Another Fed Rate Cut - What Does it Mean to You?

Pick a newspaper... choose a news related website... turn on any news station and they are all talking about the next Fed Rate Cut.

When the dust settles we will all know what the new rate is and how much it has been lowered but who is able to tell you how this will affect you in these turbulent times?

The Globe and Mail reported today..."Investors are betting the Fed will lower the federal funds rate by half of a percentage point to 1 per cent...

"It will signal they are concerned about [the credit crunch] spilling over into the real economy," said Mark Chandler, a fixed-income strategist with RBC Dominion Securities Inc. "They will go to 1 per cent and keep their fingers crossed."

I don't know about you but words like "betting", "concerned" and "keep their fingers crossed" aren't instilling a whole bunch of confidence in me.

The article goes on to explain the Feds are now expecting the unemployment rate to rise even higher than initially anticipated.

They are saying the rate cuts to this point have done little if any in propping up the struggling stock market and the benefits of the cuts for the most part have not yet trickled down to the consumer and small business owner.

However they "expect that the plan will eventually be successful in stabilizing the current crisis, free up lending through the financial system, and as these efforts take effect, we should see a measure of confidence return to the equity markets".

These are the experts and it appears they really don't know either. Obviously no one knows for sure what will happen but my point it to not just blindly follow wherever they are leading us.

We are talking about your family, your livelihood, your business... your life.

Don't sit around to "wait and see". Make a plan of your own that you are comfortable with and follow it.

Get rid of some excess spending... are 2 cars necessary right now... do I need the premium channels on cable... can I get by with a Honda instead of the BMW?

Give yourself some breathing room, take a couple percent of your income and stash it away.

I'm not talking about panicing and acting from fear, just use some common sense so you can honestly say you have done all you can do.

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