According to a recent study from NerdWallet, brought to our attention by investing news and resource site The Motley Fool, more Americans are saving their money for vacations than for retirement.
Among a poll of more than 2,000 U.S. adults, “saving for vacation” ranked fourth on the public’s list of financial goals (31%), while “starting/increasing retirement contributions” came in at fifth (28%); both were outranked by “paying down debt” (58%) and “saving more in general” (53%).
While not particularly shocking, this is important information, which sheds a light on how Americans are spending their money – and why so many may be susceptible to the psychology behind the timeshare sales pitch, which our own Michael Finn has called “the ‘mac daddy’ of impulse buys.”
Given the importance of vacations in the collective American consciousness, it is easy to see why so many may be enticed by the “hard sell” behind timeshares: Guaranteed time at a resort and a flexible points system certainly sound appealing on paper, particularly for an individual or family eager for time away.
However, assessments and maintenance fees, combined with the “off-the-reservation” booking system favored by multi-development resorts, make timeshare ownership less financially practical than many consumers are led to believe during their sales pitch.
As we’ve noted before, the ongoing costs of timeshare ownership add up. And, when they’ve become too much for owners to bear, their options for extricating themselves from their obligations remain, in many ways, extremely limited.
Making matters worse? As the writer for Motley Fool points out, most Americans aren’t necessarily as financially well-off as they’d like to imagine, particularly when it comes to saving for retirement, when most of us imagine that we’ll finally get to take that lavish vacation or really put that timeshare stake to use.
As the Fool points out:
“The typical household aged 44 to 49 has just $81,347 socked away, while households between 50 and 55 have an average $124,831 in savings.
Near-retirees aren’t doing much better. The average balance among 56- to 61-year-olds is just $163,577. Furthermore, almost half of American families have no retirement savings at all.”
The article also notes that “39% of the population has absolutely no funds available in immediate savings,” period.
With all of this in mind, a major purchase, such as a timeshare or other extravagant vacation-minded purchase, could permanently add to your debt and “put your retirement at risk” – as well as your credit and your overall long-term financial security.
If you don’t have a firm grasp on your finances and a thorough understanding of what a commitment to shared vacation ownership can end up costing in the long run, you could well be making a “major lifestyle mistake,” as Brian Preston and Bo Hanson put it in U.S. News & World Report.
For more on this study – and the many risks that Americans are taking with their retirement savings – we encourage you to read the full report over at Motley Fool.
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.