November 19, 2012
Just in time for Black Friday and the upcoming holiday season, let’s take a look at the newly popular layaway. It went out of favor throughout the 90s and 2000s as we reached for credit cards as a way to pay instead of… well, saving money and buying it!
If you’re not familiar with the term, layaway-ing allows you reserve a product at a store and then pay over time. When you pay for the product in full, you get to take it home! There are some positives of layaway, such as the ability to reserve a highly sought after item and paying for it up front like people used to.
However, I’m still not a fan, and I don’t plan to use it myself. These are the three reasons I won’t layaway this year:
1. I don’t want my money stuck at one store
In the age of the internet, I’d much rather have flexibility with my money so I can purchase the best deal instead of my money getting stuck at one store. Usually with a little bit of online research, I can find a better deal than through a regular store.
2. I don’t need a layaway account to teach me to save money
If you really want to save up and buy an item, I’d rather save up myself and buy it with cash. The only disadvantage is if you want to reserve the item, but hopefully you can save far enough in advance so you don’t lose it. On a related note, make sure you check out how to nurture your money tree if you do need help saving!
3. I don’t want to pay extra fees
Most programs require an upfront fee, from $5 at Walmart to an increasing fee at Sears depending on how long of a payment contract you use ($5 for 8 weeks, $10 for 12 weeks). It’s not all bad though because Walmart refunds the $5 fee to a gift card if you fulfill the contract and Sears offers promotional periods where they don’t charge you the fee. In almost all cases, you forfeit your upfront fee if you don’t fulfill the layaway contract.
That being said, there are some people who probably should use layaway – just like there are some people who shouldn’t use credit cards! If you have problems saving money and would purchase with a credit card otherwise, I say go for layaway.
Black Friday spending was estimated at $11.4 billion last year and most experts see that increasing this year. If you plan to go out, make sure you set your budget in advance so you get too crazy. Last year the average shopper spent $704 on Christmas – which is already out of hand!