Layaway Low Down

If you're trying to curb your spending this holiday season, using a layaway program might be the way to go. Sue Perry, Deputy Editor of ShopSmart Magazine, explains.

Layaway is a way for consumers to buy items without paying the full price up front. Unlike credit card purchases, though, your item of choice stays at the store until you've finished paying for it. You pay a one time fee up front, and then pay the balance of the item through a payment plan. "The big advantage is that you're not paying any interest," says Perry.

Layaway isn't just for in-store purchases anymore, either. You can now use layaway for online items, as well as for trips and concert tickets. LayawayVacation.com offers great deals on getaways. "Even venerable old companies like Sears and KMart that have had layaway plans for years and years, now they're rolling out new online versions," says Perry.

There are even specific websites dedicated to layaway plans like Elayaway.com and Layaway.com. Through these sites, you can be linked to hundreds of retailers that offer layaway programs on many different types of items.

Just because you're paying something off over time, though, doesn't mean you can spend beyond your means. Perry suggests setting a realistic budget. Making your payments is important; if you don't, you run the risk of losing the money you've already invested in the item or losing the item itself.

To combat this, Perry suggests signing up for automatic payments. "You can get email alerts to remind you to pay," says Perry. "Better yet, you can have the money taken right out of your checking account, so you don't even have to worry about it."

As with wholesale retailers, you can save a lot of money with layaway programs if you buy in bulk - that is, buy more than one item at once. "You can buy one big item... but supposing your layaway plan has one flat fee... why don't you pick out a few items at the store that you're thinking about doing, put them all on the same layaway plan," says Perry. "If you do individually, then you're accruing all those little service fees."

It also pays to shop early, especially for hot holiday items. While the rest of your neighbors are standing in the cold on Black Friday hoping to catch some bargains, you'll be sleeping in peacefully knowing that your item of choice has already been reserved on layaway. "It's not going to run out by the time you get to the store," says Perry. "You're assured to get that hot ticket item for your son, daughter - whatever they want."

For more tips on layaway and other money saving ideas, visit www.ShopSmartMag.com by clicking here.

By Erin Petrun