Have you ever seen the Chris Rock bit on layaway? It’s hysterical! I wish I could find it on YouTube but I can’t.

Layaway was really popular when I was growing up, for both Christmas and Back-to-School. Then, as credit cards became more popular, people used it less often and stores used the store space for other stuff. Yeah, that credit card thing worked out well for everyone, didn’t it?

Now that consumers are using credit less often and choosing Smarter Spending options, layaway is back. Right now Kmart is offering 5% off anything you put on Back to School Layaway. I would expect the other big retailers to do similar promos.

Here’s a brief overview of how it works and some tips.

You shop and pick out your items, then take them to the layaway section. You put down a small down payment, and pay it off weekly or biweekly. Usually it’s interest and fee-free, in order to attract your business. So it’s an easy way to pay-off items and make sure that you’ll get what you want, such as desirable items like Wii that used to sell out.

Tips:

1. Make sure you are clear on all the fees, payment schedule and payment options. Including late payments, late pickups and what becomes of your money and merchandise if you are late with payments.

2. Find out your payment options. Do they take online payments? If you have to visit the store to make a payment, is it convenient for you? If you have to go to the store, even if it’s convenient, make sure you have the discipline to not make a purchase every time you go.

3. What happens if the merchandise goes on sale for a lower price, while yours is on layaway? Will they do price adjustments?

4. What happens if you change your mind and do not want the items? (or they don’t fit, etc.)

Even if financially you don’t need to use layaway, it can be a great teaching tool for some kids. If your child wants a bigger ticket item like a bike or video game, and they will eventually have the money for it from either allowance or babysitting or something, consider helping them put it on layaway. It’s a great way to show kids that we don’t get items until they are paid for, or until we have all the money. It’s more interactive and visual than just saving the money at home, and may help to drive home a point.

Another tip, from one of our readers: Layaway is a great way to keep your kids from snooping! If it’s not in your house, they can’t find it.

Have fun & Happy Smart Spending!