Misc. Deals, News and Notes

The U.S. Department of the Treasury said it will no longer sell paper savings bonds through financial institutions such as banks and credit unions as of Jan. 1, 2012. The move is part of the Treasury’s goal to increase electronic transactions with citizens and businesses and will save taxpayers about $70 million over the first five years.

Series EE and I savings bonds will still be available for purchase TreasuryDirect, which has offered savings bonds since 2002. “Savings bonds are very much a part of this country’s history and culture, and will remain a part of America’s future - but in electronic form,” said Public Debt Commissioner Van Zeck. “It’s time for us to take a 1935 model and make it a 21st century investment tool.”

It is free to open an account at TreasuryDirect. Services offered through the site include:

• Buy, manage and redeem savings bonds
• Convert paper Series EE and I savings bonds to electronic form
• Purchase savings bonds as gifts
• Enroll in a payroll savings plan for purchasing bonds
• Invest in other Treasury securities, such as notes, bills and TIPs

If you still have paper savings bonds you can continue to redeem them at financial institutions.

Employers added almost no new net jobs last month, and the unemployment rate was little changed at 9.2 percent, up slightly from 9.1 percent. The latest report from the Labor Department was disappointing and has many people concerned about the economic recovery.

The number of long-term unemployed, or those without jobs for at least 27 weeks, was mostly the same at 6.3 million. The long-term unemployed account for 44.4 percent of those who are jobless. The number of people unemployed for less than five weeks rose by 412,000 in June.

For many jobless folks, it is impossible to even think about building a savings and planning for the future. In fact, people who are counted as long-term unemployed are more likely to dip into any savings accounts, or even retirement funds, to pay for basic living expenses.

Some people are able to find part-time employment to help pay bills even if that isn’t their preference. These involuntary part-time workers, who numbered 8.6 million in June, either had their hours cut or were unable to find a full-time job. There also were 2.7 million people marginally attached to the labor force. They wanted and were available for work and had job hunted sometime in the previous 12 months, but were not counted as unemployed because they hadn’t looked for work in the four weeks preceding the survey.

Some banks are using customers’ shopping habits to generate a new revenue stream. According to CNN, some retailers are using data supplied by banks to send out targeted offers to potential customers. The messages may come via emails, texts or in bank statements. Should you be worried?

According to CNN, “The banks don’t actually hand over your data to retailers. Instead, retailers describe what type of customer they’d like to target and the bank then sends the deal to customers who fit the profile. When the customer cashes in on the deal, the bank gets paid a commission.”

If you are uncomfortable with your data being used in this way, you have the right to opt out. But more banks are using this approach to generate funds, since they get a cut of successful transactions. In fact, such deals are expected to bring in about $1.7 billion to banks by 2015, forecasts research firm Aite Group.

But you may also view these types of programs as incentives for doing business with certain banks. Many people look for credit card offers with rewards programs, and these type of targeted discounts may become more popular with consumers looking for shopping deals.

The Federal Reserve said the U.S. economy is growing slower than expected, although the economic recovery is continuing at a moderate pace. The economy is expected to grow 2.7 percent to 2.9 percent this year. It also projecting unemployment to be about 8.6 percent to 8.9 percent by the end of the year.

The Fed said in a statement:

Recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan.

As a result of the economic outlook, the Fed decided to keep the target range for the federal funds rate a 0 to 1/4 percent. The federal funds rate is the interest rate at which institutions such as banks and credit unions lend balances to each other overnight.

Building an emergency savings is difficult for many people. But if you have a regular income and are willing to take the time to go through your monthly expenses, it’s pretty likely you’ll find ways to contribute to a savings account. Take the following steps to jumpstart your savings plan.

1. Work up a budget–yes, the dreaded “b” word. Look for ways to cut back on spending in different categories, such as entertainment, dining out or hobbies. Just because you cut back now to doesn’t mean you’ll always have to go without.
2. Sell your stuff. As the saying goes, one man’s junk is another man’s treasure. Clear out the clutter and hold a yard sale or place an ad in the local newspaper and on Craigslist. Whatever you make off selling items should go directly into savings account.
3. Put contributions on autopilot. Have a portion of each paycheck automatically deposited into a money market or savings account. It will be be an adjustment at first but over time you won’t even miss the money going into the savings.

Remember, you should put aside at least three to six months of living expenses in your emergency fund. But given that we’re dealing with a tough economy you may want to shoot for nine months of expenses.