Ahhh the Holiday Season. It’s gearing up already, if you couldn’t tell. I’m sure you’ve started to see Christmas commercials, and maybe have even been exposed to some Christmas music in retail stores already. I haven’t had to endure that YET, but I’m sure it’s right around the corner. The first Chirstmas commercial I saw on tv this year was for Overstock.com, how about you?! I could hardly believe it when I saw it, but then this past Thursday or so, I saw that the shopping centers down the street I live on have all started to put up their giant Christmas ornaments in their grassy spaces, etc. At the risk of sounding like a scrooge, it’s just too early for me!
I really like the Holidays. Well, at least part of me does. I like the feeling in the air of comradery and joy. I like that (even though we have to have a specific time of year to do it) people tend to have smiles on their faces, and they are thinking of others more than of themselves. Well… MOST of they time they are. Of course, there are always those unplesant moments in a checkout line when some uppity woman snaps at an overworked clerk… that always stinks. Just in case you are one of the few and fortunate that have never worked in retial, the Holiday Season is the closest you can get to hell. It’s never nice when people don’t realize how hard you’re working and holler at you because you aren’t going “fast enough”. Actually, I think that my former life in retail was what first started souring me on the Holidays. I DO love them, like I mentioned above, but there’s no torment quite like having to listen to Christmas music for 8-10 hours per day for about 50 days in a row. And NOTHING can wreck your holiday spirit like someone tweeking out at you because the store you work at ran out of something, or whatever.
Anyway… with the Holidays upon us, many people this year are trying to figure out how to make it work. It’s no secret that the economy has stunk lately, and also no secret that many will struggle to make the holidays what they expect their family expects. Some families expect that the Holidays are big and over the top. Everyone wants a gift, and there’s no way to avoid spending hundreds. There is a part of my family like that, and it’s difficult to handle. It’s really hard to please EVERYONE, especially with minimal funds!
One solution to this problem is “Layaway”. I have a feeling that more and more retail stores will begin offering layaway again this season and next. It went out of style for a while, but I assume it will be back with the flailing economy. Layaway makes it less painful to buy larger items on your Christmas list by spreading out the payments into smaller chunks. Makes sense, right? mehhhhhhhh… Here’s why I think layaway is a lousy idea:
First of all, an item that cost $100 will cost you something more like $120 if you use layaway. You ARE charged for not paying in full all at once! Just like interest on a credit card, same thing. Personally, I HATE paying more money because of HOW I buy something. If an item is valued at $100, I don’t want to pay an extra $20 for ANY reason! This is a type of convenience charge, and it’s completely avoidable.
Secondly, Layaway takes money out of YOUR pocket and puts it into someone elses. You’re saying “OF COURSE it does, that’s how you BUY something”. Well, lets look at layaway from a different angle. What really happens with layaway is that a “store account” is created in your name. It doesn’t really exist, mind you, but your name is put on the books. That store account “holds” your money as you pay toward a large item. Once all the money is there, the item is actually sold to you and you get to take it home. Sound a little familliar? It should. Another name for this STYLE of account is a “savings account”. There is a difference though. With a savings account, you are earning interest for YOURSELF. When you give your money in little pieces to a retail store, your money grows interest FOR THE COMPANY, not for you. In fact, most of the time when you are putting money into something for use later (like insurance, for instance), companies are not putting that money into low intrest savings accounts. and they certainly are not going into an account with YOUR name on it! They are investing your money in the market under THEIR name. There are TONS of different ways to do that, but that’s how they make money. You fund their investments, and you have NO say in what your money is invested toward, because even though you haven’t really BOUGHT anything yet, they still consider that THEIR money.
A better way to combat large purchases is to do this same thing FOR YOUR SELF. Start a money market account or a mututal fund account with a reputable investment specialist! It takes just about as long as starting a bank account, but your reap much greater benefits! When you have this type of account, as your interest acrews, it is re-invested. Your money will grow MUCH faster in this type of account than it will in any regular savings account right now. If you pay into it every pay period the same way that you would pay toward a layaway item, you’ll have yourself a pretty decent account in short order. The POINT though, is that your money will be working FOR YOU, not for Kmart. YOU will pick your investments with some trusted help. YOU keep YOUR money.
WHY LINE SOMEONE ELSES POCKET WHEN YOU CAN LINE YOUR OWN?!
So for this reason, I am reccomending that you stay away from layaway. Don’t make a company rich. Do the same exact same thing and save the money you need for Christmas while you make money for YOURSELF!! It’s so easy, but it doesn’t occur to most people! Now you’ve got your brain in gear, call up your bank and make a meeting with an investment specialist! There’s NO time like the present!!! 
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