Back in the day (20+ years ago) I worked at Sears while attending college and their layaway program was popular. Last night, I received an email from Sears announcing layaway is back. Today, a teammate sent me this link on layaway from MSN Money. Was thinking how layaway can promote thrift. Also thought that credit unions could help members with their layaway plans. I think we should allow members to designate their own layaway at the credit union by setting up a savings account, declare how much they need to save and what they are saving for, place a hold on the account until the goal is reached, pay a dividend on the account, and then pay it out to the member when they reach the goal. Instead of the retailer getting “free money” until the merchandise is paid for, allow the member to save while earning a dividend. This is essentially what the CU Warrior is trying to do with his “What are you saving for” campaign. Something to think about.
Jim Jerving on November 14th, 2008 at 04:24 PM
Doug, it’s a great idea. I think if we go back to the past, we are going back to future. There are a lot of good ideas we could reclaim from the past and retool for today. Is there nothing new under the sun? Maybe not. The more we get back to paying for what we can afford, the better. Good talking to you today.
Credit Union Warrior on November 15th, 2008 at 09:56 PM
There’s a lot of merit to that idea…and really something that credit unions could build a collective identity with.
Michael Hostetler on November 17th, 2008 at 09:38 AM
Doug – There are a lot of similarities here with what we are trying to accomplish with FYI Savings.
Doug on November 17th, 2008 at 09:45 AM
Right on Michael. I am looking forward to a first quarter launch of FYI Savings here at FORUM. If anyone is interested please check out www.ignitecu.org and http://fyisavings.wordpress.com for details.
Ron Shevlin on November 17th, 2008 at 04:14 PM
I must be missing something here.
How is a “layaway” plan any different from the “get now, pay later” “run-up-the-debt” mentality that has gotten us into the problem we’re in today?
Maybe I’m the only one who equates thrift with NOT spending.
Doug on November 17th, 2008 at 04:24 PM
I am with you on equating thrift with not spending. You do have to make some minor purchases (i.e. appliances) from time to time and I think it would be prudent for more people to save money in advance to make these purchases instead of paying for them through credit, especially potentially expensive credit cards. Layaway instead of credit can help some people in this area as you don’t get the merchandise until you have paid for the entire purchase. Isn’t layaway more like “get later, after you pay for it”? At least there is no debt associated with layaway. I personally wouldn’t use it, but that doesn’t mean there is not a place for it.
Ron Shevlin on November 17th, 2008 at 04:52 PM
Yep, you’re right. Sorry for the confusion.
Josie on November 24th, 2008 at 10:47 AM
Credit Unions already support this kind of thrift; it’s called a Christmas Club. Members decide how much they want to save and the credit union distributes it around October 31. Some credit unions offer Vacation Clubs using the same principle.
Doug on November 24th, 2008 at 10:55 AM
Excellent point Josie and I overlooked this. Don’t you think we could use the Christmas Club or Santa Savings platform and make it a bit more conversational with the members in showing them how they are progressing towards their savings goal? We have loyal Santa Savings members here at FORUM, but I am not sure we are doing the account justice by making it even more attractive to the overall membership.