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.
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!
Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.
You can read more about him in the About Page.
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