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Economics Tops List of Priorities at Camp David 2012 G8 Summit

May 18th, 2012 · Economy

As the U.S. economy putters along, it’s comforting in comparison to what’s going on in Europe. But as we saw just four years ago, the economic meltdown in the U.S. led to a global crisis that we are still trying to recover from. In other words, we are in no way immune to what’s happening in Europe. On the contrary, we could very well see a global crisis erupt from the economic crises playing out in Britain and Greece, in particular. That’s why economics tops the list of priorities at the G8 Summit at Camp David this weekend – May 18-19, 2012 – when President Obama will host leaders from Germany, France, Britain, Japan, Russia, Italy and Canada.

Britain is in a recession and Greece may default on its commitments made via a plan to bail the country out of economic crisis. However, U.S. Treasury Secretary Timothy Geithner seems encouraged by what he’s hearing in the build-up to the Summit:

“You are seeing them talk about a better balance between growth and austerity, meaning a somewhat more gradual, softer path toward restoring fiscal sustainability.

CBS Money Watch goes on to report that:

“The shift shows that European leaders recognize that countries can’t increase their economic growth if they’re forced to focus solely on cutting spending and reducing debts. Geithner said European countries would benefit from investment in public works projects, like roads and schools.

As for Greece in particular, world leaders face a challenge indeed:

“Investors have been shaken by the power vacuum in debt-stricken Greece. They fear the consequences if Greece refuses to impose deep spending cuts agreed to under a bailout deal. They worry that the bailout could collapse, toppling Greece’s economic and banking system and forcing the nation from the eurozone.

“Should that happen, larger governments in Spain or Italy that are struggling to ease their debt loads might soon fail. The eurozone itself could splinter. The result could be a global crisis to rival the one that followed the 2008 collapse of the investment bank Lehman Brothers.”

For news more specific to the U.S. economy, see What We Can Take From Fed Reserve April Meeting.

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What We Can Take From Fed Reserve April Meeting

May 17th, 2012 · Economy

As realizing the promise of economic recovery continues to elude us, the Federal Reserve is taking note. During last month’s meeting, board members discussed a number of possibilities – of what to expect of the economy and, perhaps even more importantly, what to do about it. The top take-away’s from the meeting are as follows.

Members of the Federal Reserve:

  • Characterize the current economic recovery as “moderate” with “improving labor conditions.”
  • Are concerned about the impact on the economy if politicians do not manage to avert the spending cuts and tax hikes scheduled for January. They’re also concerned that budgetary questions could discourage household and business spending.
  • In light of the pace of economic recovery, they want to keep rates low in the near future, with not another federal rate hike until July 2014.
  • Are prepared to do more to help boost the economy if and when the recovery takes a tumble.

Of course, all of this is just information that can leave you and me feeling pretty helpless to do anything about it. The key is to take matters in your own hands when and where you can.

As I blogged in April, “Rather than adopting a “wait-and-see” attitude about the economy, opt for a more proactive approach, doing everything you can to maximize your financial health:

1) Track your spending. Where is it going every month, week, day?

2) Make a list of your necessary expenses and those you could cut back on, or eliminate altogther.

3) Set goals for what you want to accomplish, financially, in the next three months, six months, year, and even 5 years down the road.

4) Kick up the savings a little. At a time of economic uncertainty, if you can afford to stash a little (or alot) more away, by all means do it.

5) Give yourself a refresher course in financial health. You’ll find a wealth of info in our Budgeting and Saving Articles.

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Is Outlet Shopping Really Worth It?

May 16th, 2012 · Budgeting

My budget-conscious family has always sworn by outlet malls, but almost every time I’ve bought something there, I’ve been dissatisfied by the experience. And it’s not because I’m some retail snob. Though I do like my name brands, I can always find them second-hand. That always feels good because I only buy gently-used items at a fraction of the retail cost. On the other hand, outlet shopping tends to leave me a little cold because, although they’re name brands, I find a lot of irregularities in the quality. Plus, the discounts just don’t seem all that deep to me.

Well, as it turns out it’s not just me.

As reported by Kiplinger, Cheapism.com conducted a study with similar results. Though outlet store shopping can be a smart way to save money on name brands, it’s only worth it if you know the facts and make informed purchases accordingly.

According to the study:

Outlet stores aren’t all that cheap. Considering that name brands are already relatively expensive, the cost of items is expensive relative to the same type of clothing item you could find on sale in a department store.

Quality can be inconsistent. Not only do manufacturers send their irregular pieces to discount stores, but they often make items specifically for the outlets. These outlet-bound items make sense to the manufacturers because they can cut corners on materials in ways they can’t when making the official name brand items that first appear in department stores.

Overall, though, the study says you can expect to save as much as 30 percent at outlet malls, or even more if you join their mailing lists, which frequently provide you with coupons for special discounts. And before you buy, note the return policy first. Make sure you can bring it back, and what they need in order to do so, in case you get home and notice an irregular stitch you don’t want to live with. To avoid this dilemma, look over your items carefully and, if you can, know first what is available in the regular department stores so that your comparison shopping is informed, both quality- and cost-wise.

What about you? Do you shop at outlet malls? Why or why not?

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