October 18, 2012
by Allyson Dennen, MC, AFC

 Have you begun to think about holiday spending yet?  Whether you have or not, the retailers definitely are!  They are strategizing how to gain your money, and as much of it as possible.  If you noticed an aisle or two of holiday items appearing even before the Halloween candy had been stocked, then you’ll realize retailers are already attempting to lengthen the holiday season this year.  Several stores, including the Exchange, have rolled out special Layaway Plans for the holidays.  While layaway can be a great addition to your holiday spending plan, you will have to make sure you understand the details before you commit to it.

Some retailers are offering layaway with no upfront fees, while others will refund the upfront fee, but only in the form of a gift card, after you pay in full.  Some are even advertising no cancellation fees.   If your desire is to be control your holiday spending and keep from increasing credit card debt, these layaway deals may be tempting.  There are several things to consider, however, when deciding if this is a good way to purchase gifts:

·    Read the fine print carefully.  There are often initial fees, cancellation fees, and restocking fees if you fail to pay or choose to cancel. 
·    If you choose to cancel will you receive a refund in the form of a gift card or get your cash back? 
·    Can the payments fit in your budget with payoff in the time allowed?
·    If the item goes on sale during the layaway period will you get the savings?
·    Will you be tempted to buy more items every time you go to the store to pay?

Set a Goal: You can set aside money yourself, in a similar way to layaway without the commitment and fees.  This may also help you save money by waiting to purchase during the pre-holiday sales.  Start early and create a list of gifts you wish to buy, carefully considering what is an affordable budget.  Do price checks to add up what you may need to pay for each item. 
Make a Plan: Count how many paychecks you will receive prior to the holidays.  Divide your holiday budget by the number of paychecks.
Save Automatically: Set up an automatic transfer from your checking to savings for that amount.  Keep your list handy and watch sale prices as your savings begin to build.  When you have the money saved and see a good deal for an item on your list, purchase it.  Be careful to remain true to your list; don’t be caught up in holiday deals for other items.  If you have any savings left after purchasing your gift list, leave it in a savings account or invest it.

For more information:
Federal Trade Commission
Saving for the Holiday Season – No Time Like the Present!
Saving on a Tight Budget