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YOUR BOTTOM LINE

All 50 States Report Higher Jobless Rates: What Are the Solutions?; Finding Ways Out of Debt; How to Make a Smart Career Move; Inexpensive Home Improvements to Get Your Home Sold

Aired March 14, 2009 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


GERRI WILLIS, CNN HOST: Hello I'm Gerri Willis and this is YOUR BOTTOM LINE, the show that saves you money.

Every weekend we're here to help you save, protect and build your money from your house to your jobs, your saves and debt. What you should be doing right now to survive in today's rough economy. YOUR BOTTOM LINE starts right now.

OK, so let's start by your house and your job, so many of you out there struggling to pay your mortgage and matters made worse by the dismal job market. All 50 states reporting higher jobless rates than last year with four states above 10 percent.

So, let's get to the solutions, for goodness sakes. And Dani Babb is the author of "Accidental Landlord," Sonia Alleyne is career editor with "Black Enterprise. Greg McBride is a senior analyst with Bankrate. Welcome all.

OK. I'm tired of the bad news. I don't want to hear it anymore, I don't want to hear about jobless rates, I don't want to hear about what's going on with housing. I know there are opportunities out there in this marketplace for people, no matter what you're doing.

Greg, I want to start with you, but I'll give everybody a chance. You know, mortgage rates, under five percent.

GREG MCBRIDE, BANKRATE: Flirting with record lows, great opportunity to refinance that mortgage. That can save you a couple hundred dollars a month. That makes a big difference in this type of economy.

The other thing is from an investment standpoint, you know, everyone's taking a real hit on the 401(k), but here's an opportunity to diversify, better diversify, maybe put money into different sectors of the market that you didn't previously have access to.

WILLIS: Well, wait a minute, Greg, I got to interrupt you. Diversify into what, though?

MCBRIDE: Well, you know, last year a bad year because 15 of 16 asset classes all fell in value. However, you're getting much better value now. If you've always wanted to have money in a particular area of the market, maybe you're underweighted internationally and you were reluctant to do so beforehand, you're getting much better value if it do it now. The key is, you have to a long-term perspective. This is not a time to make a quick buck.

WILLIS: So you're saying bring down those average investing costs by buying now, you're buying on the cheap. That's really good advice.

Sonia, we hear about the jobs market and how bad it is, but there are opportunities. There are companies hiring out there.

SONIA ALLEYNE, BLACK ENTERPRISE: There are and there are industries. We know that health care is hiring and the government is hiring. And I think when we think of government you think of these traditional type of institution, opportunities, but hiring in P.R. area, artists. I mean, there is a broad spectrum of opportunities there, if you go on to opm.org you can see the listing for all the federal jobs. But in each division of the federal government also has its own listing of what's available.

WILLIS: We often call that usajobs.gov. I think it goes both ways. But those with federal jobs out there if you're looking for one, it is great Web site. They have more than 45,000 jobs open. Who knew, right?

Dani Babb, for goodness sakes, you know, foreclosure, all over this country, right? But this actually spells opportunity for people who have the wherewithal to jump in and buy now.

DANI BABB, AUTHOR, "THE ACCIDENTAL LANDLORD": Yeah, we've had trillions of dollars taken out of this market. So, where is it? Take it out from underneath the mattress, stick it in investments or homes. Homes, right now, are at record lows. We have record low interest rates. We have huge amounts of inventory. I was helping someone get a condo in south Florida that was worth $700,000 three years ago for $20,000 from the bank.

(INAUDIBLE)

WILLIS: $700,000 for $20,000.

BABB: Even if she has to put 50 grand in, it's a 90 percent savings. Buy where the boomers are moving and you'll be very happy in 10 years. Awesome opportunity.

WILLIS: All right, but to do some of these things, Greg, you really need to have access to capital, to money, you need to be able to borrow, obviously. How do you do that in today's market?

MCBRIDE: Well, in this day and age, I mean, credit is still available despite all the stories we hear otherwise, but it takes good credit, proof of income, you have to have the pay stubs to show you can repay the loan and either money for a down payment or equity in an existing asset, like you're trying to refinance a mortgage. Those are really the three rules of the road. If you have those three things, you're in business. If you're missing any one of those three elements, there's some tough hurdles you have to clear in order to get credit. WILLIS: Sonia, I think for so many out there it's all about whether they can survive this state of joblessness and the down economy to get through to the recovery. What do you do right now if you're jobless to save yourself money, to make sure you can make it through the three to four to six months, who knows how long you'll be without a job?

ALLEYNE: Well, the thing is you have to keep yourself open to any opportunity. You have to be working and that's going to be really important. I talked with somebody the other day who was an executive and, you know, thought less of taking a job that didn't really meet her skill set.

You're -- we're in survival mode and so you want to be working. You have to -- if there are opportunities there, it may not be the ideal situation for you, but the goal is take it so that you can maintain your cash flow.

WILLIS: All right, Dani, you know, the president came out with a big plan last week to help people get through the housing crisis. Is this going to make a big difference? Do you think people should try and take advantage of it?

BABB: They should take advantage of if they're underwater in their mortgage, and even if there on time, that's the really big difference, here. If you're on time with your mortgage, you can still either get a refinance or a modification, you still have to go through your lender, but this is a time to pounce on those opportunities and the government is also helping small business entrepreneurs, which is a huge opportunity right now in the marketplace...

WILLIS: Is this a solution, though, to the housing crisis?

MCBRIDE: It's not going to solve the problem, no. I mean, it's not make the foreclosure issue go away. You know, the plan does a lot of good things. It doesn't go far enough in some areas, in particular, people underwater on their homes in states like Nevada, Arizona, California and Florida, they're well above that 105 percent ceiling of loan to value, they're not going to be eligible to refinance. And these are, in many cases, people that made payments on time, they made a down payment, they were a victim of nothing other than bad timing, yet they can't take advantage of today's low mortgages.

WILLIS: You know, what I'm starting to tell some people who I know are in deep trouble, at some point, sometimes, you have to walk away. Is that right, Dani?

BABB: You know, unfortunately, that is the case. If you are at the 105 LTV mark and you are going to take 15 or 20 years to recover, right now, you know, a good friend...

WILLIS: That's 105 loan to value.

BABB: Loan to value. Yeah. Yeah. And you know, a good friend of mine told me credit is worthless today because you can't get it anyway. So, who cares what your credit score, survive for the next seven years without it. And in cases, if that's in the best interest of your family, you may have to.

WILLIS: All right, buys, stay put because we're going to talk to you a little bit more. For more on issue No. 1, America's economy, anytime, and the rest of the day's news, as it affects your bottom line, just logon to CNNmoney.com.

Greg, Dani, Sonia, we're coming back to you and we want everybody to hang tight with us. We've got the answers you need to get your family out of debt right now.

(COMMERCIAL BREAK)

WILLIS: These are stressful times and having a ton of debt to deal with, well it doesn't make your life any easier, so, let's find a way out. Still with us, Dani Babb, Sonia Alleyne and Greg McBride.

Guys, welcome back. I want to talk about managing your money. Greg, let's start with you. You know, people have so much debt and despite the fact that interest rates are low, they're paying 22 percent on credit card debt. What is the essential step, right now?

MCBRIDE: Well, there are the haves and have nots and when it comes to credit cards, if you have good credit, a strong credit profile and low balances you've got a lot of bargaining power. But, if you have a lot of debt, if you're struggling to make those minimum payments in a month, you don't have a whole lot of bargaining power. So, you're going to have to make some tough decisions with regard to other expenses in order to free up that room to pay down that debt a little bit quicker.

WILLIS: And of course, the credit card operators are making it harder than ever to pay it down, because they're raising their rates, lowering the debt limits, so it really hurts your credit score.

I want to go to you, Sonia, because it's different if you're jobless. It's different if you're having difficulty finding a new job when you've got that debt. And I hear some people say, forget the credit card debt, just call them up and see if you can work out a plan, make sure you pay your mortgage first. What is the essential debt to pay off if you're jobless?

ALLEYNE: What's happening is everybody's panicked and they haven't really assessed what they're personal financial situation is. So, that's really the first point. You really have to look at, you know, what your situation is and what you can afford, what you can eliminate. And that's where we're finding people have a lot of problems eliminating the essentials.

And what I've been telling people, even if they are out of work, when you talk about broadening opportunity, the recovery area, which is bill collections, that's a place that's actually standing. So, when they're calling you, I would ask if they're hiring.

WILLIS: Wow, that's a great idea. ALLEYNE: You have to step outside your comfort zone and way outside of what you're used to thinking and try to figure how to make ends meet.

WILLIS: So, ask the bill collector if they're growing?

ALLEYNE: They're growing.

WILLIS: They're growing. That's an excellent idea.

Dani, you come at this from a different vantage point. You know, you're thinking real estate, you're thinking managing that money. I'm thinking what am I going to do with my mortgage. What's your best advice?

BABB: My best advice, first of all, always pay the thing you want to keep first. So, you want to keep your home, also that's a tax deduction, a tax write-off, so you'll want to pay that above and beyond anything else.

Revolving debt is the worst thing that you can have, right? So, you revolving debt is the thing that, one, you want to pay off last, but two you don't want to accumulate more of. So, stop, rip up the credit cards, don't use them anymore, start to pay off the balances that you do have.

Now, one interesting thing I'm finding, is a lot of people that I've been working with are able to successfully negotiate with their credit card companies even if they've been late or they have high balances or they have a slightly less desirable credit score to get those bills so that they can pay them because the banks don't want to lose more money.

WILLIS: Right, and we're seeing a lot of that now from some of these credit care companies issuers saying hey, we'll work with you.

I want to get you guys to answer an e-mail from one of our viewers. Tom asks: "My company just announced they are suspending their 401(k) contribution because of this current economic situation. Should I stop contributing to my 401(k)? I've been in it two years and I have $9,000 in it." Which is great, but boy, I'd have to stop him contributing. What a mistake if he's employed, right?

MCBRIDE: You still want to maintain the habit of retirement savings. Now, without that employer match, the 401(k) may not be the best option. I would recommend Tom looking into a Roth IRA. That might be a better option. You're subject to an income limit, but the benefit that is you can take money out tax-free in retirement. And then also pay off the high interest rate credit card debt.

WILLIS: And may have investment opportunities, too, in a Roth. The world's your oyster. In a company plan, you only have so many options.

MCBRIDE: So many options they give you, yes. WILLIS: All right, so well, you know, let's say, you know, we're like, Tom, you know, we're in a situation where we have a job, we've having a hard time saving. Where do you find that extra room to save month to month? Because I get e-mails from people who say, well, Gerri, it's well and good to tell people to say, but how do you do it in this economy?

BABB: Yeah, well, that's the million dollar question, right? Well, first of all you have to cut out all of the non-essentials. Figure ways, I've worked with people who have worked with their water company, their electric company to try and get their allocation increased, which dropped their overall utility bills. You have to get a little bit creative. Start carpooling, start cutting back on things you don't need.

And also, remember that if you're contradicting to your 401(k) and earning maybe three percent, you're lucky you didn't lose money, but you're paying 20 percent on your credit card, you might want to stop the contribution and put the money toward the credit card.

WILLIS: You can make an apples to apples comparison like that. How much am I paying for my debt, how much am I earning in my savings?

Sonia, when you think about managing that money and you think about getting rid of those credit cards and finding the savings, where do you look?

ALLEYNE: I agree with Dani, you have to cut off the non- essentials. And so, it can be all the things you were -- we're a very serviced-based society, and so a lot of the things that you would actually farm out you might have to start taking them inside.

Simply things like just taking your lunch to work can cut down tremendously in what you're paying for lunch at the end of the week if you do the averages. But again, you have to make the personal assessment of where you are, what you have, and about what you can afford.

WILLIS: You know, Greg, we're talking where to find savings. Of course, a lot of people find a lot of savings if they could just lock in these mortgage rates, right? But what so many people don't understand and what I find myself explaining over and over again, if you don't have a job you're not getting a new mortgage, right?

MCBRIDE: Exactly. Now, that's where the new housing plan that's come out has what the mortgage modification plan, and so somebody without a job, they may not be a candidate for refinancing without that steady paycheck, but could be a candidate for a mortgage modification, especially if they're out of work or if they've accepted a job that's paying a lot less than the last job that they had, that's a financial hardship that may necessitate modifying that mortgage.

WILLIS: All right, well, guys, great job, great information. We really appreciate your help.

The bottom line, now is a great time to refinance with mortgage rates at historic lows. So many folks out there are losing jobs, but there are sectors that are hiring. Check out health care, government jobs, green jobs and don't look at your 401(k) as piggy bang, you'll get socked with plenty of penalties for taking money out. Instead cutting back on contributions and using that cash to start an emergency savings, well, that might be a better option.

We'd like to answer more of your questions and the best way to do that is to see you asking us questions. Logon to iReport.com/issue1 to upload a video question for us anytime night or day.

Take the fear out of your job search. We'll empower you with tools you need to make a smart career move.

(COMMERCIAL BREAK)

WILLIS: There is more dismal news when it comes to the stated of your jobs -- 754,000 of you filed for unemployment benefits for the first time last week, but there's some employers who can't find enough workers. We can tell you where the jobs are and how you can make yourself a viable candidate by studying specifically for the job you want.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I'm graduating this term with a degree in business administration.

UNIDENTIFIED FEMALE: My concentration is in accounting.

UNIDENTIFIED MALE: Studying sales and marketing.

WILLIS (voice-over): Three students in pursuit of a college degree with one common goal: getting a job. All feel confident they're set, but it's how they're doing it that sets them apart.

JENNIFER MERRITT, WALL STREET JOURNAL: A lot of times if you actually go to your local community college and find out what kind of courses they're offering, what kind of employers are coming to them asking them to train people.

WILLIS: It's a solution DeVry University, which specializes in career training, with campuses in 26 states and Canada, is banking on to attract students in a tough economy, beginning with the end in mind.

DAVID PAULDINE, PRESIDENT, DEVRY UNIVERSITY: We start by going back end, the industry, employers that prospectively hire devry grads, and we asked them, what are the key requisite knowledge skill requirements that would make for the ideal graduate. Then we allow that feedback to shape or influence our curriculum.

UNIDENTIFIED FEMALE: You had to deal with organizations...

WILLIS: DeVry faculty consists mostly of practicing professionals, like professional Bonnie Rucks, Business Policy and Strategy. BONNIE RUCKS, DEVRY UNIVERSITY: It is a collimation of all of the students' learning experiences here at DeVry and their real world experience. They bring in their marketing, their operations management, purchasing, accounting, how do you merchandise, Internet marketing and they bring it all in there and figure out how to run a business.

PAULDINE: At DeVry, we believe heavily in applications-based learning or learn by doing. Our philosophy is that students learn best when they take theory and add to it application. So, theory plus application equal knowledge.

WILLIS: Knowledge in fields of study likely to result in jobs upon graduation. One subject area Pauline says is in R&D is so-called "green collar jobs," smart, considering incentives offered by recent stimulus packages.

UNIDENTIFIED FEMALE: With today's economy, it's very hard for us to determine what job offers we're going to be able to get, so just getting a foot in there is a first step.

(END VIDEOTAPE)

WILLIS: And these days, no matter who you are, you may have trouble getting your foot in the door. You need to do research, the Web is a great place to go. Check out CareerVoyages.gov. this is a Web site maintained by the federal government, you can do research on individual jobs here, like medical equipment preparers, you just click on this, and what do you see? Well a video of what a medical equipment preparer actually does day-to-day, minute-to-minute, in case you don't know, it's a great website.

Also check out StudentJobs.gov. This is also a government Web site. We've already ran the search for you here, and you can get a sense of exactly what people do, what jobs are open.

Let's take a look at air traffic assistant here, this will give you a sense of exactly how much you'd be paid, you'll find jobs, you'll find locations, what you need as background.

Here you see right there, this job pays as much as $57,000, that's nothing to sneeze at, obviously.

Snagajob.com is a great job for teens who are looking for part- time work, you really want to check this out. You just enter a zip code and it will help you find jobs in your area.

Now check this out, this is really cool. They actually map this out for you. So let's say you live in Roswell, here in Atlanta, the suburb, well, you see just how close those other jobs are, where they are.

Finally, if you want more details on this, just go to our show Web site and get a sense of what we have been talking about all week, follow up with the topics and stories that we're looking at.

You can still make money on your house, even in this real estate market, we've got easy ways to bump up your home's value.

(COMMERCIAL BREAK)

WILLIS: If you're trying to sell your home in this market and the offers are few and far between, well, you'll really want to listen to our next guest. Lou Manfredini, ACE Hardware's "Helpful Hardware Man," dropped by to tell us some cheapo ways to get your home sold.

(BEGIN VIDEOTAPE)

WILLIS: People keep asking me, well Gerri, should I redo the bathroom, redo the kitchen? I say redo what, no?

LOU MANFREDINI, ACE HELPFUL HARDWARE MAN: It's always driven me crazy, even when the market was good, when people would say, hey, I'm going to remodel my kitchen and my bathroom, then I'm going to put the house on the market. I'm like why wouldn't you do that and enjoy it?

WILLIS: Exactly. So, this is really about making the place look better, show better, but it's not necessarily about doing expansive upgrades.

MANFREDINI: Right, it's a little bit that you can do yourself and when somebody walks in, oh, this looks nice, and then they can still visualize what they're going to want to do with the home. But remember, price of that home is the guiding light whether it's going to get sold.

WILLIS: All right, let's get down to work, I'm rolling up my shirt sleeves. All right, so let's start in the kitchen, because we're going to do something cheap, inexpensive that will change the look. What do you recommend?

MANFREDINI: Cabinet hardware. Of course, people are going to still going at kitchens and bathrooms, and so you can find all kinds of different styles of cabinet hardware. You can do this yourself, it's very simple, it's a couple of screws. You can, you know, -- I really don't care what you choose, just choose something that looks nice that fits the same holes...

WILLIS: And you can find these kinds of things at any price point?

MANFREDINI: Any price.

WILLIS: What if I wanted to change the finish on my cabinets. I actually did this project recently. I didn't do it, I hired somebody to do it, but I could have done it myself.

MANFREDINI: Brand new paint, this is a cabinet and trim paint. Go ahead and dip in there a little bit.

WILLIS: Are they different from a regular -- is this latex?

MANFREDINI: It's a latex paint, but it's an alkaloid (ph). OK, now -- oh, geez. OK, all right, you -- wait, you said you did this? WILLIS: No, no, I hired somebody.

MANFREDINI: Yeah, because if you did it, I can only imagine what it looks like.

When you paint, first you start here, we try not to slap it on there. Let's hold it up so the cameraman can actually see what you're doing, because, you know, I have a 7-year-old who could do a pretty good job with this.

The idea is you don't want to put it on this heavy. OK, now what this paint does, this cabinet and trim paint, is it's a self-leveling technology. So, notice how, if you can look closely with -- boy, you really are doing a terrific job, here.

WILLIS: Well, you know, I just want to cover, you know, every bit of it so we don't have to go back a second time.

MANFREDINI: Right, but it's not a race, this isn't like the Indy 500. You want to take your time on this. Now hold on. Would you stop putting paint on there?

WILLIS: You always make a big mess every time you come here.

MANFREDINI: I'm trying to show people what happens. Typically, you're going to lightly sand the cabinets a little bit. Now, if you can get in closely there and see with the camera -- it's kind of hard with the color. Let me see if I do this. There will be a little bit of graining there, and you're going to even this out. What's going to happen when it dries, it's a self-leveling technology, with a second coat, this will look like you sprayed it on.

WILLIS: Really?

MANFREDINI: It really works terrifically well.

WILLIS: That makes such a big difference.

MANFREDINI: It does. And it's a soap and water cleanup. So you kind of get the benefits of an oil paint, but you get this really hard surface. It's this ACE Cabinet and Trim Paint, it does a terrific job.

WILLIS: All right, OK. Let's talk about bathrooms. What do I do there? I don't want to redo the whole bathroom, I just want to make some improvements.

MANFREDINI: You know, something like, you know, if you have got stains in a sink that you want to get rid of, maybe you want to consider that. There are kits where you have vanities and faucets and even mirror sets. If that's looking a little tired, you can buy a complete kit for under $500.

This is a place where there's a little bit of an investment, but I think it would be worth it because when somebody walks in, then you get a new shower curtain, maybe a set of towels, your whole investment is maybe $650. And it will change it with a little bit of paint on the walls and it looks good.

WILLIS: OK, we saved a lot of money today. And I want to say, thank you so much, Lou, for being with us. And next time you come, could you stay and clean up?

MANFREDINI: Yeah, I'm going to have to.

(END VIDEOTAPE)

WILLIS: As always, we thank you for spending part of your Saturday with us. You can hear much more about the impact of this week's news on your money on YOUR MONEY with Christine Romans and Ali Velshi, today at 1:00 p.m. Eastern and tomorrow at 3:00, right here on CNN.

Don't go anywhere, your top stories are next in the CNN NEWSROOM. Have a great weekend.

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