshare owners never recouping the value of their initial balloon purchase payment ($5,000 to more than $25,000). In fact, many owners desperate to free themselves of their timeshare contract, try to sell their membership on EBay or Craigslist, for $1.00.
Don’t Be Lured by Lies About Timeshare Affordability
Aconsumercredit™ is proud to offer guidance and resources to consumers on our blog. It is our intention to demonstrate to consumers that the proposition that a timeshare is the most affordable option, is misleading. There are many other ways that you and your family can enjoy vacations, from discounted last-minute travel, to Airbnb and HomeAway™ options to rent short-term accommodation affordably, around the world.
Timeshare membership and maintenance fees can (and frequently do) increase over time. Read the fine print in your timeshare ownership contract, and it will appear as though the only concern owners need to have, are small incremental increases, often consistent with annual inflationary costs. However, companies like Diamond Resorts and RCI have infuriated owners by dramatically increasing both membership and maintenance fees, creating real financial hardship for their members. A practice that is “all to common” worldwide, in the timeshare industry.
The problem of course, is that by the time the fees have increased to a level that the timeshare owner can no long afford to be a member, the reality of being trapped within a legally binding contract sets in. Feeling angry, betrayed and mislead, timeshare owners begin a lengthy and often unsuccessful battle with their timeshare, while fees, penalties and legal consequences begin to stack up.
Our Founder Started Briefly as a Timeshare Sales Person
The founder of Aconsumercredit™, began as a timeshare sales professional. During his time working with timeshare developers and sales teams, he became informed about the sales practices, and methods that timeshare companies use to manipulate hardworking families. He was so bothered by what he saw, and the lack of ethics within the industry, that he resolved to do something about it as a consumer advocate.
Since 2004, Aconsumercredit™, has helped hundreds of families find relief and legal options to address fraudulent timeshare sales practices, while petitioning for consumer rights against some of the timeshare industry’s biggest and best known organizations. The team of timeshare cancellation counselors at ACC are committed to providing support and resources, and work diligently to help our clients resolve their timeshare problem in twelve months or less.
Talk to one of our expert timeshare counselors. We evaluate consumers based on a case-by-case basis to determine avenues and approaches to help cancel the timeshare contract for good, while reducing or eliminating any further damage to personal credit. Protect your credit, and free yourself from the burden of owning a timeshare. Call 1-800-587-EXIT today.