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Old-fashioned thrift not fully out of fashion Ron Bartizek Business LOCAL

Sunday November 15, 2009 | 12:00 AM

Taking on debt you can’t pay or pocketing bribes for steering contracts aren’t the only ways to fatten your wallet in preparation for holiday shopping. Believe it or not, some people spend only what they earn and, fortunately, there still are local institutions offering plans that help them live within their means.

Holiday Club accounts don’t do much for Luzerne Bank’s profits, but the seven branches still offer them and about 1,800 customers have deposited $1.6 million this year. That works out to nearly $900 per account, which is $200 more than the average amount the National Retail Federation expects people to spend this holiday season.

“We’ve been fairly steady” the past few years, said bank President Robert Snyder.

Hmm … that means wild gyrations in stock and bond markets didn’t sway these consistent savers, or the 425 who took out Vacation Club accounts or the 255 building up cash in Tax Club accounts.

Another prudent group has been preparing for a merry if modest Christmas by putting gifts and decorations on layaway at Boscov’s department store. The regional chain lets people reserve an item with only a 10 percent down payment. Apparel must be paid off and picked up within 30 days but buyers of toys, decorations and gifts have twice as long.

Not surprisingly, the recession has given a boost to the program.

“It’s generally increased in all of our stores,” said Bonnie Katzaman, the company’s manager of policy and procedures.

And even though Boscov’s must wait to be paid – just as purchasers don’t get the instant gratification of credit-card buyers – the store will heavily promote layaway in its holiday advertising. That’s because most competitors long ago did away with the service, giving the 39-store chain an advantage in thrift-oriented markets like Wilkes-Barre.

It’s not just trinkets that can be put away, said Gary Boyer, Boscov’s director of stores. While candy and high-priced furniture don’t qualify, televisions and appliances do.

Washington policymakers must hate these folks. They’re not following the playbook laid out at the behest of stock traders and investment bankers who have become permanently intoxicated on credit. “We need to get back to partying like it’s 2007,” they seem to be saying. “Lend, lend, lend,” they tell bankers. “Spend, spend, spend” is the message for the rest of us.

Craig Selner, director of counseling at Community Credit Counseling Service of Northeastern Pennsylvania, sees lots of people who have followed that script. Even some who made good money end up on the other side of his desk, because they spent every dime they made and more until illness, a layoff or another unexpected setback stopped them in their tracks.

From Selner’s perch, more stringent borrowing qualifications aren’t bad. “You would hope … it would decrease delinquency,” he said, because people wouldn’t have the opportunity to get deeply in debt.

Even Snyder, who says Luzerne Bank has been “lending it out like crazy” – to qualified borrowers, of course – agrees that “we can’t keep living off of credit.

“If consumers saved more and paid for more things in cash … (it) has got to be good for the economy.”

As for those club accounts, even though they require lots of labor to administer, “We wouldn’t dream of stopping (them),” he said.

About the Author

Ron Bartizek covers business for the Times Leader. Reach him at (570) 970-7157 or rbartizek@timesleader.com.

Ron Bartizek has more than 30 years' newspaper industry experience, in advertising, news, general management and ownership. He has been business editor of the Times Leader since mid-2005.