Do you remember Christmas Clubs? During the Great Depression bank customers would put money aside each week into a special savings account and get it back at the end of the year for Christmas shopping. Sears has brought back this concept just this year – http://bit.ly/ceRJBG

Back in the 1950’s before the credit card era, layaway or installment plans became popular. It enabled consumers to assure they could purchase that special gift for someone they cared about – or even for themselves.

The 2008-2010 (yes isn’t it almost three years now?) recession has brought back layaway plans as consumer credit has tightened and consumers take pains to manage their finances to a greater degree. Traditionally from the banking sector these plans have common themes – low interest and often many restrictions. Store layaways were a little more flexible although they too offer little or no interest and of course they are far from portable.

I’ve never thought much of layaway or Christmas club plans due to the drawbacks and limitations noted above. They may seem like a good idea but I liken them to getting money back on your taxes which makes you happy until you realize that you’ve given the government a tax-free loan. The best tax return is a net zero as far as I am concerned.

Yet at the same time I a champion for responsible consumer spending and the recent past has shown that Americans in particular liked to spend money they did not have. Layaway plans at least address this concern and with the economy still in need of a shot in the arm of consumer spending, the idea of setting aside funds for the holidays could be a way for this coming holiday season to be just a bit brighter for retailers – and consumers alike.

Each year I go off with a bunch of guys on an annual trip for a few days to Myrtle Beach, SC to play golf and have fun. For the past few years we’ve arranged for our credit cards to be debited a set amount each month over 9 months such that when the always eagerly anticipated trip comes about – it’s already paid for. It’s worked well for all of us and while I am not suggesting I am going to do this for this coming holiday season I do understand the value of taking time to pay something down BEFORE the event. There’s something great about heading to the airport for our annual trip knowing that all is paid for except dinner. Yes there’s a refund policy and cancellation date (pretty close to the event date) so if something were to happen I could get out with all of my ‘investment’ – not true of some layaway plans.

How about you – would you consider a layaway or installment plan for the holidays or anything else?