Personal Finance

More holiday shoppers this year are using cash or debit cards to avoid overspending with credit cards. But what about the rest of the year? Is it possible in a credit-dependent society to get by without plastic? "Credit cards are not necessary," says Ed Fredericks, a finance professor at Pepperdine University. "Originally, credit was seen as a privilege. Soon it kind of turned into something that everyone had to have. Multiple cards were mailed out to people, whether they were able to carry credit or not."

M oney is tight, so all the better reason to make sure the charity you donate to this year will use your cash wisely. Now more than ever, you have tools at your fingertips to check out a charity, from its annual filings with the Internal Revenue Service to ratings by watchdog groups. Even just a few minutes of research can help you decide whether a charity is for you. For example, I considered adding two charities to my annual giving. One mailed an appeal featuring cute kids in need.

It's not just uninsured patients who rack up steep medical bills. Even if you have insurance, you might not realize that your coverage is inadequate until you're sick and overwhelmed by co-payments and other health costs. "Medical costs are the single largest contributor to people declaring bankruptcy," often including those who already have insurance, said Ron Pollack, executive director of Families USA, an advocacy group. To help consumers avoid getting buried under hospital bills, Families USA recently published a handbook, "Your Medical Bills: A Consumers Guide to Coping with Medical Debt," which is available online at www.familiesusa.

A s soon as Congress passed legislation to expand the $8,000 first-time homebuyer credit, readers started sending in questions about whether they would qualify under the new rules. The legislation, signed into law last week, gives people more time to purchase a house and allows even current homeowners to receive a credit of up to $6,500 if they buy a new principal residence to replace the old one. It raises the income limits so more buyers qualify. The new law also addresses concerns about fraud after a recent report found that the Internal Revenue Service had paid out millions in homebuyer credits to thousands of ineligible people, including some 4-year-olds.

If you're behind on your state taxes, you have just about two weeks to come clean and avoid severe repercussions. Maryland's tax amnesty program, launched in September, expires Oct. 30. Under the amnesty, individuals and small businesses must pay back taxes, but they will only owe half the interest usually assessed and won't face civil penalties or criminal prosecution. And for the first time, delinquent taxpayers have the option of paying up under a plan that stretches payments out until the end of next year.

One of the big hurdles of teaching personal finance to children and young adults is how to do so without boring or confusing them with lectures about compound interest and annual percentage rates. Now there's a growing effort to reach and teach kids on their own turf: online games. More than 70 percent of people play some form of game, and that percentage is far higher among teens. Gaming experts see this huge number of players as an opportunity to package critical lessons into an activity that people enjoy.

Washington is proposing rules, restrictions and the creation of an entire federal agency to stop dumb consumers from repeating the mortgage disaster or something just as bad. Maryland has another idea. Make dumb consumers smart. Don't let kids out of school without a basic understanding of interest rates, bank fees and scams that will persist no matter how baby-proof Congress tries to make the system. State officials are about to reveal proposals for personal-finance instruction that could be in the classroom by next fall.

Obama administration officials are trying to steer the nation out of its biggest financial crisis in many decades. Just how good are they at managing their own finances? To find out, we asked James Angel, an associate professor of finance at Georgetown University, and John Bacci, president of Foundation Financial Advisors in Linthicum, to look at the financial statements of some top administration officials. The statements, which cover assets and income for the previous year, are posted online by ProPublica, a nonprofit focused on investigative journalism.

It is the year of living cautiously for investors with individual retirement accounts. The economic problems that felled investments and job security have turned many formerly eager IRA investors into tentative souls. "We've seen a slight increase of a few hundred dollars per account in the IRA contributions made in 2009 compared to last year, which is the good news," said Ken Hevert, vice president of retirement savings products for Fidelity Investments. "However, we've also seen an overall decrease in the number of people actually making those IRA contributions."

The economic stimulus package, particularly the first-time homebuyer credit, generates lots of questions to our consumer blog, Consuming Interests. Tax professionals Theresa M. Bandell, director of Stegman & Co. in Baltimore, and Mark Steber, vice president of tax resources at Jackson Hewitt in Sarasota, Fla., provided these answers: Question: : Does the credit of 30 percent on an energy-related investments - windows, furnaces, insulation - up to...