The return of layaway

Layaway is a concept that a lot of younger people are not familiar with. When credit cards became popular, layaway programs started to disappear until they had become extinct. I am pleased to see these programs have returned.

Instead of using a credit card to pay for a purchase after making it, layaway allows you to select the items you wish to buy, pay for them over time and then take possession when you have finished paying for them. The first store I noticed that had brought back layaway was Bob’s Discount Furniture, which is a large chain in New England and surrounding states. Then I noticed larger stores like Wal-Mart and KMart reintroduced layaway programs. Tonight, I noticed that smaller chains, like GameStop, are giving people the option.

I commend these stores for allowing people this option. It’s a way for people who aren’t great at saving to purchase items without resorting to credit. While I would prefer to use a Christmas club account to pay for these purchases, layaway is something I am glad to see again.

Starting a small business

A friend of mine asked me a question relating to starting a small side business via Facebook last week. I thought that this might be a good weekly series. Many people have small side businesses or have thought about starting a small business, but just aren’t sure where to start or how to maintain their records. Over the next few weeks, I’ll be addressing some of the things to think about when starting and running a small business. If you have questions regarding small businesses, feel free to ask them in this post or send me an email.

My first rule in small business is start it with cash. If you can not start a business without going into debt, this might not be the right direction for you to go into. 80% of small businesses fail. That doesn’t mean that your small business will fail, but I don’t want you getting into debt over it. Do your research, see how much start up money you need and start saving. You may not be able to go all out when you start your business, but starting slow and growing with cash will leave you in a much better financial situation.

My friend had asked me about getting a credit card to start her business because the representative she was working with said she could get miles or points for her purchases. Plus, it would help her keep all of her expenses seperate. You can do all this without paying any annual fees or interest charges. Open a free small business checking account. I work with Webster Bank in Connecticut. I get free checking, plus my debit card earns rewards points. Just open a checking account in the business’ name and get a debit card if you need one.

Here is my pet peeve with small business owners. Your business account is only for business transactions. Your personal account is only for personal transactions. Keep them seperate. If you want to take money out of your business because you have profit, write yourself a check and deposit that check into your personal account. If your business is low on cash, write a personal check to the business and deposit the money into your business account. Once you start mingling your funds, it becomes very difficult to keep everything straight for tax purposes. Keep the business stuff in the business account and that’s it.

When you keep your business finances separate, it makes doing business a lot easier, especially when tax time comes around.