Long-term, fixed investment in bonds and CDs aren’t something we should consider investing in at this time, as the interest rates in America are going to remain depressed for some time as the Federal Reserve’s decision to keep them low in an attempt to help the economy recover will remain the practice.

That will be reinforced by the inflation numbers, which over the last year have risen by only 2.2 percent, while the Consumer Price Index was up only 0.9 percent, although that of course doesn’t include food or energy. Even so, that’s the lowest increase in 44 years for the CPI.

Add to that the bad economic news from Europe, with their sovereign debt crisis, and China with their own inflation challenges, and the possibility of the U.S. and other economies going backward is a real possibility, which will pressure the Federal Reserve to keep interest rates low, which as far as it relates to safe investing, should keep us in short-term investment vehicles, rather than long term, as eventually interest rates will rise, and we don’t want to get stuck with long-term rates which will under-perform inflation.

It’s not as if that’s not happening now concerning savings, because it is, it’s just that it’ll be much worse in the future if we lock ourselves into low-interest investments, as inflation will inevitably rise, and we’ll lose a lot more buying power if we lock in long.

There’s not much available out there, and we’re talking largely about building a fund to handle any type of difficult circumstance that may come along.

So for now, it’s far better to keep things short-term until we emerge out of the low-interest rate environment. Anything else will cause us to lose our buying power as the value of the U.S. dollar falls and inflation rises.

In response to requests from departments of Treasury and Labor on public comments concerning whether or not guaranteed-income products are able to provide financial security for retirees, Allianz of America performed a study, which among other things, found if a person viewed an age-morphed image of themselves, they saved a lot more money than those that didn’t view the image.

How the research was conducted concerning the image portion of it, was some participants were shown image of their current selves, while other the age-morphed images, which was what generated more savings from them.

What it seems to have triggered was how decisions they make today can affect the type of financial future they will experience, which is seemingly the impetus behind more savings. Continued research is being conducted to see if the age-morphing images can be used in an even more effective way.

According to Shlomo Benartzi, the University of California, Los Angeles, professor who prepared the report, including the behavior of retirees is a crucial element in savings, and not just how economic models are created to determine how they really should respond. He said, “Since the responsibility for managing money is shifting from employers to employees and retirees, the human element is vital to understanding how retirees manage–or mismanage–their savings and critical to designing better solutions and policies.”

Those participating in the research (forex trading demo), said their focus wasn’t on specific investment products, but on the actual behavior of people responding to investing in general.

In other research, an interesting piece of data concerning use of images was the opposite, in this case using photos of children as an incentive to put away more money for them.

Those putting aside money in an envelope with a picture of their children, were found to save much more than those that didn’t.

This research could be something you use to motivate yourself to save more. Even if you picture yourself older or have a photo of someone you’re saving for, it could be a good tool to improve and aid your saving practices.

The one thing about financial or economic news, is it can move up and down from hour to hour, and ultimately confuse a lot of people who don’t understand what’s happening because of the many variables involved coming from so many sources and viewpoints.

With that in mind, don’t get confused when putting away money for savings. For the most part, all that economic or business news has little to do with us at the individual level, and make make us think too much … to the point of rendering us paralyzed financially, or to make decisions based on macro-information which probably will have no effect upon us.

By macro-information, I mean news from around the world which takes into account the larger, global economic picture, and not the local.

Don’t allow all this chaotic news and variety of viewpoints affect the decision you’ve made to set aside a certain amount of money to take care of your needs in case of an unforeseen event which causes you to lose predictable income. Things like getting fired, laid off, injured, etc., which will cause you to lose monthly income.

No matter what happens economically, it’s never, and I do mean never, a bad idea to put away money for unexpected circumstances which can hurt you financially.

Some people give up or tell themselves things like “what does it matter?” or other dis-empowering thoughts, questions or statements, which ultimately create a self-fulfilling prophecy for those who think like that over a period of time, which causes them to stop putting money aside out of fear or feeling it won’t matter.

It does matter, and just remember that all the negative economic news, or even the economic news that sounds positive, is usually referring to circumstances of a country, or region in the world. Most the time it won’t have a direct impact on you, and even when it does, it’s usually in the loss of a job or hours being cut back, i.e. your income stream is either lost or diminished.

Either way, having money set aside is the best way to prepare for it, and no matter what happens around the world, or what economic news is reported, those who are prepared by having savings will be far better off than those who live from paycheck to paycheck with no backup funds.

So regardless of what happens, continue to sock away money for the times that could come where you’ll need to draw on your own money in order to continue living as you’re accustomed to.

Don’t let economic news – one way or the other – determine your savings plan or practices. Make a plan and work the plan, and forget about the big picture which at worst, will only have an indirect effect on your personal finances.

There will always be economic ups and downs which have the potential to disrupt our lives, those best prepared for those times are those who continue to save and build their wealth during those economic swings, largely ignoring the bigger picture and focusing on their own little economic corner of the world.

Sometimes the idea circulates concerning money management that prepaying your bills is a good way to get your credit rating higher.
That’s a myth. And in reality it can take away some extra money you otherwise could earn if you practice prepayment.

The reason it’s not a great idea to prepay bills is it takes away earning power from your money on a monthly basis, or whatever payment structure you’re under.

Keep in mind that savings and building wealth is done over a period of years, and every time you remove an element of potential earnings from the picture, it can multiply many times over throughout your lifetime.

For example, if you prepay your bills every month, the interest that money could earn is taken away from you. Multiply that over the years, and you can see how significant the amount can become.

Of course this doesn’t mean you should allow bills to be late so you incur penalties, as that’s just as bad as the other.

The point is that managing your wealth building involves a variety of steps which practiced over a period of time can generate significant results.

The same is true in the reverse. Losing a little here and a little there from even interest rates takes thousands away over the years, so doing a lot of little things right and with discipline produces the results all of us hope for and want.

So while paying your bills early sounds responsible and right, it is one of those little things that can hurt you over the long term.

Keep your savings money in an interest-bearing account at minimum, and only use it close to when the bills are do.

I do this on a monthly basis, waiting for the 1st of the month to transfer money for bills into my checking account.

The idea that doing it early helps your credit isn’t true; just paying your bills on time is what is needed.

Here is just one little thing you can do and change to add to your money-management strategy to help you reach your financial goals.