Technically, the U.S. economy is moving forward. But it's
definitely stuck in low gear.
Bureau of Economic Analysis recently confirmed
that for the first quarter of this year, the economy grew at an
annual rate of just 1.9 percent after inflation. That's a step back
from the 3.0 percent growth rate acheived in the fourth quarter of
last year. The economy is not in a recession, but it is limping
along very weakly.
A weak economy is causing hardships for many Americans now, but
it could hurt even more in the future. A sustatained period of low
salary increases, poor stock market returns and low savings account
rates has made it very difficult to keep retirement savings on
But there are still ways to keep your savings on track if you're
determined enough. A slow economy means that you simply have to
make more of an effort at saving money.
Here are five savings strategies for today's sluggish
1. Research first, shop second
Never spend more than $50 on an item without doing a little
research first. You'll shop more efficiently and make better
decisions if you do some Internet research before leaving the
house. Your research should have three objectives: determine the
right type of product for your needs, figure out which brands and
models have good functionality and reliability, and find out who
has the best price for that product.
2. Use the right bargaining strategy
For more expensive items -- say, anything over $100 -- you should
try to bargain for price. But to succeed, you'll need the right
strategy for the place you're shopping. When purchasing services or
buying from a small, independent store, start by asking if they'll
sell the item for 20 percent below list. When dealing with a large
chain store, the people on the floor probably don't have that kind
of latitude, so take the approach of asking about any specials,
coupons or upcoming sales that might help you get your item more
3. Build a case for your next pay raise
In a tight economy with high unemployment, employers tend to give
raises somewhat grudgingly. Throughout the year, you should
document ways that you add value to the company by cutting costs or
adding to revenue. Where possible, use quantifiable facts rather
than just broad, qualitative statements. Gather this evidence at
review time so you can demonstrate why it is worth the company's
while to give you a higher raise.
4. And then bank that raise
When you do get that pay raise, devote as much as possible toward
your savings rather than automatically raising your living expenses
to match your income. The only way Americans are going to
catch up on funding their retirements
is by increasing their savings rates, and doing so in the wake of a
pay raise is one of the least painful ways to achieve this.
5. Don't get cheated on bank rates
Did you give up on bank rates when savings account rates dropped
below 1 percent? If so, you may be
settling for much less than you have coming to
. All rates may be low, but why accept 0.10 percent when rates
close to 1 percent are still available? That's about 10 times more
While these strategies are geared toward picking up the slack in
a slow economy, if you acquire these habits now, they will help you
get even farther ahead when the economy finally strengthens.