Making Your Money Work For You

Aug 30, 11 Making Your Money Work For You
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Since the Great Recession began, American households have been saving more of their income.  The recession, and its effects: unemployment, stagnant incomes, eroded consumer confidence, have shifted the way many people view their money.  Once the recovery began, people regained some confidence in the banking sector and many were looking for a safe place to put their money.  Rather than gamble in a volatile stock market, millions of families instead chose to put their money in that staple of the American economy: a savings account.  Unfortunately, with a stark decrease in spending, the drive to save more money has made the recovery harder and longer than usual.  However, it has greatly bolstered the bottom lines of millions of households that were in debt.

Unfortunately, low interest has had some negative effects on the economy.  With historically low interest rates, individuals who rely on interest income, such as retirees, have seen their yield drop dramatically.  Pension funds have also been hurt by a Federal Reserve policy that was put into place to help mitigate some of the economic damage of the recession and prime the pump of recovery.  Despite this, overall household debt, which includes credit cards, mortgages, student loans and car loans, has declined precipitously since late 2008.  Americans have paid off over $1 trillion in debt.  Making your money work for you means that you become savvy about your saving practices.

The Federal Reserve website provides a fantastic resource for those seeking information on monetary policy.  It provides useful information, such as the daily interest rate.  Individuals concerned about money management closely follow many of the fed indexes so that they will be able to make the most informed decisions regarding their money.

There are a few places where people can obtain reasonable money market rates.  By placing your money in a safe, steady yielding savings account, you can watch your debt shrink while your money grows.  The recession decimated the wealth of the American people and put a strain on many American families that were already struggling.  Those who learned how to make smart monetary decisions and exercise patience will be ones to see a steady increase in their finances despite Federal Reserve monetary policy.

Interest must increase at some point in the future.  This will have negative consequences for many individuals and families as payments on everything from mortgages to student loans will increase.  However, those who have built up a solid savings account will only continue to prosper from smart money management.  Frugality is still in fashion.

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