I’m a Generation Y gal who has always loved to shop. Back when I was in school and university, I didn’t have the same sort of disposable income I’m fortunate enough to have now. That meant my shopping money was made up from my wages from my part time job along with my weekly pocket money. In other words, I didn’t have cash much to play with.
When I found an expensive item I couldn’t live without but also couldn’t afford straight away, I would turn to layby.
With layby I could put a deposit down on a big-ticket item and pay it off in installments when it suited me. When I was finally able to take my goods home after paying off the balance, I not only had a hot new item, I also had the satisfaction of knowing that I had worked hard towards obtaining it. Yes, I had to wait – but the waiting made me motivated to make repayments quickly and kept me disciplined.
How the times have changed.
Nowadays there are new options such as Afterpay and Zip Pay to assist shoppers purchase goods through a credit facility.
When you subscribe to a payment method such as these, you receive your purchase straight away – unlike traditional layby. After you pay an initial deposit, interest free installments are automatically deducted from your debit or credit account for a specified time frame until the balance is paid off.
It sounds very appealing to receive your purchase straight away and not even have to think about the rest of it. But beware … it’s not without its potential risks.
For example, if you miss an Afterpay payment you’ll be charged a late fee of $10 followed by another $7 charge if your installment remains unpaid for more than 7 days. A similar late fee structure applies for Zip Pay. If you’re paying off these charges with a credit card, you could also be adding to this cycle of debt.
What’s frightening about these services is how easy it is to get caught up in the “I want it now” lifestyle. If you’re not careful, you can easily fall into the trap of spending beyond your means. Before you know it you have a couple of hundred dollars coming out of your account for purchases you don’t even remember.
The thing that troubles me most about these modern payment options is that it’s not teaching people that reward comes after the hard work. It’s much too easy to over commit to payment plans you can’t afford, when all you are thinking about is your shiny new thing.
Layby taught me how to save for something special and that’s something today’s generation just won’t get.
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