The Christmas buying season is here even earlier this year. We're looking forward to Thanksgiving but the stores already have their sights on maximizing their Christmas bottom line. Holiday sales are expected to rise 4.1 percent this year.
It seems that our kids just went back to school and the leaves are still on the trees, but the major department stores have already begun their layaway service. In fact WalMart and Toy “r” Us began a full month earlier this year.
Layaway is a good tool to help you with your shopping and budget. Using layaway has several advantages – helps you avoid impulse buying, forces you to budget and helps you to avoid getting into trouble with credit card debt. You can do your own layaway at home with your kids.
In MONEY DOESN'T GROW ON TREES, I teach my Four-Jar Budget System which is saving and budgeting for kids. Allowance money is divided among the four jars: Charity, Quick Cash, Medium-Term Savings and Long-Term Savings.
Medium-Term Savings is actually layaway at home. It teaches deferred gratification. Help your child make a goal to save for. Go window-shopping at your favorite department store or on the internet. The age of the child should determine how long the saving should take. The older the child the more ambitious the goal. Yes, you're teaching delayed gratification, but you're also teaching gratification - three weeks is a long time to a toddler. It's a good idea to print out a picture of the item being saved for and attach it to the Medium-Term Savings Jar as an incentive.
When my kids were young we used this method. You may be surprised to find out how different your kids are from one another. My son decided he wanted a Walkman – the prehistoric ancestor to the iPod. My daughter had her sights on a special pair of designer jeans – some of you might be old enough to remember all those commercials with Brooke Shields – those jeans were all the rage.
Both kids were certain they knew what they wanted and were patient enough to save up but a funny thing happened along the way. My son never wavered. He knew he wanted that Walkman and nothing was going to stop him. After a few weeks of saving, those must-have jeans no longer seemed so must-have to her. She decided – and it was her decision – that a pair of regular jeans would be just great. The logo on the rear pocket wasn't as attractive as it had been.
They both learned valuable lessons. My son treasured his Walkman for years. In fact, he took amazing care of it. My daughter discovered that it might not be so important to have the most expensive item just because it's the trendiest.
As with all good tools you need to do your homework in order to use in-store layaway safely and correctly. Make sure you read the fine print before you begin. Putting an item on layaway involves getting into a contract with the store. Read the rules, payment schedule and fees. Some stores have eliminated up-front fees. Others even offer a bonus gift card when your order is paid for. Make sure you really want to buy an item before putting it on layaway.
If you decided not to purchase an item, fees can be costly. For consumers who don't pay on time or decide to back out, money will be lost [wasted]. Not only will you not get your merchandise, you also don't get your service fees back. In many cases there is also a cancellation fee. You will get back any payments you made minus the fees – in the form of a store credit.
Layaway at home or layaway at your favorite stores, it's going to be a long shopping season. I want you to stay financially healthy. If the stores are already trying lure your dollars away from you, it is certainly time to make your holiday budget. After you make your own budget be sure to help your kids with theirs. Be honest with your budget and be sure to stick to it. Don't go into debt in the “spirit” of giving.
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