Pre-Orders and Financing

I make payments on my pre-orders. That way I know I can't spend it elsewhere, and that the item will be paid for by the time it comes out. If the item gets cancelled I simply get a credit, and use it for something else.

Bill

I only preorder when I know that funds will be available when the item is scheduled. I have had to "re-budget" multiple times for the same item when the delivery gets extended and extended and....

Gilly

I am heartened to see so many here share my view, which BReece put so well: "If you don't have the money NOW, don't fool your self and think you can save FOR IT."  Apparently model railroaders are, whatever else they may be, prudent and wise people.

I am not against pushing your finances for a good and necessary cause.  We've all done it, I'm sure.  But model railroading is supposed to be fun and relaxing, and I would think worrying about paying for something would take the edge off that.

I've always figured you don't even push the envelope on finances when buying toys.  A number of years ago I bought an exotic Italian sports car - red, mid-engine, 200 mph - the whole nine yards.  An acquaintance looked at it and asked, "If you don't mind, what are the payments on something like this?"  I told him I didn't mind, but I had no idea: it had never even occurred to me to ask - or to finance so utterly foolish a toy purchase.  The guy is in bankruptcy again, at age 66, for the second time in his life now (that, I understand, is rather hard to do because it takes so long to get out the first time and then get that far in problems again).  He is not a model railroader..

Remember what Dickens said.  Best to be the guy who only spends nineteen pounds six, not twenty pounds six.

I think everyone's methods posted here are good.  However, Bill's method is one I never thought of, but would solve the problem I stated last night of my concern of a loss of job.  The money would be spent like anything else, and I wouldn't feel guilty being obliged to pay for a $400 locomotive.

Bill, thanks.  I will have to contact my hobby shop owner in regards to this.

+1. My folks were raised in the Depression. We never bought anything other than a house on credit. I have followed that philosophy all my life. If you don't have the money in hand don't buy it.

Pete

Your welcome Mark. I have been doing it that way for quite a while now. It works for me for the same reasons you had mentioned in your post.

Bill

BAD ADVICE

Dicipline, is much better and it will build character.  Not too many of us have the cash on hand for everything we want.  So we sacrafice and save.

When GGD announced the El Capitan last February I wanted it more than any other O guage item I have ever seen.  Slight problem... the 12-car set list for $3,000.  I did not have the cash on-hand.

Well these cars should be on-shore in May and I am happy to report that I have saved enough allowance to reward myself.  

Where there is a will, there IS a way.   If you want it bad enough, you'll find a way.

Good idea about the colors, I will have to try that with mine. I have a few other spreadsheets that use color, but for some reason I never thought of doing that for my train SS.

I also do as you do here, and sometimes pay things off before shipment as well. Helps out my LHS as they are a small shop and it helps their cash flow. I also always pick things up within a day or two of their arrival at my LHS. They give me a little more of a price break for pre-ordering too, so we both come out better.

I have a Lionel ceramic Locomotive "piggy bank"

quote:

Dicipline, is much better and it will build character.  Not too many of us have the cash on hand for everything we want.  So we sacrafice and save.

Not purchasing something you want because don't have the cash is a form of discipline too.

This how I do it.  Just remember they're only toys!  There's no such thing as an emergency here.  One last thing - never ever put it on a credit card.  Put it on a debit card.

Mark,

I am sure they will appreciate this, my LHS does and I do the same thing fairly often with them. They might possibly even give you a little extra discount.  

Good advice on making train purchases, however we use our credit card for every purchase we make, except Costco (they don't take Visa). We get a 1%-5% rebate on every purchase make with it and also get to use their money for a month to earn it. That's better than bank interest these days. The key is to NOT charge more than you can pay for each month, which we watch pretty carefully. That's where the discipline comes in and the great advice above - 'if you don't have the cash on hand, don't buy the item'.

Purchasing this way, we usually get a check from the credit card company about every six months for between $150-$200. Nice little bonus to put toward another train or other purchase when you are on a fixed income. When used properly, credit cards can be used to your advantage and a pretty good one too. Just don't over do the charges to where you can't pay it off monthly. If you do that you will go in the hole pretty quickly.

That's my method.  As for "pre-ordering," well, I don't like it and don't do it.

As mentioned many times above, I'll look at my RR-envelope before I order. It is

out of the way. I will feed it with left-over cash at the end of the month, plus any

money I get from the occasional RR show sale.

But, my favorite trick is that I essentially do not order a big-buck item that is not

"in the Envelope", but when it comes in, if possible, I just pay for it out of current

cash flow - leaving the Envelope untouched - ready to slowly grow and to do more financial "backup" in the future. 

Compared to many, my life is pretty simple, financially, and I use my CC as a short-term interest-free loan - I treat it like a debit card. I never pay interest. If I don't have the

money, I don't buy it. Anything.

However, I am approaching a crunch where The Envelope might actually take a major hit.

I spent a bit while forgetting the Lionel USRA Heavy Mike (L&N) that is due in March.

Hopefully there will be another delay. Delays can be your friends. 

Thanks for all the replies. I appreciate the advice. I've have never pre-ordered an item without having the money for it when I place the order.  My issue is more about making sure I still have the money when the item arrives.  I keep a monthly budget that covers mortgage, utilities, food, gas, etc.  All the necessities, but not the hobbies, savings, etc.  After bills are paid, I usually try to put half of the monthly "extra" money into savings and the rest goes to fun stuff.  So when I order an item, I do so knowing my account has the money in it for the purchase.  But what happens to me sometimes is I forget the money is already allotted for that purchase and months later I will see something I want to buy.  I check my account and there is money to make the purchase, so I do.  Then the pre-ordered item arrives and I've spent the money originally allotted for it.  I always keep enough in savings that paying for the pre-ordered item is not a problem, but its just a pain in the butt because now I need to replace the savings. I like the idea of a separate train account either through the bank or keeping money put aside. I hadn't really thought about the separate account idea before. I guess I also need to keep better track of the pre-orders I have made.

I have to admit it... I'm a huge Dave Ramsey fan.  Unless I have the cash, I don't buy it.  

I also have a dedicated train account.  All money from my part time job goes into this account.

Jeff Davis

I'd just move out of TN, like I did. It will be a win / win on many levels.

Pre-ordering from a established dealer is fine and most feel ok with a deposit of not more than 10%. When their is a small deposit both parties feel obligated to honor it. I do know of some dealers who have not honored a pre-order without a deposit because the item got hot. The upcoming Vision Reefers are sold out everywhere and I can see this happening. What really gets me is a manufacturer who wants you to pay in full for a item and use YOUR money to produce that item. That to me is insane and a recipe for disaster.

There are many fine dealers here besides us and I urge you to support them!