Hull Financial Planning Personal Finance FAQ Series: Should I Put an Item on Layaway?

Layaway is making a comeback in stores. It can be tempting to put something on layaway to get it. Forced savings, right? Not so fast.

Take a look at the video below and find out what to do. While you’re at it, you can get my 52 week Financial Game Plan by filling out the box right beneath this.

Should I Put an Item on Layaway?

Continues Below

The transcript follows.

No. Putting an item on layaway is often even worse than putting the item on a credit card. The idea is that by making payments for the item, you’re forcing yourself to save it.

I have a better idea.

Rather than paying the store to hold your money and paying a princely sum to do that, why don’t you set aside that amount every month until you can afford the item?

That way, it will cost you less, you’ll be paying cash, and you’ll be getting in the habit of saving up for big purchases. It will also break you of the habit that thinking that credit is the answer for all of your spending desires.

Plus, there is NOTHING which you can buy on layaway that you HAVE to have today. Be strong. Be disciplined. You’ll be glad that you did, and, in the interim, you may discover that you didn’t even need the item in the first place!

About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.