Archive for the ‘Uncategorized’ Category

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.

Today’s job hunters face incredible challenges. Thousands of positions are slashed every week, making employment competition tougher every day. Everyone needs an edge that will pull him or her ahead of the pack. The first rule of job-hunting is to ensure that you put your best foot forward, on paper and in person. But in addition to presenting an impeccable resume and impressive portfolio, job hunters today have to concern themselves with how their personal lives are portrayed online — information that for many is readily available on multiple websites.

Social networking sites like Facebook and MySpace offer potential employers windows into the private lives of job hunters like never before. Most job counselors would advise you to take down personal pages, as they can only hinder your chances of getting hired. But in an ever-changing economy and working environment, why not use such sites to your advantage?

Here are six ways social networking sites can boost your image, your job opportunities and ultimately your bottom line:

1. Market yourself to employers. Delete any compromising photographs of you and your friends, and tailor your page to portray yourself in a positive light. Maybe that means posting a G-rated photograph of your family on vacation, or an image of you pitching in at the local community service project. Employers prefer well-rounded candidates, so put your many dimensions on display.
2. Make your page an online portfolio. Have you been featured in a news article? Are items you’ve authored or designed available online? Post your online accomplishments on your page so employers can see all you have to offer.
3. Use the “About Me” section for your best sales pitch. Employers don’t need to know how you like to spend your Saturday nights. Instead, treat the “About Me” section as valuable real estate; use it to your advantage. Write a summary of your accomplishments and goals.
4. Inform your friends that you’re on a job hunt. Ask them to refrain from posting objectionable material on your page, or to avoid making public references to your drinking habits.
5. Keep your work and contact information updated. Make yourself as available as possible to employers.
   
6. Join a social networking site dedicated to making career connections. Sites like LinkedIn.com are dedicated to maintaining and expanding business contacts. The site also hosts job listings.

As we hear reports of how the delivery of the second $350 billion installment to the American auto industry will actually have strings attached (will wonders ever cease?), I’m still left wondering when homeowners ⎯ those who were complicit with lenders about fudging their income or not savvy enough to recognize the risks of interest-rate resets on sub-prime adjustable rate mortgages (ARMs) ⎯ will get some relief. It was, after all, the abuse of traditional sub-prime lending standards that triggered a global credit crisis.

The Federal Reserve has driven down home mortgage rates to record lows (5.10% on a 30-year fixed mortgage at time of publication), and yes, it’s spurred some refinancing, but lower rates aren’t going to do much for those holding ARMs that reset to an index plus an extra three to five points. And for anyone who bought their home within the past five years, at the market’s peak, they can’t even qualify to refinance because plunging real estate values mean they owe more than their home is worth.

Low refinance rates are really just helping those homeowners who bought their homes well before the credit crisis of 2007 and face no imminent foreclosure threat.

Most sub-prime ARM-holders who bought their homes since 2004 won’t qualify for a refinance, based on these typical requirements:

• At least 20% equity in your home
• A credit score above 700
• A mortgage debt-to-income ratio of less than 36%

Low mortgage rates aside, the federal government has patched together a medley of programs that together are expected to help about a million homeowners:

• The Federal Housing Administration’s Hope for Homeowners program, which failed to ignite enthusiasm by lenders interested in participating
• The Hope Now program, created by the federal government, lenders and nonprofit groups to help borrowers who have already missed payments but haven’t yet filed for bankruptcy
• Individual programs created by major retail banks to help borrowers
• The FDIC’s program for IndyMac borrowers

Do you think our leadership has failed to adequately address the mortgage crisis?

Hoping to move some inventory in 2009, Hyundai is offering to take back your new car if you lose your job or declare bankruptcy within one year of purchase. That’s right, you can return a new car the same way you’d return a sweater to the Gap, and without the fear of it negatively impacting your credit rating. The carmaker’s plan to forgive loans is the boldest move an automaker has come up with to combat guarded consumer-spending habits since the credit crunch and recession began.

Hyundai’s “Assurance” program is available on all new cars sold and leased through Hyundai financing, and is open to everyone, regardless of age, health or employment. In addition, the carmaker will accept new car returns in the case of physical disability, accidental death, loss of license for medical reasons or international job transfers. Hyundai will also cover up to $7,500 in negative equity. You’ll only owe what you did before the qualifying event occurred.

In an era that’s seeing hundreds of thousands of jobs slashed every month and the most jobs lost in the fourth quarter since World War II, people are afraid to saddle themselves with additional debt.1 But for many, owning a reliable vehicle is critical to earning a living at all.

The car conundrum is just another example of the recession’s grip on Americans. Economists agree the single-biggest recession trap is the lack of consumer spending. But spending money on a non-necessity is a scary prospect for people who don’t know if they can afford next month’s mortgage payment. It’s the ultimate “Catch-22″.

That’s why the Assurance program is such a breath of fresh air. Consumers can take the risk, spend money and hopefully spark auto sales, all with the security of a safety net should the bottom fall out.  Perhaps this initiative, coupled with current low gas prices, will crack the ice on consumer spending. And anything to spark spending is a move in the right direction to help America pull out of a recession that seems to have no end in sight.

Footnotes

1 “Carnage continues with 524,000 jobs lost in Dec. Unemployment rate rises to 7.2%, the highest in 16 years,” MarketWatch, Jan. 9, 2008

There’s nary an aspect of our lives that hasn’t been affected by the recession, and now it appears it’s even dogging us into the afterlife.

Funeral directors report a surge in the cremation rate as families short on cash opt for an alternative that costs less than half that of a traditional burial. A traditional ground burial with limo(s), a wake, service, embalming and a burial plot can easily cost $7,000 or more.

The rate of cremation has been steadily increasing all along ⎯ the national rate stood at 34% in 2006, according to the Baltimore Sun.

There are several reasons for this. Americans live more mobile lives. (Have urn, will travel. If you wish to visit your loved one after they’ve departed, you’ll have to commit to remaining within driving distance of the cemetery for the rest of your natural life.)

A growing environmental consciousness also favors cremation, which is a more eco-friendly choice than embalming with a toxic brew typically made up of formaldehyde, methanol, ethanol and other solvents; cremation also frees up open space that would otherwise be locked up by grave sites forever.

Now, though, the general trend favoring cremation is becoming even more entrenched, thanks to economic pressures that fail to spare even grieving family members.

If money was tight, would you consider paring back expenses, and possibly cremation, when handling a loved one’s funeral and burial arrangements? Or would you spare no expense?

Banks and credit cards have been unable to extend credit to consumers throughout the credit crisis. Previously, they were able to offer credit by selling off the loans they’d already made. When investors stopped buying the consumer debt due to the increased risks of doing so, consumer credit lending basically came to a standstill.

The Federal Reserve and Treasury Department announced a plan on December 2 that’s designed to inject $800 billion into the US economy. The addition of this new “bailout” is not a sign that the first $700 billion bailout of banks and Wall Street has failed, according to Treasury Secretary Henry Paulson, but an additional measure to more directly help the owners of securities that are backed by credit card debt, auto loans, student loans and small business loans. The Federal Reserve Bank of New York will lend $200 billion from the $800 billion TALF (Term Asset-Backed Securities Loan Facility) initiative, and the Treasury Department will put in another $20 billion from the original $700 billion bailout.

The TALF does differ in one major way from the other initiatives from the Treasury Department and Federal Reserve: It might finally help consumers. The goal of it is to free up more money to flow to consumers as banks begin lending money again. If this plan works, investors who are interested in buying loans bundled together into securities will have money available to do so; the banks will then have money available to lend profitably again, which gives consumers access to credit sources. So while the new initiative won’t put money directly into your bank account, it should make it possible for you to get approved for credit once again.

Today marks the 79th anniversary of Black Tuesday.

For many Americans with a long memory, October 29, 1929, was the opening act in what would become the Great Depression.

Black Tuesday was actually one of two horrific trading days in a stock market that had begun falling over a month earlier. After peaking in September at 381 points, the Dow Jones Industrial Average began its descent, finally plunging 12.8% on Black Monday (Oct. 28, 1929) and another 12% on Black Tuesday. The domino effect kept stocks in a freefall until the market finally hit bottom in July 1932.

The stock market crash didn’t just affect stockbrokers. It rocked the world of nearly every American in a period lasting from the late 1920s to the 1940s, wiping out life savings, contributing to massive unemployment and causing the collapse of banks and businesses. During the darkest days, 15 million Americans, or one-quarter of the population, were unemployed, and by early 1933, more than 5,000 banks had failed.

Franklin D. Roosevelt’s New Deal reforms, launched in 1932, were meant to lift the country out of the Depression through government intervention. The New Deal reforms included a series of banking reform laws, emergency and work relief programs and farming programs that helped pull an ailing economy off life-support.

“In the short term, New Deal programs helped improve the lives of people suffering from the events of the depression. In the long run, New Deal programs set a precedent for the federal government to play a key role in the economic and social affairs of the nation,” according to the Library of Congress.

There are many differences between the economic conditions in 1929 and those of today, and most economists doubt the challenges we now face will rival those of the Great Depression. Still, the 79th anniversary of Black Tuesday seems like a fitting time to note some striking similarities. The timing of the economic crisis, then and now, followed years of a roaring bull market and an equal dose of “irrational exuberance” among investors. A rising tide of bank failures, increasing unemployment and the loss of life savings to a falling stock market all sound like they could have been taken from the pages of a school history book.

What lessons do you think we can learn from the pages of history? What role should government play in the lives of its citizens?