Last month I put my credit knowledge to the test at FreeScoreQuiz.com, powered by FreeScore, and confirmed what I suspected, I have a great handle on the dos and don’ts of money-management.

But knowing, and doing are two totally different things.

I’d like to think I am a responsible spender. I use cash instead of credit whenever possible to avoid unnecessary interest fees. Wait for sales and flip over amazing bargains. In fact, years later I’m still basking in the shopper’s-high glow of a few score-of-a-lifetime bargains. I’ll spare you the details… this time.

But discount shopping fun aside; I have my spending slip-ups too. I love live music and nights out with friends, and rarely say no when presented opportunities to participate in either. Leaving me to wonder: Am I really responsible with my money? Or do I just turn a blind eye to my bad habits?

I figured it was time to face facts and see if I truly practice what I preach, or should learn to keep my comments to myself the next time my boyfriend plays 36 holes in one day.

Good thing then Filbert the Squirrel is back with another revealing quiz from FreeScore, this time specifically for Facebook. The FreeScore Financial Personality Quiz helped me determine whether I’m a “Jet Setter,” “Money Maven,” “Cheapskate,” or “Living on a Prayer” when it comes to my finances.

Apparently, I’m NOT a “Jet Setter” — really no big surprise there. But Filbert and FreeScore did help me figure out a thing or two about what kind of money-manager I am, and I’m sure the FreeScore Financial Personality Quiz on Facebook can do the same for you.

Take the FreeScore Financial Personality Quiz on Facebook and then tell me what you learned about your own spending habits.

You see them all over the Internet; those enticing little links challenging you to test your brainpower with an IQ test. While entertaining for sure, you don’t really learn anything more than how well you take an IQ test — and possibly that your teenage cousin is way smarter than you. Ouch. Personally, if I put the time in, I want something more applicable to the real world out of it. Take for example the FreeScoreQuiz.com site, brought to you by Freescore.com. There, I tested my knowledge of the credit-scoring world and actually learned something about what makes it tick — which in this credit-crunched economy is more important than ever.

Funny little Filbert the Squirrel of FreeScore fame happily guided me through a series of questions designed to test and educate me about the ins and outs of the credit community. A little understanding of what are and are not positive credit practices goes a long way to helping me improve my score.

We all know (or some of us do anyway) that a poor credit score and battered credit history can raise your interest rates, cost you a mortgage and even stop a home purchase dead in its tracks. But FreeScoreQuiz.com — and of course, Filbert the Squirrel — revealed just how far into other areas of life a low credit score and less than stellar credit history can reach.

I got a little tripped up on a question asking who exactly has access to my credit report — apparently employers, landlords, and even insurance companies do. Who knew a few late credit card payments could hurt my chances at landing a job or getting a new apartment? Well, apparently Filbert the Squirrel did. And now so do I.

Even if you think you know it all, it’s always good to take a second look. Who knows you might learn something new? I know I did. And when I forward FreeScoreQuiz.com to my bratty… I mean brilliant cousin, hopefully she will too. And with any luck she won’t make those college-age credit mistakes that could kill her credit score years before she even enters the real world.

We’ve all heard the ads from companies that claim they can help you settle your outstanding debts for far less than what you really owe. But as with most things that seem too good to be true, it turns out that these claims are too.

Many consumers who find themselves trapped by debt are lured by these advertised promises to reduce your debt burden, sometimes by up to 75 percent. In return, the companies require an upfront fee. However, these fees can turn out to be rather large, depending on the size of the debt, and with payments required in advance, there’s little incentive for the companies to follow through on their promises.

Now, New York Attorney General Andrew Cuomo is calling many of these debt-settlement companies out on their empty promises and shady practices.  He’s subpoenaed fee-structure records from 14 debt-settlement companies and one law firm.

“Today, millions of hardworking Americans are finding themselves imprisoned by debt. In response, a rouge industry has stepped in, offering consumers false hope, charging tremendous fees, and leaving them in a worse financial situation,” Cuomo said in a statement to the press.

But consumers need to take responsibility to protect themselves before getting involved with disreputable companies in the first place. The best way to protect yourself: Read the fine print! Know what you’re getting into before you agree to anything or pay one penny.

Attorney Gail Hillebrand told MarketWatch that consumers should steer clear of any company that requires payment upfront. She also warns consumers to avoid doing business with companies that tell customers to stop paying off their debts while the company is in the negotiation process. If you stop paying, she says, you’re only setting yourself up for harassing phone calls from collection agencies and the very real possibility of lawsuits — not to mention significant damage to your credit score.

Instead, Hillebrand says you should contact creditors directly to see if you can work out a payment plan before you’re in too deep. Credit counseling is another avenue to explore before jumping on board with one of these for-hire companies, because it has the least impact on your credit rating.

A truly great bargain offers an unforgettable experience. I still bask in the glow of getting a designer dress originally priced at over $400 for a mere $52 — and that was over four years ago. But ask anyone — male or female — to recall their all-time best bargain, and within seconds they’ll proudly describe the details of their steal. (In a quick, unscientific survey, four out of five men were able to tell me all about their “deal of a lifetime.” I’m willing to bet the fifth’s girlfriend must do all of the shopping.)

Surprisingly, or perhaps not so surprisingly in this economic climate, one man’s first response was “my house,” and another said “my car.” We’ve been hearing for a while that now is the time to act on a new home purchase if you can afford it. There’s a lot of inventory out there, and many sellers are willing to make a deal — not to mention foreclosure and short-sale bargains. Now it appears that car dealers are backed into the same “must-sell” corner and willing to do what it takes to move overstocked inventory, including selling cars for less than what they paid the factory.

According to MarketWatch, dealers “were selling about 25% of all 2009 model cars below cost” by March 2009.

While I have to appreciate the amazing deals that means for consumers, I also find it somewhat bittersweet. It’s certainly a huge advantage for car-shoppers to score a new car at such a discount, but it’s also another indication of the sad state of the economy. Dealers willing to lose money just to get cars off their lots present staggering economic implications.

When gasoline was priced over $4 per gallon last summer, Toyota dealers couldn’t keep their prized gasoline-electric hybrid Prius models in stock. Consumers were calling dibs before the cars even arrived on the lots and paid thousands over sticker price just to get behind the wheel of these fuel-saving machines. Fast-forward almost a year: Gas prices have dropped by 40 percent, the economy is ailing (to say the least), and those formerly coveted hybrids are sitting on lots with no where to go, even with the energy efficiency tax credits available.

I’d like to think it’s the economy — not apathy towards the environment following lowered gas prices — that’s stalled hybrid sales. But regardless of why, the facts remain the same: The cars simply aren’t selling.

And here’s an interesting illustration of supply and demand: Last July, eager car-buyers were paying up to $4,000 above sticker price to own a 2009 Prius. Today, you can get that same 2009 Prius for $4,000 BELOW dealer cost in some cases.

So if you’re able to cash in on incredible savings, it seems now is the time to do so. Be sure to head to the dealership educated and ready to negotiate, and you too could drive off with the deal of a lifetime.

Since the beginning of the economic downturn, the tumbling stock market, a contracting job market and massive home foreclosures have occupied the nation’s attention. But there’s another effect of the ailing economy that’s just beginning to reveal itself: increasing car repossessions and the violent altercations occurring between repossesser and repossessee.

The economic slide and rising job-loss numbers increase the probability that consumers will default on their car loans, since most consumers will likely put a mortgage or rent payment before a car payment. Some analysts expect the number of repossessions to climb by five percent this year — on top of a nine-percent jump in 2007.¹ Others, however, predict a decrease in car repossessions because the number of financed cars has dwindled 32 percent since the recession began.²

But just because the pool of cars scheduled for repossession is shrinking doesn’t mean violent encounters over those cars will evaporate too. In fact, it’s quite the opposite. Car owners today — very aware that a sickly credit industry will make it much harder for them to replace a repossessed car with a new one — are desperate to hold on to the cars they already have.

While confrontation seems a natural aspect of the repossession process, the escalating resistance by some car owners is quickly turning the parties involved into casualties of the recession.

In a nearly unregulated profession, Joe Taylor, a repossession company insurer, warns the Associated Press, “If a guy is just put right on the street without training, the potential for violence is very, very high.”¹

When the dust settled on a dirt road following one such scuffle between 67-year-old retiree Jimmy Tanks and the men sent to repossess his Chrysler Sebring, one man was left dead and another charged with his murder.¹

According to reports, Tanks heard a noise outside his Alabama home late one night in June 2008, grabbed a gun and ran outside to confront the intruders. Who fired first and what happened next is less clear. What is clear is that a gunshot wound to the chest killed Tanks that night. Now, repo man Kenneth Alvin Smith awaits trial on murder charges for the 2:30 a.m. incident.¹

Since Tanks’ death in June 2008, two repo men also employed by Smith’s company have been involved in separate shooting incidents — leaving one wounded and the other dead.

With no end to the recession in sight, we’re only left to wonder if this violent trend will continue, and for how long.

Footnotes
¹ “Violence between repo men, car owners on the rise,” FoxNews.com, Feb. 27, 2009

² “The Recession’s Gotten So Bad, Even the Repo Man’s Singing the Blues,” Phillips, Michael M. Wall Street Journal, March 10, 2009

Earlier this year, I pledged to live a cash-only lifestyle. Well, as much as possible. Some things — like the cable bill — are better left to automatic bill paying. When I took this challenge on, I knew one large obstacle lay ahead: A Park City, Utah, vacation that I had committed to last summer. But I’m happy to report that a combination of planning and frugality resulted in an affordable and — most importantly — interest-free vacation!

Here’s how I did it:

• Lodging: 6 people, 5 nights — $350 per person.A friend took the reins on this vacation. She reserved the house, and the rest of us made our checks out to her.TRAVEL TIP: Travel during the off-season. We went in mid-March, at the start of the off-season to save money. We rented a three-bedroom duplex within walking distance to the Park City resort and downtown at a reduced rate because we waited until after the busy season was over. Plus, our late-season adventure afforded us beautiful weather and wide-open slopes.

• Airfare: $333 roundtrip.I booked a roundtrip coach flight from New York to Salt Lake City (direct going, one stop returning) online for $333 and paid with my debit card to avoid interest fees.TRAVEL TIP: Check out Kayak.com. The travel website cross-compares fares from hundreds of other travel sites and tracks price variances from day to day to help you pinpoint the best time to jump at a good deal. You can also set up “fare alerts” that send automatic emails when the prices drop for flights you’re interested in.

• Car rental: 4 people, 5 days — $90 per person.There was just no way around this expense. We visited several mountains within an hour’s drive from Salt Lake City — Park City Mountain Resort, Alta Resort, Powder Mountain Resort and Snowbasin Resort — making an SUV rental absolutely necessary.TRAVEL TIP: A friend negotiated the SUV rental at a mid-sized sedan’s price. All it took was a friendly inquiry at the rental company’s counter when he picked up the car. I suggest you try it too.

• Ski rentals and lift tickets: $134.That happens to be my total. I didn’t ski as much as the others did. But here are a few tips everyone can use to save.TRAVEL TIP: To avoid oversized baggage fees at the airport, we left our gear at home and rented equipment in Utah. Also, we rented everything for the week and purchased discount lift tickets in advance from one off-mountain rental shop and saved a bunch off day-of lift tickets and equipment rental charges at each individual mountain.

• Food and Drink: $199 per couple.As a group, we decided to stay in and cook instead of hitting expensive restaurants every night. Each couple was responsible for buying whatever they needed to create our respective culinary masterpieces. Leftovers were brought to the mountain the next day for lunch, and everyone grabbed an extra bag of chips or two for after-mountain snacks. This amount also includes the traditional post-mountain lodge drinks to warm us up before our trek back to Park City.TRAVEL TIP: My boyfriend and I religiously contributed to a change jar we started in April 2008. Before we took off for Utah, we cashed out $374. This completely offset our food cost and helped our lift ticket cause.

While the trip’s cost certainly wasn’t chump change, we cut corners where we could to make it manageable. Planning far ahead afforded all of us the time needed to set money aside and pay off our trip beforehand. Using cash while there ensured that memories, not the bills, were the only things left over once we arrived home.

While my results are mixed, I’ve realized something: credit and debit cards have spoiled me. I remember a childhood spent going to the bank with my mom to pick up cash for our errands, and you know what? I am really glad I don’t have to do that — other than the missed lollypops, of course.

It seemed almost every time I needed something, my wallet was empty. While it did curb some spending — e.g, I got creative with what was already in my cupboard instead of calling delivery or going out to eat — for the most part, it was just a hassle.

The month before I cut credit cards and use cash, I charged a total of $975.95 to my debit card. In the process I discovered I spent one-third, or $338.83, dining out. So this month I made a point to bring lunch whenever feasible, eat leftovers and get creative instead of calling for takeout.

The result: Less overall spending, but more in the “food” category. Here’s why: I went on a ski vacation!

Treating friends to a lunch and cocktails is almost exactly the difference between last month’s $338.83 and this month’s $468.36. But it was something I wanted to do, so I certainly can’t complain. Plus, the $330 from the change collection I’ve been working on all year covered all of my lift tickets and rentals.

Overall, though, I was still able to reduce my monthly cash flow by $157.20, for a total of $818.75.

All in all, I don’t think I was as disciplined as I could have been, but I did wind up saving overall. For my next trick, I’m going to really put the squeeze on my budget and see if I can bring down my total by another $150 — or more — next month.

First Hyundai “assured” customers they could return their new cars if they lost their job within one year of purchasing it without any negative impact to their finances. Next, the car company upped the ante by tossing in three months’ worth of payments to give you time to look for a new job. Well, now it seems their “we-understand-it’s-hard-out-there” approach to business is catching on. Citigroup just announced its pledge to take a similar approach with its customers.

The seriously-hurting bank promises to cut monthly mortgage payments to $500, on average, for three months to give mortgage holders who’ve lost their jobs and have fallen behind in payments a little breathing room. Citigroup thinks the new Homeowner Unemployment Assist program will help thousands of mortgage holders bridge their financial gaps until they can find a long-term solution.

According to FoxNews.com, to qualify for the program:

• Homeowners must be at least 60 days past due on mortgage payments or in foreclosure.
• The home has to be a primary residence.
• You have to be able to pay the reduced mortgage payment cost.
• As a homeowner, you’re required to meet all insurer and guaranty requirements.

The bank says it may expand the program to include early delinquencies as well as customers current on their mortgages after the initial phase of the program is underway.

This program will certainly offer a sigh of relief for homeowners struggling to deal with mounting debt in the face of unemployment. And in an era when companies seem to thank the American public for massive corporate bailouts by throwing expensive parties for themselves in Las Vegas and paying out big executive bonuses, perhaps this is a sign that at least one company is starting to “get it.”

What do you think? Does Citigroup actually care about its customers? Or is this just a flash-in-the-pan attempt to improve its image?

Adversity breeds ingenuity. And one Florida lawyer has come up with an ingenious way to fight back against foreclosures: force banks to prove they have the right to foreclose in the first place.

The same convoluted system that helped collapse the mortgage lending structure in the first place could hold the key to stopping many foreclosure proceedings. That’s if attorney April Charney’s argument catches on nationwide.

She contends that, since a lending bank typically turns mortgages into bonds — which are put in trusts as collateralized debt obligations (CDO) — and then “sells” the right to collect revenue, the bank no longer legally owns the mortgage or the right to foreclose on it.

According to the New York Post, her strategy is working in Jacksonville. So far, she’s forced banks to admit they don’t have legal ownership and stopped foreclosure proceedings many times over. Her argument has “spread virally around the country and now thousands of foreclosure lawsuits are sitting idly — in legal limbo.” Charney has one case that’s been in limbo since 2004 because the bank simply hasn’t come back to court.

Now Charney is traveling the country giving seminars and recruiting other lawyers to use this defense. Brooklyn judge Arthur M. Schack told the Post he denied 13 out of 14 foreclosures last summer based on the same principles:

“I want to see the servicing agent’s power of attorney, I want to see all the paperwork before I approve it,” he said. “If the paperwork is garbage, I deny it. If you’re going to take away someone’s home, it should be done properly.”

I totally agree with the judge’s — and Ms. Charney’s — sentiments. Foreclosing on a home shouldn’t be done hastily or taken lightly. Banks need to treat each and every foreclosure with the same weight and severity that its outcome inflicts on the homeowner.

What do you think of April Charney’s approach? Will her tactic change the course of the nation’s foreclosure epidemic? Or is it just another band-aid waiting to get yanked off?

While there’s obviously no guarantee that this recession will follow the same path as ones that have come before, here’s a very interesting look at how this downturn compares to some of the biggest of the last 80 years.

The chart above, created by dshort.com and updated on Feb. 25, gives a very compelling look at the stock-market path of the current economic recession compared to those of the Great Depression, the 1973 oil crisis, and the recession caused by the collapse of the technology bubble at the beginning of this century.

A lot of facts, figures and odd measurements (like the actual height of a stack of one billion dollar bills) have been thrown around since the start of the recession, but I find this chart a very tangible quantification of what’s really happening. Hopefully, you will too.

Do you find this chart illustrates the recession better than others you’ve seen? Does it help you put the recession in real terms?