We are officially in the land of reading between the lines to only find good news.  The number of newly laid-off workers dropped unexpectedly last week, but the number of people continuing to get their unemployment money rose to nearly 6.3 million, setting a record high for the 13th straight week.

631,000 people filed for unemployment last week... down from the prior week's 645,000.  But this is only a 14,000 job difference.  One company can make up that difference in one day.  GM is set to layoff another 21,000 workers for example.

Furthermore, the current number of people receiving unimployment jumped to 6.27 million, the highest on records since 1967 and steeper than economists expected.  Yet the stock market is still up because we somehow found good news here?

I would say the only good news is that the savings rate is holding steady, even slightly increasing.  The personal savings rate rose to 4.2 percent from 4 percent in February. It was at 4.4 percent back in January... that's the first time in more than ten years the rate has been above 4 percent for three straight months.

But economists look at the higher savings rate as a worrisome sign.  That's a very short term way to look at things.  There is no quick fix to the problem and Americans need to start saving, reduce their debt, and feel like their house won't lose more value before we are truly on the road to recovery. 

Households have been cutting back on spending and boosting savings during the recession, worried that they need to replenish depleted nest eggs as job cuts mount and investment values plunge.

Consumer spending accounts for 70 percent of total economic activity... so it's understandable that it's so closely watched, but the savings rate increasing is a good thing for the long term.  Maybe things will get worse before they get better and the road to recovery will take longer, but at least we'll be fundamentally and financially sound if we continue to save... otherwise we'll be dealing with another "economic crisis" in 5 to 10 years.

Read more here.

How many of you actually write down your expenses?  Do you know the balance of your checking, savings, credit card, and investment accounts?  If you're like the other 127% of the population you probably don't.  It's time for you to get yourself organized and actually find out the monthly costs of your daily lunch outings, booze, gas, entertainment, hair products, tanning sessions, and whatever else you do that is totally unecessary...except for booze.  Anyway, my point is if you haven't done it yet... start writing down everything that you spend and keep track of it for a month.  Create a necessities category with things like food, gas, rent, bills and then a pleasureable category that includes entertainment, golf, movies, bar receipts that you don't remember and other things of that nature.  If a number 2 pencil and wide ruled paper are too old school for you then check out mint.com where you can securely enter in all of your account info and check it all out on one simple page.  Seriously it's safe; if you're going to get your identity stolen it will be from someone stealing your credit card offers via snail mail or copying the magnetic strip on your debit card a the Lonestar Bar in Austin, TX.  "It's the best free way to manage your money."  You can quickly find out how much you're spending each month and what you're spending that cash on. 

Start appreciating the value of money.  If you make $10 bucks an hour think about the fact that you worked a half hour just to rent a movie or worked 2 hours to take a date to the movies.  Getting ColdStone afterwards bumps it up to 3 hours.  And that's before taxes.  Put things in perspective.  I'm not saying don't go have fun, just think about it and make sure the amount of money you have coming in every month is greater than the amount you're spending.  If this doesn't work then I advise you go on an all cash system.  Give yourself a predetermined amount of money each week in cash and when it's gone that means it's time to stay home and sit in time-out... or read this website.  Quit using that credit card.  Again, spend less money than you make, it's not rocket science... or even science...it's common sense.  It's the foundation to living a financially responsible life, yet Americans somehow manage to have a negative savings rate year after year.   Hear of the credit crisis?  Spend less than you make and you'll always have money.  Savvy that?

If you would just stop for a second and quit spending money on a few unnecessary items a month I’m sure you can figure out a way to save $200 a month.  I don’t care if you make $10 bucks an hour or $100 bucks an hour.  Start paying yourself first and put some money away every month and you’ll soon realize the magic of compound interest.  Check this out.

If you start putting away $200 bucks a month right now with a 6 percent yield you’ll end up having $32,775.87 in 10 years.  That may seem like a long time, but trust me… once you’re working in the real world 2019 will be here in no time.  

If the stock market does a little better over the next 10 years and you end up with an 8 percent yield you’ll have $36,589.21.  This is after contributing $24,000.00 (which seems like a lot, but it’s only $200 a month).

(10 years later) Now let’s say you stop contributing to the fund and just let that 32k (from the 6% interest scenario above) compound at 6 percent interest for another 10 years... you’ll have $59,632.31.  It almost doubles by just letting the interest work for you.  If you can get an 8 percent yield you’re looking at $72,750.64.

Let’s look a little further out… if you simply put away $200 bucks a month for 20 years at 6 percent interest you’ll have $92,408.18 in 2029.  Seem far out?  It’s not; the only thing far out is your bank account.  Same time frame of 20 years at 8 percent yield and you’re looking at $117,804.08.

Once again, let’s say you save for 10 years and have that $32,775.87 saved up (and 6 percent yield is a very conservative figure)… you stop putting in $200 a month, let it sit for 20 years at 6 percent interest and that 32k will be a healthy $108,494.83.  Bump that up to 8 percent interest over the 20 years and you’ve got $161,480.25.  That 2 percent difference year over year for 20 years ends up being more than $50,000.00!

Finally, imagine you’re able to put away that $200 per month for 30 years in a row.  At 6 percent interest you’ll be staring at $200,903.01 in your bank account.  Don’t tell me that you’re not a little excited.  If you can get an 8 percent annual return then watch out…$298,071.89!  You should now realize the importance of compound interest and how your money can work for you.  Look at the difference between a 6 and 8 percent yield… almost $100,000.00 by the time you’re ready to call it quits.  Think of all the golf courses you could check out with all that extra cash.  

Okay, now take a guess at how much you’ll be making in interest alone if you collect 6 percent on the $298,071.89for only one year… that's $18,384.42 in your pocket… 8 percent yield and it jumps up to $24,739.82.  These returns are very realistic for the savvy investor.  Do your homework and you can end up with an extra six figures in your bank account by the time you retire.  Compound interest is magical.  Be sure to check out The Richest Man in Babylon by George S. Clason for a beginner’s lesson on the power of compound interest.

Remember, pay yourself first.  Start a savings account that automatically takes money out of your account before you even see it or find out if your employer has an automatic savings program.  If you never see the money you’ll never even realize you don’t have it.