Consumer Tip of the Week
The holidays are generally an expensive time of year. Even the most budget conscious families find themselves spending more than they intended during the season. While we know it will come around each year, many of us fail to plan appropriately to make it through December without going into debt.
Did you know that the average consumer that use credit cards during the holiday season, ends up paying 15% more for their gifts? With a little patience and commitment, you can purchase the gifts on your list without breaking out the plastic. If you are committed to a debt-free holiday, layaway can be a great option.
Here are some great tips from SmartAboutMoney.org:
For shoppers without savings or credit, layaway can be a good option. But before you proceed, first ask: How much will I need for a down payment? What is the payment schedule? How much will each payment be? Are there any additional fees? What happens if I miss a payment? If, at any point, I change my mind about the purchase, can I get a refund?
Layaway is good for buying something you’ll need in the near future—say a few weeks from now. It is not intended as a long-term payment plan. For example, if you buy $200 worth of presents for your children, make sure you can commit to paying off at least $40 each week.
Make a shopping list before you go to the store and be realistic in what you can afford to pay in full during the allotted time you have.
If you go to the store to make payments, get in and out. Don’t browse and shop for more items. Impulse items can wreck your budget.
Keep accurate and detailed records of your layaway contract, your purchases, and all payments that you make.
Make sure you understand the store’s sale policy regarding layaway items. If you put something on layaway that subsequently goes on sale, you may be able to renegotiate to get it at that sale price, but only if this is a part of your contract.
Check back each week for more tips on decreasing spending to increase cheer this year.
More Tips: Additional tips from Women’s Institute for Financial Education on saving money and time through the holidays
Shopping Tips: A FTC article on smart shopping tips
Using Layaway: A FTC article on doing your research before agreeing to a layaway plan
For more information, please visit the Consumer section of www.montanalawhelp.org/. Or, call the Montana Legal Services Association Helpline at 1-800-666-6899.
This Consumer Tip and MontanaLawHelp.org is a joint project of Montana's Credit Unions and Montana Legal Services Association. MontanaLawHelp.org has information about consumer issues, housing, money management, and more.