Ray’s Take You’re on vacation with your family. Everyone is relaxed and having a great time, so you think: Why don’t we quit “renting” our vacation and buy a vacation home here? What could be better than having a place to build family memories for years?
It sounds like a great idea. It might even be a great idea, but not for many of us. Even now, when the price of vacation homes has dropped, they’re still a luxurious expense.
It’s not just the mortgage expense. There could be hundreds of dollars in monthly costs for utilities, lawn care and security. Then there are property taxes, insurance and maintenance plus the costs of getting there and back. It all adds up!
Of course, you could recoup some of the cost by renting out your vacation home when you aren’t using it. However, that comes with its own additional expenses – rental agents and increased maintenance due to wear and tear. Bottom line: even with rental income, you’ll still be paying plenty.
Before you fall in love with the idea of a vacation home, get out that calculator and add it all up. If the numbers work, you feel confident about all your income streams, and you aren’t sacrificing your retirement security, maybe it will be OK. But remember also that vacation preferences can change. If you really wanted to be in the mountains but keep going to the beach because you need to get your money’s worth, how relaxing is that vacation?
Before you make the jump, try one more calculation. Divide the annual projected cost of your vacation home by the number of days you expect to spend there. That’s the cost of your future vacations per day. What could you do with that amount of money if you simply rented someone else’s vacation home instead?
Dana’s Take Of course you can build up wonderful family memories in a vacation home, but it’s just as easy to strengthen family bonds during any type of vacation together. Whether it’s camping or cruising, a car trip or a plane ride, spending time together is a plus for any family.
We recently took our kids out west, sharing some of America’s most magnificent scenery with them. Not only did we share eye-popping scenery like the Grand Canyon, we also shared stories about the history of this country.
Afterwards you can make the memories indelible by creating a memory book. It’s pretty easy to download photos online into a memory book format. Let each family member add captions of what he or she liked most and the funniest moments. With digital memory books, you can order duplicate copies for family members. When it’s delivered, stash souvenir maps, brochures and ticket stubs inside.
You’ll have a wonderful record that you can return to again and again. Plus, your children can share it with their own kids later.
Ray Brandon is a certified financial planner and 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. Contact Ray Brandon at firstname.lastname@example.org.