How to Layaway the Right Way

shopperIt’s that time of the year! The stores are a buzz with holiday displays, “wish list” magazines are filling mailboxes, and the holiday deals are already under way. With all of the sparkle and excitement it’s very easy to get wrapped up in the holiday spirit and buy the perfect gifts for that special someone.

The stores are also making it easier for shoppers to spend money by offering layaway programs. During economic uncertainty layaway programs have boomed in popularity as an affordable alternative to using credit. Major retailers like Walmart, Kmart, Sears, and Toys R Us began offering their programs in September.

With advertising touting “free” layaway, “easy” and “convenient” shopping, and “affordable holidays,” it’s easy to get in over your head with holiday purchases.

How to Make the Most of Lawaway

Make a List and Check it Twice

Layaway is a tool to allow you to spread out payments on the items you would like to purchase. Layaway is NOT a tool to allow you to buy more than what you can afford. An extra item here and there still adds up and can put your whole layaway purchase at risk. Make a list of people you would like to buy gifts for and what specifically you are getting for that person…and stick to it!

No Such Thing as Free

While the signs in the store may say “free,” it doesn’t mean that they are free. There is always fine print. While there may not be a fee to set up a layaway account there is usually a down payment that is required. There are also cancellation fees for most programs.

No Two Layaway Programs Are Alike

Be sure to read the details to know how the program works so you aren’t caught off guard by something in the end. With some programs you are not able to cancel just a part of the order while others you can. Some programs allow you to price match an item you have in layaway while others will not. Some programs are available both in stores and online while others are strictly online.

Alternatives to Layaway

If you would rather not juggle trying to keep the information for multiple layaway accounts straight in your mind while you’re busy shopping, there are other alternatives.

Bank Holiday Loans: many institutions offer a special holiday loan program where you can get a loan for a set dollar amount at a set interest rate.
Holiday Savings Accounts: financial institutions offer a holiday savings account where you deposit a set amount into the account each month with withdrawal restrictions. Then on a set date, you are allowed to withdraw the funds that you’ve been saving all year to go shopping with.

Ultimately, your best bet is saving for a cash holiday.  Nobody wants to pay on holiday debt all year long!

How do you you finance your Holiday spending?  To you save all year?  Buy throughout the year?  Save up?  Lay it away?  Or charge it?


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