Imagine if there was a system that would allow you to pick out an item from a store, let you pay it off in regular increments without charging any type of interest, and upon the final payment the item would be yours. This kind of strategy would make budgeting for large ticket items a breeze, remove the risk of a January holiday spending spree hangover, and would provide a guaranteed way to hide “presents” from prying eyes and hands. This system exists and is thriving due to the recent credit crunch. The process is call buying on layaway.
Until the popularization of credit cards, layaway was the common way to afford expensive items. The buying strategy was launched out of need after the Great Depression. Retailers were still in the business to sell for profit and consumers were still in the need of goods to help improve their quality of life, and that was how the layaway system was born. But as credit became more readily available, the layaway system lost its popularity.
However, the holiday season of 2008 ushered in a new wave of retailers offering the option of buying on layaway to their customers. With the economy in turmoil right smack dab in the beginning of the fourth quarter, retailers started to develop alternative ways to keep the cash coming in, and it worked.
Buying with layaway is a great option, especially for those who are trying to break their credit card spending habits. Not only will the process prevent you from risking any of your hard earned cash going towards interest charges, but the act of buying on layaway will help you sharpen your budgeting skills. Additionally, if you put an item on layaway and the price drops, you may also be able to get your total cost adjusted to the current sales price.