VOL. 126 | NO. 42 | Wednesday, March 02, 2011
Rays of Wisdom
Dana and Ray Brandon
It’s Spring Toy Season
Ray and Dana Brandon
Ray’s Take: The days are getting longer, hooray.
And, if your family suffers from cabin fever, warmer temperatures may have you fantasizing about something new and exciting. Fantasies may be stronger for the increasing number of families not trading up houses or for families expecting a sizable tax refund.
In the coming weeks there will be auto shows, boat shows, RV shows and home expos. It’s what I call The Toy Season.
With the promise of summer and a little extra cash, it’s easy to be tempted by fast boats, snazzy jet skis, rugged ATVs and bubbling hot tubs.
And, to help you part with your money, manufacturers will offer attractive “show only” pricing and easy financing.
Even if you have an emergency cushion, college funds on track and your retirement plan in order, proceed with caution. The road to under-funded retirement is littered with discarded toys.
Glossy brochures omit hidden costs. For example, there is the cost of financing. By the time you make the final payment, you may have paid enough to buy two. Stick to cash.
Then, there is depreciation. The moment that shiny, new toy is off the lot or the boat ramp, it loses significant value. Buying used may get you a better value.
Check the insurance costs with your insurance agent before buying.
Always expect additional costs. Your new toy may increase your fuel bill, require a special trailer or even a bigger vehicle to pull the trailer. Hot tubs and pools require extra energy, plus chemicals and you may need professional services.
Hit a rock with your new boat, and you’re shopping for a new propeller in addition to paying slip rental and dry docking fees.
Not a party pooper, I’m a firm believer in family fun. Financially, however, it often makes sense to rent “toys” rather than buy. Renting may seem costly at first. When you consider the hidden expenses and responsibilities of owning, over the long term it may make sense.
Dana’s Take: Parents often make choices they think will give the family more time together, such as buying a swimming pool, ski boat or beach condo.
Remember, activities your children enjoy at 8 may be very different at 16.
When teens become licensed drivers they may feel entitled to drive the boat and invite a boatload of friends, perhaps without you. They may host a pool party while you’re away.
During college it will be spring break at the condo, minus responsible adults.
Will that keep you awake at night?
Older children pulling away from family is a natural progression bright, shiny objects won’t stop. The danger is not having time for your kids when they want it because you’re slaving away to pay for toys.
Ray Brandon is CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a Licensed Clinical Social Worker (LCSW).