Look for and Use Layaways

by Bill on February 27, 2012

I remember when Wal-mart announced it was closing its layaway program, well before the housing crash. Nobody much cared. Why? Instant credit gave way to instant gratification. Along with it though came the high-interest finance plans with the 21 percent rates. When 2008 came along, everyone suddenly missed layaways. Since then layaway plans have come back in vogue again. Many businesses now offer one. Kmart never got rid of there’s.

Why use it? Like I said up top, the high-interest rates of the finance plans offered by either the credit companies or the banks leave you paying for an item years after you actually needed to.

Search for Layaway
Actively look for businesses that offer a layaway program. Even if the business is an hour away, go there and ask questions. An hour and some gas is still a hell of a lot cheaper than high-interest financing. Look for small businesses too. Many of the smaller shops may have some type of layaway system in place. No, you won’t get to take the item home, and you may be forced to pay in 60 days – but its still cheaper than being in debt.

What if you’re at a store, and you find something you really like? If they offer financing, ask about layaway. Don’t just assume there is no other option. Ask. If they want your money bad enough they will let you know.

Rent-to-Own is NOT Layaway
Let’s get this part straight – stores that offer furniture rental or “rent-to-own” are not offering you a layaway or any type of GOOD payment plan. For that matter, you might as well go get bank financing for the same item at less cost and still be in debt. No guys and gals, this is the worst way to get big ticket items.

How to Use Layaway
Find out how the program works for that business. Not all businesses have the same type of system in place. Some offer low payments, some have minimum deposits. Many programs have time limits where you either have the items paid for or you have a specified number of days to make your next payment.

Using Kmart as an example (only because I did this once with a laptop), you put $10 down and they calculate the amount owed bi-weekly on the remaining balance plus tax. You have two weeks to get the next payment in, and three months (90 days) to pay it off. They hold it until you pay the rest, and you sign a contract. You can pay weekly, or a month in advance if you can work it better that way.

Reasons to Use Layaway
This should be obvious but it may not be.

  • If you use layaway you pay one-half to one-third of the cost you would pay using an installment plan.
  • Use layaway to keep yourself on a spending budget while avoiding paying extravagant prices. Set up a specfic dollar amount you can afford to put down on something each week or month, then make a list of items you need. Cross off each item as you take it off layaway and replace it with the next item on the list.
  • Using layaway plans allow you to start shopping for items out of season and within your time frame; school clothes, appliances, electronics and furniture are all items that fall within this relm.
  • Layaway also curbs the instant gratification addiction by forcing you to wait for the item. Good for shopaholics maybe?

A Few More Tips on Using Layaways

  • Don’t put a whole lot of things on layaway at one time. You may regret that if you cannot take single items off the layaway or have to cancel it. I ran into that at Wal-mart when they had their old system.
  • Don’t think you can splurge because you just pay it off in three months either. Money is still money; and even though you are saving on interest, you could still be spending too much.
  • If an item is eligible for layaway, check on a lower cost version first – then put that item on layaway. If the lower cost item isn’t available for layaway, you may be spending too much.
  • Don’t try putting books and loads of small items on layaway – most stores won’t allow that. Buy one little thing at a time to get around this.

Hopefully the layaway plan is making a comeback in this country. I would like to think it is. The days of instant gratification and installment plans should never have been allowed to begin with.

What’s on your layaway list?

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