There are purchases you need to make immediately and there are those you need but can put off for a time. If you do not need to get your item right away, you can choose to postpone the purchase until you absolutely need it.
However, it is a different matter if you need to buy the item and you are short on money. In this situation, you can purchase on layaway, which is also helpful if something is quite pricey. This gives you a chance to get the item eventually.
While layaway is a viable method to purchase, you should figure out if it is feasible for you. There are some guidelines on when you should or should not buy things on layaway and we’re going to tell you about them next.
What Is Layaway Anyway?
The simplest way to explain layaways is it is a way of purchasing items by placing a deposit. The main thing about it is you “lay it away” now so that you can pick it up later after you have paid off the full balance.
You also have the option of not only laying down a deposit, but you can also pay off the rest of the balance in increments.
Is it Smart to Buy on Layaway?
This method of buying is designed to help individuals with limited disposable income to purchase products that are priced above their means.
This may be an attractive choice, but it is always important to keep in mind that it comes with responsibilities. Many layaway plans charge fees and have strict payment agreements.
It also opens the possibility that you may face losses if you fail to complete the payments.
Despite this, keep in mind that this option can be beneficial to you, especially as it gives you some leeway to make the purchases you need. But the key is to try to only use the option for needs rather than wants.
How Layaways Can Be a Smart Idea
Different Plan Options
You want to make sure that you purchase on layaway at a shop that offers a plan that you can manage. Remember that there are fees on top of your deposit and balance that can make the purchase less affordable.
Fees may be charged for the service, cancellation, or restocking. However, some stores offer more favorable plans.
So before you put anything on layaway, find out all the places you can buy that item and figure out what their layaway conditions are. This way you can buy the item on a layaway plan that suits your needs.
Compared to credit cards, purchasing on layaways is a good idea if you want to avoid paying interest. Yes, you will be paying the down payment, which is usually a percentage of the item’s price.
With credit cards, you may not be paying any amount at first, but your repayments, later on, will include interest on top of the cost of the item.
With layaways, you will be paying a portion of the price and will be paying for the balance. Even with the various fees charged by stores, this method of purchasing is still much cheaper compared to credit cards.
The biggest problem is that if you end up only being able to pay off half of the cost of the item, but can’t pay the rest, you lose the item and your money.
Reserve the Item You Want
Lastly, this option is a good idea if you want to buy items that quickly go out of stock. You simply need to go to the store, pay for the down payment, and the item will be reserved for you.
Unlike buying with other credit options that require you to get and pay for the item right then and there, this gives you the ability to “lay away” the item even before you fully purchase it.
The Bottom Line
Purchasing on layaway can be a good idea if you have a plan for paying for the item in full. If you know that you’re paychecks are not going to be able to cover the cost of those fancy shoes in the coming months, you shouldn’t use layaway.
Additionally, layaway should not be used for purchases that you don’t actually need to make. It doesn’t make sense to tie up your money if you don’t really need to have the item in question.