If I gift points, what does it cost me?

[Stargazer65]

If we wanted to book a vacation for our kid(s) as a gift, how do I figure out what the cost was to me? I mean that literally in dollar and cents, not any esoteric value.

If I assume 1 year of points from 1 specific contract to book the vacation.

This is what I figure:
Total Contract Cost/Total Years of Contract + 1 year annual dues = My Cost

If I use more or less points just ratio the cost (For example if using ¾ of the pts for a year just multiply by that fraction)

Tell me if it makes logical and mathematical sense, and whether I’m missing something. Thanks.

 

[Meglen]

Just go pretend to rent points for the days and see what the sites are charging. Also if it's a gift why do you need to know? Insurance? Taxes?

 

[CarolMN]

There are many ways to figure cost and IMO, there is no one right answer. ( I assume you want to do this to be "fair" to other kids who you want to give something comparable).

For a gift to my kids, I would probably only include the cost of annual dues. I wouldn't consider the initial cost because I would have paid that even if I didn't make the gift, and that is my out-of-pocket cost for the year.

Sone might include the cost of financing ( if they did), and there might be some logic for supporting "opportunity" or "replacement" cost. ( I would have to take another vacation if I didn't use my points myself).

Some might use the cost to rent points. Some might use the cash price from Disney, or a discounted cash price.

So, lots of ways.

 

[Stargazer65]

( I assume you want to do this to be "fair" to other kids who you want to give something comparable).

Yes, this is what I'm thinking of. So in that sense I'm just looking for something that makes me feel right and consistent about the way I figure it out.

 

[zavandor]

If you want to know the cost to you, I would split the cost of the contract by the number of years remaining and then add the Maintenance fees for the year.
For example, I bought my contract for $50pp with 42 years left, so the cost per year is $1.19. Add the MF for this year $7.111, the total is $8.30per point. If the stay costs 100 points, the cost for you is $830.
This is an imprecise calculation, and ignores the Time Value of Money and inflation, but it's quick and easy.
There are 100 other possible ways to calculate this, no one necessarily better then the anothers. Just use what you're comfortable enough with.

 

[miTnosnhoJ]

I think that looking at rental sites for comparable stays is the fair way if you want the full value that you could obtain if you did not make the gift. If you just want to cover out of pocket costs, dues is fine.

I would not consider purchase price divided by years in the contract to be a good method. This method does not account for the time value of money. Vacations that are near are worth more than vacations far in the future. Consider if you had 40 years left on your contract. Give the first 20 years to one child and give the second 20 years to another child, and step back and see if they think that is fair.

 

[Lorana]

Personally, I wouldn't factor in contract purchase costs, but I would have bought this anyway, without gifting it to the kids, so that's really my buy-in cost. If this were an annual gift to the kids, though, that would be different - then I would factor in the buy-in cost, since they are using it all the time, not me.

If you would have rented out the points, I would potentially consider what I would have gained in value had I rented them out, but at the very least, I'd base it on my dues cost, since that's what *I* would pay out of pocket for this in a year.

 

[KAT4DISNEY]

If we wanted to book a vacation for our kid(s) as a gift, how do I figure out what the cost was to me? I mean that literally in dollar and cents, not any esoteric value.

If I assume 1 year of points from 1 specific contract to book the vacation.

This is what I figure:
Total Contract Cost/Total Years of Contract + 1 year annual dues = My Cost

If I use more or less points just ratio the cost (For example if using ¾ of the pts for a year just multiply by that fraction)

Tell me if it makes logical and mathematical sense, and whether I’m missing something. Thanks.

That makes sense for the reason you want to know.

 

[Stargazer65]

I would not consider purchase price divided by years in the contract to be a good method. This method does not account for the time value of money. Vacations that are near are worth more than vacations far in the future. Consider if you had 40 years left on your contract. Give the first 20 years to one child and give the second 20 years to another child, and step back and see if they think that is fair.

I'm not sure. From a point perspective it should be the same, right? If I gift a year of points to one person now, and gift a year of points to another person in 20 years...isn't that gift of equal value? (Same contract)

Are you thinking inflation, if you just gave equivalent cash? But since I was also adding the cost of dues, that would more than account for inflation.

 

[MICKIMINI]

If the contract is yours and you pay the MF', I'd say a spade is a spade. 100 points now is the same as 100 points next year. Gift each child x number of points and not overthink it. Good luck!

 

[808blessing]

I would say dues only for my child. For a friend, contract years value plus dues. For a distant acquaintance, rental value. For my own purchase cost, per point value with years of contract, inc closing costs, etc. For my own neurosis, all of that plus commission.

 

[DVCanadian]

Your cost for gifting points would be the dues associated with the points.

Everything else is accounting, not actual costs.
Keep it simple.