While these days lay-by is not as popular as it used to be in the past, it’s still a smart way of being financially responsible and sticking to your budget while making large purchases. Consumers these days are increasingly becoming more credit-responsible and lay-by can take the sting out of costly credit card repayments.
According to recent studies conducted by Roy Morgan Research, in the last financial year almost 10 percent of Australian consumers made a purchase using lay-by. This figure is more than double the number of people who used an “interest free” deal in the same period.
Just about all of the large department stores such as Myer, David Jones and Target, as well as many smaller retailers provide shoppers with lay-by services. But, it’s important that you read the terms and conditions of the lay-by policy, to ensure that you understand that there may be cancellation or other service fees included.
By being aware of the terms and conditions, lay-by can be a fantastic way of shopping and following your family budget. Annual events such as Christmas and birthdays can put a strain on household budgets and lay-by can help you to distribute the costs over a longer period of time.
Lay-by can also help you to take advantage of making big-ticket item purchases when specials or discounts are available and also enable you to avoid last-minute expensive purchases.
One of the best aspects of lay-by is that it allows you to spread out your payments over several weeks, or even months, rather than needing to make one large upfront payment. This can be helpful as it’s often easier to budget for smaller purchases, more so than for larger ones.
When you make a purchase with lay-by rather than using a credit card, you are also avoiding what can often result in expensive credit card interest repayments. With lay-by you never have to worry about paying interest or interest free periods, so long as your weekly lay-by payment cycle is followed.
Lay-by is a great way to ensure that you stick to your budget and don’t spend more than you need to. But, before you go ahead and make that lay-by purchase, make sure the item is really what you want to buy. If you end up changing your mind after signing the contract, lay-by can quickly become expensive.
Most lay-by transactions require an upfront deposit and if you cancel the purchase after signing the contract, you might find that the deposit is not refundable.
Lay-by is a cost effective way of saving you money and sticking to your budget, while ensuring that you don’t overspend on a credit card. Lay-by also allows you to avoid ending up in a situation, where you are worse off than when you first started.
