Layaway plan is teaching tool

Financial decadence of young called threat to American values

July 22, 2008|By Steve Rosen | Steve Rosen,McClatchy-Tribune

Sometimes, being old school can be cool.

In this case, I'm thinking about an old-fashioned savings tool that could be just the thing to teach children how to deal with growing up in an instant-gratification society.

It's called the layaway plan.

Many of you have probably heard of this out-of-style purchasing concept, which was quite prevalent when I was a kid growing up in the 1960s.

Here's how it worked: Say you wanted to buy a color television, a washer and dryer, a suit or other big-ticket merchandise - but didn't have the money or couldn't use credit. That's when the department store or other retailer would offer to put the item on layaway.

With layaway plans, you'd make an initial deposit and then pay through installments weekly or monthly until you'd paid for the item in full. There would be no or very low additional charges.

My parents used layaway to buy a color television, one of those portable jobs on a rolling stand. I remember the anticipation that built up as my sister and I waited for the big box to arrive.

As I think about it now, I was actually learning something about the virtues of patience and deferred gratification. Knowing that it had taken time to save up for the purchase made it all the more exciting and memorable once the set was plugged in and the color tint controls adjusted.

Like typewriters, the family dinner hour and other good things, layaway plans have largely come to an end.

Today, our consumer culture revolves around a buy-now, pay-later mentality. Instant gratification, fueled by credit cards and the irritating daily drumbeat of marketing lures for the latest and greatest, is the mantra.

Why wait when you can have it all and immediately - whether it's a big car or a big-screen TV?

As for paying, I'll worry about that later. Just open the bank vault and leave a plastic IOU.

All too many youngsters are growing up thinking this is how life's luxuries and necessities are acquired. See the merchandise, like the merchandise, buy the merchandise.

Concern for parents

That should be a concern for all parents.

Indeed, a recent report from the Institute for American Values examined how our financial values have changed over the past 30 years. The study concluded that "the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money."

That's all the more reason for parents to draw upon the layaway approach - saving first, buying later.

How can parents teach and reinforce this lesson with their children?

Start by putting the "wait" back into "want," said Susan Beacham, who runs Money Savvy Generation, a Chicago-based company that develops financial education products.

"One very powerful way to help our children learn the valuable lessons of waiting is to say 'no' to their many requests," Beacham said. "Saying 'no' gives them the opportunity to creatively plan how to accomplish the request on their own. As they plan, they may even change their mind about what they wanted in the first place. Possibly they will discover they really did not want it anyway."

Author John Mooy, whose stories often include lessons about money, believes too many youngsters today are growing up with a sense that they're entitled to everything and that parents should indulge their every whim.

'Work for it'

Mooy, of South Haven, Mich., preaches the gospel that "if you want to buy something, you have to work for it." Set a goal, determine the cost, and come up with a plan to find the money for the purchase. Unfortunately, Mooy said, many children have become "masters at short circuitry."

A father of three, Mooy said one of the most effective ways for parents to reinforce money lessons is to tell stories about their own shopping experiences. For example, he said, "tell them about a time you had to save for something down the road and what you felt and learned from the experience."

If storytelling is not your style, Mooy recommends children practice the "blue jean front pocket" approach.

In one of his recent stories - appropriately called "Anticipation and the Demise of the American Economy and the Disaster Brought About by the Creation of the Credit Card" - Mooy describes the plan this way: "You keep the money you had in the front right-hand pocket of your jeans. When you saw the price of something you might like to buy you reach into your pocket and pull out your money. Then you counted it. If you had enough money to buy the item, great. If you didn't, you could not make a purchase, the money went back into your pocket and you waited until you had the necessary money to make the purchase."

I'm all for that. It's about as old-school as the layaway plan.

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