Layaway the Right Way
Though many of you may not be thinking about the holidays yet, for others this is the time of year that Christmas budgets are formed and the to-buy list is compiled. No matter how hard I try to stick to my budget each year, I always find a way to spend a bit extra on a special someone – a party host I forgot, or those coworker secret Santas.
Everyone is tight on money these days, and finding a way to pay for these items can be tough. Some turn either to their credit card, and others turn to the old favorite: layaway. More and more stores are offering layaway this holiday season, from Kmart to Best Buy to Toys R Us. Layaway can be a better alternative than your high-interest credit card, but only when done correctly.
Here are a few tips to keep in mind as you start planning for those holiday purchases:
- Read the fine print on the layaway paperwork and plan. The line you’re in with other 30 people behind you and the impatient employee at the checkout counter aren’t going to be there when something goes wrong later. Read ALL of the fine print, and ask questions if you’re not sure about a policy. Remember, knowledge is power!
- Think about the value of the item. Is this truly a gift that you need to purchase for someone? Is it worth that layaway initiation fee? There’s a hefty price for changing your mind later, so make sure you’re committed to this particular item before enrolling.
- Do the math. Before you sign the paperwork, in fact before you even go into the store, sit down and calculate the cost of the item on layaway vs. the cost of the item if you use your credit card. Obviously, take the cheaper of the two!
- Nothing is forever. Most stores will only hold on to your items for a certain amount of time. Make sure that you have enough cash for the amount of time the store is willing to hold on to this item for you. If something goes wrong and you don’t end up paying in time, you could end up forfeiting all of the money you’ve already spent.
- Some stores prefer to set up automatic checking withdraws to ensure payments are made and to save you the hassle of having to come in physically. This has its pros and cons, but remember that if you choose autopay and overdraft, you can face a fee both with your bank and the merchant. Mark your calendar, set an email reminder and don’t forget that money is coming out of your account.
- The internet is a wonderful thing. When we’re in the stores, and we see a highly sought-after item marked down and are tempted with layaway, we often times impulsively take advantage of what seems like the perfect situation. Search for internet promos, check other sites and then consider whether or not your great deal is as amazing as it seems.
The most important thing of all to remember during the holiday season is if you have the cash to pay, then pay. It’s hard to part with money this time of year, but given the expense that can incur by using a credit card or layaway, it’s much better to suck it up now than continue to pay for it later. Remember, no one will know how much you paid, they’ll just be grateful for the gift, so try to spend as little as possible. Happy shopping!