Yes, I know it’s a little early to start talking about the holidays, but it’s never too early to address the financial stress that the holidays cause.
The major source of stress for people struggling with financial issues during the holidays is trying to figure out how to afford gifts for loved ones.
When money is tight and credit is unavailable buying items on layaway can be a great option. In the past layaway was a popular way for people to buy items that they didn’t have the money to pay for, but layaway seemed to die with the rise of consumer credit cards.
With consumer credit cards readily available people who couldn’t afford to pay for merchandise were able to make purchases on their credit cards and pay later. However, since the great recession of 2008 many people don’t have credit or can’t get credit to make purchases. As a result, a number of major retailers like Walmart and K-Mart (in the US) are offering lay away programs. The basic premise of buying something on layaway is that you choose the items that you want to buy and the store holds the items until you’ve paid for them in full.
The advantages of this approach are that you’re able to make affordable monthly payments instead of trying to come up with all the money at once, and unlike when you buy something on a credit card, no interest is charged on the balance owing.
The major drawback of buying something on layaway is that you can’t buy your gifts at the last minute (hence the early post about the holidays). You need to plan ahead and make sure you’ve completed your payment plan before you need the merchandise.
Limiting the amount of personal debt you have will help to improve your financial health and may help you to avoid filing personal bankruptcy or making a consumer proposal.