Pre-Orders and Financing

I sold other items to pay for my last pre order, so I put the cash in an envelope and set it aside until the order came in.

I have an account I only use for trains.  I put the money in it as soon as I preorder and leave it until payment due.  You'll thank yourself for having self discipline later...

Another good bit of advice-don't preorder what you can't afford.

Do a search, this has been discussed many times and there are lots of opinions on this subject.

The train hobby is a bit like the used car world.  Many of us have to sell what we are driving to buy something else we want.  In trains, most people do the same thing.  Trains on the secondary market can be a great buy for someone.  Used trains and used cars are alike.  You better know what you are buying.  I have purchased many used trains and sold many used trains.  I would never sell a used train that has not been fully checked out. 

After you plan your pre orders and are sure you can afford them, start by buying USPS Money orders, I start with about 20% of the total pre order, write the name/s of the hobby shop you ordered from on the USPS MO, that way you kind of mentally say this money is for the trains. Every two weeks, month, or what ever you want, continue buying MO's to finally satisfy the full amount of the order or close to it....Some times I even over bought MO's which is great since now I can either save for later purchases on or even buy a car or two....This way, you are sure of buying with cash you "HAVE"....It worked for me so far for a few VL items with my new addition to Legacy steam effects....Darn it!!!

The problem for me is when several items come in at the same time.  

I have a feeling several big-ticket tinplate items that I pre-ordered will be arriving this month or next.

Odd to say there is relief when a pre-order is delayed! 

I have a local train store and pre-order 90-95% of my train purchases from them. I visit there just about every week. They do a pretty good job of letting me know which orders I have coming in and when so I am able to keep up with my orders pretty well. I also have an Excel spreadsheet that lists all my pre-orders, when the item was ordered, item cost, and the expected ship date so I sometimes double check there as well.

You could get a savings account or similar and set the funds aside there until your orders come in. While working, before retirement, I had a savings plan at work that I put money in for large purchases. That served us very well for a long time, haven't made a car payment in many years thanks to that savings plan. Years ago they used to even pay interest on your average balance on those accounts.  

Then there is the old cash in the envelope trick when saving for something, no special accounts required there. Like the old Christmas funds or homemade layaway plans. One other thing in your favor is the items are never ahead of their shipping schedule, usually always ship later than stated.

A pre-order is an order, and I order only if the money is there to pay for it even if it may be months from now.  There have been times in my life when I had to get creative with "financing" to get by.  But these are just toys.  I figure just do without if there is any worry at all about the cash.

If you don't have the money NOW, don't fool your self and think you can save FOR IT.

don't buy"toys" NO MATTER HOW EXPENSIVE OR CHEAP, if you don't have the money to spend.

Brent

I think most dealers will only refund your deposit if the item is cancelled by the manufacturer. It is not the dealers fault the product delivery from the manufacturer takes too long. I'm sure they want to have the cash flow as much as anyone wants to have their ordered items. If there is no deposit then you are leaving the dealer stuck with trying to get rid of the item. Small dealers can't afford a lot of things happening like this. My LHS now requires a deposit because of this happening to them in the past.

So far I have not had this problem. Although almost nothing ever arrives on it's first scheduled date, it usually does arrive within a few months of the scheduled date. I am in no hurry for any of this stuff, so it really does not bother me when it arrives and it gives me something to look forward to. If it isn't cancelled it will arrive sooner or later and I will get it when it gets here.

I keep a record on an Excel spreadsheet, looking at what trains I have and about current value for them. When I sell a train to get money for another, I also estimate the money I will get before it's predicted to ship from my job, as well as keep jot down what I have on pre-order, and if it has or hasn't shipped yet.

If the item is in  red, it means I haven't bought it.

If it's in yellow, it is on order waiting to be shipped.

If it's in green, it has been paid and is on its way.

If you have the money, and you don't want to forget and spend it on something else, put it in a CD in a bank (be sure of the terms so that you can withdraw it without penalty when needed).  That way, it is not easily accessible for impulse purchases.

I keep a record of my preorders and estimated ship dates on a spreadsheet to keep track of my preorders.  It does help me to plan ahead and keep from spending on impulse train purchases.

Andy

I will not buy anything without the means to pay for it at the time of ordering.  That being said though, typically I put a deposit down (not required but I do) and then pay during the course of the pre-order.  The nice thing is, if the item comes in early I have the money to pay it off full.  So I am not leaving my LHS with the goods any longer than it takes for me to find time to get out there.

My big purchases are winding down as I anticipate a move into a new house this summer.  So I only have a few things ordered and have less than a couple hundred bucks to pay when they come in.

I understand where you are coming from.  In my 45 plus years in the hobby I made my first pre-order before Christmas.  I am assuming it will be a while until it comes in, and I'm fine with that.  I agree you have to find a way to set the money aside.  However, financial problems can come into play.  In my case, I am wondering if it was the best idea.  My wife will very likely lose her job come summer or at least be cut back and lose her attractive medical plan.  My company's plan is very expensive, and considering our health problems, I could see my wife no longer being employable plus we could run our deductible to the max.  I have got to keep that money set aside at all costs.  I don't think I will pre-order again.  It takes too long from a financial planning standpoint.

As most here have said, discipline is the key.  Financial discipline is hard regardless of one's endeavor, but model trains are especially challenging because of the missed delivery dates.  i've had items not show up, I've had items show up a year after their stated date, etc.    Personally, I'm done with pre-orders for the most part;  I find that often by the time they do get here, I no longer have that much of an interest in the item and I have already changed things up on my layout.  I'm not one to back out of a pre-order unless their are extenuating circumstances, so moving forward I plan to avoid the experience entirely.  the exception might be less expensive items - $50.00 for a piece of rolling stock isn't the budget shocker that a $1000 train is    It's frustrating sometimes, but lately I'm finding that the things I want aren't even on my radar until I see them in person - case in point, I just picked up an MTH C30-7 at a real sweetheart price.  I would have never pre-ordered something like this, but when I saw it "in the flesh" I snagged it.  

As far as "tricks" for setting it aside;  get it out of your wallet as fast as possible and into someplace that does not provide easy access.   If it's in the wallet or in the nightstand you will spend it... or someone else will   

My credit union makes it easy to have several sub-accounts. I have a separate account just for train stuff. The credit union allows me to have some money automatically transferred to my "trains" each payday. (I also have direct deposit)
I have several other similar accounts.

Been doing this for many years, its worked well for me.

Start a train fund (some kind of bank account) and deposit to it on a schedule that will coincide with the amount you need and the estimated delivery date.

I "pre-ordered" (that is the same as saying irregardless, not really a word) from my LHS. Payment due on delivery of item to store. It was VERY late but I was not on the hook for anything.

I think there's a TON of truth to that statement. 

I was particularly glad to hear the LCT Lionel Lines "uncatalog'd" standard gauge 400E was delayed a few months!  Needed a huge breather after all the stuff from 2014 arrived in November/December!!! 

Of course, all these great "clearance" sales in January/February sure haven't helped either!!!  

David