The bruised U.S. economy limped through the first quarter, growing at just a 0.6% pace as housing and credit problems forced people and businesses alike to hunker down. The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.

Consumers—whose spending is vital to the country’s economic health—turned much more cautious, also restraining overall economic growth in the first quarter. Their spending rose at just a 1% pace. To bolster the economy, the Federal Reserve is expected to lower a key interest rate by one-quarter percentage point to 2%.

Car Buying Is Easy If You Have The Right Resources

With car sales expected to be down this year, many dealerships will be desperate for any sale they can get, says Danny Chan, CEO of AutoBrag.com, a car-shopping comparison Web site that compiles price data from no-haggle dealerships. The slow conditions could prompt many of them to accept better deals as they struggle to keep their doors open, he added. But even though dealers might be hungry to make a deal, don’t expect that they’ll give in to your offers without a fight.

If you’re considering the purchase of a new car, you’ll need to prepare before browsing the show floor. Here are five tips on how to get a good deal on your new set of wheels:

1. Hit The Internet
The Web has a wealth of automobile information that can help consumers know how much they should be paying for a car and what deals they can get. AutoBrag.com tells consumers how much cars are selling for at actual no-haggle dealerships, and shoppers can use those quotes during their negotiation. Deals can also be found by expanding your online search to dealers beyond your immediate area. Even if the best deal is states away and the automobile needs to be transported to you, it may be worth the hassle.

2. Know What You Can Afford and Your Loan Options
Before negotiating, it’s also important to know exactly how much you can afford. But don’t max out your budget. Experts also advise not extending the term beyond the standard five years to bring monthly payments down. More manufacturers and dealers are now offering 7-year car loans; for a $20,000 car, the loan would rack up an additional $5,335 in interest.

And investigate loan options before hitting the showroom. Often, credit unions offer favorable automobile financing, Chan said. If opting for dealer financing, make sure you know what interest rate you should be paying before signing, he said.

3. Consider Older Model Years
When the 2009 models come out and 2008 cars are still on the lot, the older new cars can be bought at a decent discount for good reason — their age will cause them to depreciate faster. Two months before the release of the 2009 Toyota Camry, the 2008 model was being sold to consumers for an average of 5.32% below the manufacturer’s suggested retail price, Chan said. But during February 2008, when the new model was released, the 2008 model was being sold for an average 10.39% below MSRP.

4. Negotiate Before Incentives
Get down to a good price before adding an incentive, even if adding a manufacturer’s rebate pushes the price below invoice. In fact, keep all the transactions separate — negotiating the price before the financing and the trade-in value. You’ll often get the most for your vehicle if you sell it yourself. But if you decide to trade in your old vehicle, use the Internet to learn what it’s worth. You can simply ask AutoBragBlog.com for your used car value.

5. Don’t Cave To Pressure
It’s a buyer’s market, so don’t be intimidated and be aggressive in your negotiating. If the salesmen won’t budge and you can’t get the price you want, be prepared to walk away and try another dealership, Chan said. He also recommends not paying for extras such as paint protection; dealers often put a huge mark-up on this extra, and you may be better off having it done somewhere else.

The souring job market and rising costs of the usual teenage indulgences (a slice of pizza, a drive to the mall, the hottest new jeans) are causing teens to do something they rarely do: be thrifty. Jobs for teens have been less plentiful, and parents who supply the allowances are feeling the economic pinch themselves.

Secondhand clothing chains have seen business surge this year as teens and their parents buy popular brands like Gap, Banana Republic and Juicy Couture at a fraction of the regular price.

Teen hiring has slumped by 5% since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1% during the same period. That’s still not as bad as the 13% drop in teen hiring in the early 1990s. Last month, teen retailers suffered an 8% drop in sales at established stores. The good news is that the under-20 crew is still spending on tech gadgets like iPods, cellphones and headsets.

Job scarcity? There’s plenty of farm jobs and food factory jobs available. Teens are just not willing to work for minimum wage or even higher. Actually illegal immigrants are being hired over teenagers. Teens can’t work past a certain time and can’t work as many hours as an adult, so employers do not want to hire them. Here’s how to survive these new times: swap meet, garage sales, 99 cent store, good will, salvation army and Walmart.

529 college-savings plans have a bright future.

Several years ago, many were high-cost messes. Since then, some have been spruced up and others have been shut down. The important thing is that more people using these vehicles to save for college are getting a good deal.

Morningstar has been particularly pleased to see some regulars on their worst-plans list cleaned up their acts. It still isn’t perfect, but North Dakota’s College SAVE Plan, a worst constituent in 2006, changed for the better when it dropped its growth-leaning Morgan Stanley lineup for an assortment of stellar Vanguard index funds. And although it still has a few pricier funds in the mix, one of 2007’s worst, Missouri’s MOST 529 Advisor Plan, made its way off the list by adding better funds and cutting its formerly excessive expenses to a more reasonable level.

Morningstar complied their best and worst lists byfocusing on diversification, fees, flexibility, and the underlying funds when deciding which 529 plans to highlight. We like to see plans that aren’t heavily reliant on any one area of the market, because that can mean a more volatile ride and lower returns than what investors face at better-diversified 529 programs. Costs are key because they come directly out of investors’ returns, meaning the higher the price tag, the lower the returns.

The Best

• Illinois Bright Start College Savings Program OppenheimerFunds Inc.
• Maryland College Inv Plan T. Rowe Price
• Virginia CollegeAmerica* Virginia (American Funds)
• Virginia Education Savings Trust Virginia
• Colorado Scholars Choice College Savings Program* Legg Mason, Inc

The Worst

• Ohio Putnam CollegeAdvantage* Putnam Investment Management
• Mississippi Affordable College Savings Program TIAA-CREF
• Mississippi Affordable College Savings Program* TIAA-CREF
• New York 529 College Savings Program Upromise
• Nebraska AIM College Savings Plan* Union Bank (AIM)

Earners Feel More Secure Due To Their Confidence To Control and Preserve It.

PNC Wealth Management conducted the survey of people with more than $500,000 of investable assets. The Wealth and Values Survey showed that 69% of “wealthy” Americans accumulated most of their money through work, business ownership or investments; 6% percent received money through inheritance; and 25% gained wealth through a combination of inheritance and earnings.

A couple of things separate the earners from the inheritors: First, earners were in control of making their money, and therefore feel more confident about preserving it or making even more. Second, earners likely took large risks to achieve wealth. As we all know, as risk increases, so does return. Accordingly, earners are likely more comfortable with the concept of risk.

Driving the point of risk tolerance home, the report says earners also have a higher risk tolerance than heirs: 39% of earners rate themselves as moderate to risky investors compared with 21% of heirs. Those who inherited their wealth often view themselves as stewards for future generations. As a result, they tend to be more conservative in their approach to investing.

Other Intersting Finds:

•  Heirs are more than twice as likely to say “Having a lot of money brings about more problems than it solves.”

• More people who have earned their wealth (37%) agree with the statement: “The money I have made so far has come from being in the right place at the right time.“

• Far more of earners agree with the statement: “Every generation should be responsible for creating its own wealth” along with “It is more important for children to learn the value of money through hard work.”

Not a bad idea, adults!

 Young people’s financial know-how has gone from bad to worse.

High school seniors, on average, answered correctly only 48.3% of questions about personal finance and economics, according to a nationwide survey released Wednesday by the Federal Reserve. That was even lower than the 52.4% in the previous survey in 2006 and marked the worst score out of the six surveys conducted so far.

Fed Chairman Ben Bernanke stressed in a speech that young people must sharpen their financial knowledge so they are in a better position to make sound investment decisions throughout their lives. College students’ financial literacy also was tested this year. They answered 62% of the questions correctly.

The larger problem is a country where knowledge—especially the kind that may be acquired through schooling—is not valued. That’s why the most popular kids in school are never the top students. That’s why the smart kids get picked on.

Are people having four or five children just because they can? Because they feel that it shows their wealth and status?

Raising kids today costs a fortune. Last month, the Department of Agriculture estimated that each American child costs an average of $204,060 to house, clothe, educate and entertain until the age of 18. What’s worse, the desire to have another child opens one up to charges of elitism and status consciousness. In many major U.S. cities and their suburbs having three or more children has now come to seem like an ostentatious display of good fortune. The family of five has become “deluxe.”

We not only wonder, we marvel, we get jealous, we gawk. “Having three kids in the city is a way of showing off, absolutely,” says Elisabeth Egan, who, like many families she knows, moved out of New York to the suburbs of Montclair, N.J., to manage the feat. “A third child in the city is definitely a luxury good.”

A February analysis of Current Population Survey data by the Council on Contemporary Families found that in the past 10 years, the top-earning 1.3% of the population has seen an uptick in families with three or more children. According to the National Center for Health Statistics, 12% of upper-income women had three children or more in 2002, compared with only 3% in 1995.

For a couple’s every conceivable wish or worry, the parenting industry knows the precise formula of guilt, fear, hope, love and desire that will empty the parental wallet. Rather than fret about spending too much money, most parents these days are consumed by the anxiety of underspending on their children.

So parents quickly adjust to the demanding realities of the child-rearing industry. Today’s American children, by contrast, get an average of 70 new toys a year.  Baby showers have replaced bridal showers as the blowout du jour; American women today have an average of three. The accompanying baby registries have mushroomed into a $240 million business. In upscale urban areas and tony suburban enclaves, where luxury families are flourishing, that can translate to $800 a week for child care alone. So-called high-end nannies (those who hail from licensed agencies and come equipped with working papers and even driver’s licenses) can cost more than $50,000 a year on the books.

Most families simply can’t afford all this. And surely it can’t all be necessary.

Those with net worth of $1 million to $10 million reshape U.S. culture

• Middle-class millionaires now account for 10% of the U.S. population.

• 7.6% of American households, or 8.4 million households are middle-class millionaires

• The average middle-class millionaire works 70 hours per week

• Middle-class millionaires are five times more likely than the average worker to say they are always available for work

• 89% believes that anyone can attain wealth through hard work

• 62% believes that networking, or knowing many people, is the key to financial success

• 9 out of 10 middle-class millionaires say they made a bad career or business move, but almost three-fourths say that was crucial to their business success

• They are five times more likely than the average middle-class person to continue on in the same business course in spite an earlier failure

• 65% of middle-class millionaires characterize their approach to negotiating as “doing whatever you need to do to win“

• They say they need a net worth of $24 million to feel wealthy, and $13.4 million to be considered rich.

There Are No Excuses For Why You’re In Debt

Self-deception and a lack of control are the chief reasons for many poor spending decisions, and whiny explanations about wasteful purchases are nothing more than excuses for bad spending behavior.

1.  I could die tomorrow, so I’ll live for today. This immature attitude justifies actions of the buy-it-now and pay-for-it-whenever class. It’s the primary excuse for not saving money.

2. I work hard, I deserve it.  While it is true that many Americans are overworked and that you have to treat yourself occasionally, self-gifting is more prominent today because of advertising pitches to buy things “because you deserve them.” You also deserve to live out a retirement.

3. I don’t have a head for numbers. This is the excuse given for not paying attention to personal finances. Managing money doesn’t require complicated mathematics. Consumers now have a plethora of free online tools to help with all sorts of financial planning.

4. I’m too busy to compare prices or manage money. This might be true for a small fraction of people, but mostly it’s a lie. Shutting off the TV one night a week will provide most people plenty of time to manage their finances. For those truly time-strapped, consider hiring a good financial adviser.

5. It’s an investment. Most consumer purchases aren’t investments, because almost all of them plummet in value the moment you leave the store. So you don’t “invest” in a car, a plasma TV or a new pair of shoes unless somehow they’ll make you money. They are expenses. Calling them an investment is self-delusion.

6. I don’t earn enough to save money. Saving is not about what you earn, it’s about what you keep. If your paycheck truly covers only the cost of bare necessities, you have an income problem. It’s time to work more hours or earn more with the hours you work.

When people are feeling negative, they want to cheer themselves up by shopping. People have no idea this is going on.

A new study shows people’s spending judgment goes out the window when they’re down, especially if they’re a bit self-absorbed. Study participants who watched a sadness-inducing video clip offered to pay nearly four times as much money to buy a water bottle than a group that watched an emotionally neutral clip.

The new study released Friday by researchers from four universities goes further, trying to answer whether temporary sadness alone can trigger spendthrift tendencies. The study found a willingness to spend freely by sad people occurs mainly when their sadness triggers greater “self-focus.”

The researchers concluded sadness can trigger a chain of emotions leading to extravagant tendencies. Sadness leads people to become more focused on themselves, causing the person to feel that they and their possessions are worth little. That feeling increases willingness to pay more — presumably to feel better about themselves.

The government’s efforts to stimulate the U.S. economy by doling out checks to workers could backfire, according to two surveys asking consumers what they will do with their checks.

Nearly three-quarters of those asked on both surveys said they will either pay down debt or save any money sent to them as part of an economic stimulus package. The remaining quarter indicated they would spend the money, which is the goal of the program. So that’s $25 billion, not $100 billion, and it’s not clear how quickly it will be spent. What’s more, money that is directed toward lenders, be it to pay off mortgages or credit-card bills, is money that’s already been spent. In other words, it’s already done its job in helping the economy.

International Council of Shopping Centers  found that 46% of respondents said they would mostly pay off debt with the checks while another 28% said they would save the money. Both surveys found that the results didn’t differ across income levels.

The rationale behind the stimulus, which is primarily aimed at lower- and middle-income taxpayers, is that those with less income are more likely to spend the money on things they might not have been able to afford otherwise, such as big-screen TVs or new clothes. That in turn would boost economic activity and help the U.S. avoid a recession.

This is madness. As our infrastructure crumbles and our nation devolves into an uneducated, uncivilized social wasteland, we continue to amass trillions of dollars in debt creating bomb craters in the sands of Iraq.  If this continues, we will follow in the footsteps of all previous corrupt, immoral empires.

Why Americans Are Going Broke 

Times are bleak for the U.S. consumer. The average household owes 20 percent more than it makes each year. The personal savings rate is in negative territory. Record numbers of Americans are losing their homes to foreclosure, and millions more are struggling to keep up with their monthly bills and obligations. And the nation’s economy isn’t in much better shape.

The government is counting on recipients not to save it or put it toward debt but to do what they’ve done best over the past 30 years: spend it. NEWSWEEK’s Jennifer Barrett spoke with author Stuart Vyse about the wisdom of such a stimulus plan and why it’s getting harder for so many Americans to stay afloat.

NEWSWEEK: You say the common assumptions about why Americans can’t hold onto their money are insufficient. Why?
Stuart Vyse: The most common assumption is that people are irresponsible and that they are not wise about their money. It’s basically victim blaming … an attempt to shift the blame onto individual consumers. The other point of view on this issue is that it is primarily the fault of predatory lending practices–the “evil” credit-card companies. One of the most important factors is the easy availability of universal credit.

The House and Senate have passed economic stimulus packages that include rebates to taxpayers, which the government is encouraging them to spend. That seems like an irresponsible message for taxpayers who have debt or no savings.

Why is it assumed that the poor and middle class are likely to spend the rebates? Because, under normal circumstances, they are the ones who have less disposable income. If you are on the lower end of the curve, you are more likely to need the money for immediate expenses.

Why wouldn’t they save it or put it toward a debt?
If they are smart, they would. The problem for most who are seriously in debt is that $600 or so doesn’t amount to much. So what can consumers do in a world designed to encourage them to overspend? Using techniques from behavioral economics, it helps if you can make saving automatic. I also recommend automatic monthly bill payments. Split your paycheck into two with some going into a bill-paying account in which you have no ATM access, and the rest should go into another account that would house your disposable income.

What would you propose the government do to help reverse the trend in consumer debt?
One of the most important things is to promote savings … and obviously we need reasonable limits on credit.

If consumers actually saved money and paid off their debt, could it hurt the U.S. economy?
One reason we have all these problems is that we are supposed to. It drives our economy. If everyone had no debt and was into saving, then our economy—as it is designed today—would not be performing as well as it should, according to economists.

Check Out Their Company’s Reputation 

A federal court handed down indictments against 14 moving company employees for extorting money from customers. Allegedly, they would sucker people in with low estimates, then ask for much more money on delivery, and not release the goods until the price was paid. Of all the moving company complaints we receive at The Consumerist, this one is the most common.

It’s always important to check out a moving company’s rep beforehand; ask friends for recommendations, look up their BBB report, and see if they’re talked about on sites like MovingScam.com and MovingSham.com. Don’t just go for whoever is cheapest, a low-price could end up costing you a lot.

When Is It Time For Financial Intervention, Mom and Dad?

When does it make sense to search for a planner for your parents? In Jennifer Openshaw’s opinion, right now. It doesn’t matter what age or stage they’re at. Problem is, the majority of Americans wait until a crisis or retirement hovers over them to take action.

You can always use a triggering event to broach the topic, such as:

• A divorce

• An illness, even a short-term one. “What if this had been more serious?”

• Loss of income, even if minor. “What if [the primary breadwinner] lost his job?”

• A refinancing or a new loan. “Why did you need to refinance? Are you having some financial pressures?”

• Unpaid credit cards, other bills - a sign of trouble

Openshaw believes the keys to success in making this happen are:

1.) Remove yourself from the process. Don’t assume that just because you’ve been down the financial-planning road or invested your money yourself that you’re the one to handle it for your parents.

2.) Bring in an independent, fee-only adviser. Most advisers will only talk to you if you have $500,000 or $1 million in assets. That is, unless they sell commission-based products. Opt for an adviser geographically close to your parents, and one who is truly objective - meaning, they’ll charge by the hour, as high as $400 depending on where you live.

As part of her search, Openshaw developed a mini-RFP (request for proposal) that outlined my requirements (location, experience, references) and her needs. Those needs might include any of the following:

• Cash-flow (budgeting)

• Retirement planning

• Investments

• Insurance (life, but maybe long-term, too)

• Taxes

3.) Give them a say in the decision. Don’t forget to allow your parents the opportunity to meet and give the “go-ahead” with your planner.