Luxury layaway?

How do you feel about this?

I remember as a child my mother would occasionally use layaway at K-mart to lock in out-of-season prices on things like winter coats and school supplies without actually buying them right then. Either she didn't do it often or stopped when I was pretty young, because I only remember her doing it before I turned 10 or so.

I actually worked part-time at that very K-mart this spring. I was shocked to find out that people still use the layaway service. Having lived most of my life (from about 12 years to present) in a solidly middle-class family, It hadn't occurred to me that a fair number of people shopping at these discount stores would need layaway because they couldn't qualify for credit cards.

I suppose avoiding debt is admirable, but to my rational mind it looks like financing the item and receiving the item after paying instead of before.

Layaway is interest-free, but some places will charge you a flat fee for using the service. It does not trigger a report to the credit bureaus, so it can't affect your credit score. Then again, you can't build credit with it.

Most importantly, if you can't make all of the payments, you get your money back minus a restocking fee.

The financially prudent way to proceed is to save the cash in an interest-bearing account until you can afford the purchase. The flip side is that you may find a sale or special price that will not be available later. My personal opinion is that if it's something you can't pay for now and don't need immediately, you probably don't need it at all (though I will grant a few exceptions, like a reasonably-priced engagement ring).