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YOUR BOTTOM LINE

Tips to Know Before You File Your Taxes; Sweeping Changes to Your Credit Cards; How to Navigate Money in a Relationship

Aired February 13, 2010 - 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: Good morning, I'm Gerri Willis and this is YOUR BOTTOM LINE. Coming up, two months until tax day. Some very important tips you will need to know before you file your taxes. And the countdown to sweeping changes to your credit cards. What you need to know. And how to navigate that all too dangerous money mine field in a relationship. The show that saves you money starts right now.

Tax day is just some 60 days away. Ouch. And with the stimulus package offering deductions and credits on everything from home purchases to college tuition, this is the year to make the most of it and what's better than free advice?

Laura Rowley is a columnist with "Yahoo! Finance." She joins us now. Thanks for being with us. Thanks for being with us.

LAURA ROWLEY, YAHOO! FINANCE: Thanks for having me.

WILLIS: All right Laura, you say that some 70 percent of us could get our taxes done for free. How do we do that?

ROWLEY: That's right. Seventy percent of taxpayers make $57,000 or less. So, if you go to IRS.gov/freefile, you can take advantage of a partnership between the IRS and 20 different private software companies and do your taxes right online, file them electro electronically and get your return in as little as 10 days for free.

WILLIS: All right, and so the beauty of that is they put it right into your account. You don't have to wait for something in the mail. It happens pretty quickly.

ROWLEY: Absolutely.

WILLIS: Let's talk about what if I am not tech savvy and I really want to use a human being. What's the best way to do that?

ROWLEY: Well, there's a couple of options. If you make $50,000 or less you can use a source valued VITA, the Voluntary Income Tax Assistance program at 1-800-tax-1040 and you can find a local chapter near you with a volunteer who will sit and do your taxes with you. The AARP has 7,000 sites across the country where they will offer free help and you don't need to be an older person to take advantage of that. Go to AARP.org to find a chapter near you.

WILLIS: Yeah, those are great ideas. Now, I have to say though, tax software, talk about easy-peasy. Even if you're not the most technologly (ph) literate person in the entire world, the tax software is easy to use. What do you recommend?

ROWLEY: I absolutely recommend that for somebody who earns more than $57,000, because it's so intuitive, it asks you questions. How much did you make, did you own a home, how much did you pay in property taxes. It walks you through with a set of simple questions to make sure you qualify for all the deductions and credits that you're eligible for and look for program that will guarantee results, that will pay the penalties and fees if for some reason there's a mistake in your taxes.

WILLIS: I love that. OK, well, it's talk about H&R Block, Jackson Hewitt, all these storefronts out there, the chains that say we're going to do your taxes for you. Is that a good option for you?

ROWLEY: It is if you are in dire fear of software and a tax form makes you shiver. You can go there. Basically they're filling out the form for you on software in place of you doing it yourself. You will pay somewhere between $100 and $500. And steer clear of something called refund anticipation loans.

WILLIS: These are bad news because you pay so much money to get your refund early. Talk to us a little bit about what the costs are of get that refund ahead of time.

ROWLEY: Well, the National Consumer Law Center did a study last year and said mostly middle and low income taxpayers lost 800 million of those refunds to those anticipation loans. If you do that it, do it with the H&R Block and the Jackson Hewitt representative, and you have then electronically file you taxes, you should get it within ten days. You're almost better off if you don't have the cash up front to do that, to put it on the credit card and then the second you get your refund, pay off the credit card.

WILLIS: All right, well, there's also enrolled agents out there if you don't want to pay for a full blown CPA, other good ideas out there. We are going to be on this story for weeks and weeks and weeks as tax day approaches. Laura Rowley, thank you.

ROWLEY: Thank you.

WILLIS: The countdown is on. Nine days from now unprecedented changes to your credit cards. Issuers have been preparing for the loss of revenue by introducing all sorts of fees and new policies. So what can you do to protect yourself? Read every letter that comes from your card issuer. These changes they are burry in them in the fine print. Experts we talk to say that you may be receiving a lot of promotional APR deals, that's low cost credit cards.

These promotional offers will lure you in with low interest rates for a certain amount of time, but then at the end of the promotional period, you may be subject to an interest rate that's much higher than you were originally paying. So, for consumers out there, all of us, the take away here is before you sign on to a promotional card, make sure you pay off that balance before the card's special interest rate expires. And next on this show, everything and I mean everything you need to know about the credit card changes. There's a lot of confusion about the new rules and we're going to clear them up. Got a question? Send me an e-mail to gerri@CNN.com or submit your question at ireport.com. You won't want to miss all our questions. Next Saturday morning same time, 9:30 a.m. Eastern, right here on CNN.

But up next, the car watch. All the latest details on Toyota's massive recall. We'll give you a simple step-by-step guide to keep you and your family safe in 90 seconds.

(COMMERCIAL BREAK)

WILLIS: Camry, Corolla and now Prius, the list of recalled Toyota cars grew this week with the addition of the carmaker's popular hybrid in addition to some hybrid Lexus cars. So, if you own one, or you know somebody who does, that's pretty much everybody out there, hear what the latest info and what you need to know is Jon Linckov, auto editor with "Consumer Reports."

Jon, great to see you again and thanks for helping us.

JON LINKOV, CONSUMER REPORTS: Hi Gerri. My pleasure.

WILLIS: All right, so you know, we had 150,000 Priuses being recalled, some Lexuses being recalled. Apparently there's a problem with the brakes. What's going on here? What's the fix? Are these things safe to drive?

LINKOV: Well, overall, they're safe to drive, but because it's a braking issue people are really concerned, and rightfully so. The big issue is that when you're pushing down the brakes on a rough road, maybe it's a little pothole or icy, people feel a momentary lapse of braking.

So, it's almost like nothing's there and then they go forward and they have braking. But, that's obviously a problem. Toyota knew about this problem in early January, put a fix on the line for the Priuses they were building, but never told anybody about it.

WILLIS: All right, so you guys have suspended your recommendation of the Lexus hybrid, correct?

LINKOV: Yes.

WILLIS: And this is a big deal because people really pay attention to "Consumer Reports" recommendations when it comes to cars. Tell me, is that something that's going to be permanent, is it temporary?

LINKOV: What we have done for the suspension of recommendations for the Toyota and Lexus models is that when the manufacture is saying they're not confident in selling them and they're putting a stop sale on them, we're stopping the recommendation as well.

So, after they put them back on the sale we're going to see what happens and play it by ear at that point. We don't really have a plan to say immediately they're going to take it off, we're going to take it off. We want to see what the fix is and what's goes on with the models.

WILLIS: All right, we've had two recalls, 8.1 million cars, we're talking floor mats, we're talking gas pedals, you name it out there. We want to show people the cars and auto -- the makes and the models that we're actually talking about, so you can get a look at this as we talk about this topic.

But, I think a big question that people out there have is what's the best strategy if I know that my car is one of these that's being recalled, what do I do? Do immediately go to my dealership? How should I respond?

LINKOV: There's two things, you know, if you have a vehicle and you have experienced this sudden acceleration, the pedal getting caught by the floor mat, a sticky gas pedal, or the breaking issue, you want to call Toyota customer service and you dealer, immediately, and say I've experienced this problem. They're likely to bring you in, even have field reps talk with you or look at your car, because it's been a symptomatic vehicle.

If you haven't had that, but you still fall under the recall, and check your VIN number, what you should do really is, you can "A" wait for the letter to come in the mail, but that's going to be slow. Call your dealership, see what they're doing.

Right now, I've heard antidotal reports that dealers are backed up into March doing these various recalls. So, just showing up, if they're doing 50 cars or 60 cars a day means you're going to be on a crowded lot and they're going to tell you, look, we're already booked up, let's schedule an appointment, go home.

WILLIS: Well, you know, we're hearing 50,000 cars a day are getting a fix, but there's eight million of them out there, this is going to take a long-long time.

LINKOV: It is, about 225,000 vehicles have already been fixed. It's going to take a while and some dealers are work supposedly 24 hours a day or 15 hours a day. It's very scary, it's very impatient.

One thing to think of, with the sticky accelerator pedal, it's an older vehicle problem. If you feel it, that's one thing. If you haven't felt it, you're not going to have it on a new car. Also, with the throttle pedal sticking, take out that floor mat out and put it in the trunk, today. Don't keep it in your car, you're not going to have anything to catch on if you take that floor mat out.

WILLIS: You know, I want to tell our viewers, go to ConsumerReports.org to find all the fixes that you can do yourself, if you want to test your own vehicle, they've got great information, there. Check it out. Jon Linkov, thank you for helping us out today.

LINKOV: My pleasure. Thank you. WILLIS: Love is in the air this weekend. Valentine's Day got us thinking about couples and money. It's the biggest source of tension in just about every relationship. Next, how to talk money with your honey.

(COMMERCIAL BREAK)

WILLIS: Anyone who has ever been in a relationship knows that money causes conflicts like nothing else. So with Valentine's Day tomorrow, we thought now might be a good time for a crash course on couples and money. Jacquette Timmons is the author of "Financial Intimacy: How to Create a Healthy Relationship with your Money and Your Mate." Tricky to do. And in Los Angeles, clinical psychologist Jeff Gardere is back again with us. Welcome both, great to see you.

JACQUETTE TIMMONS, STERLING INVESTMENT MGMT: Thank you.

Now, Jacquette, I have to ask you this question. You say talking about money with your mate is romantic? Are you crazy?

TIMMONS: I know. It does sound oxymoronic. But, when most people talk about money what they're really doing is fighting about it or having transaction discussions.

WILLIS: It's not so much you talk, you Scream.

TIMMONS: Exactly. So what I am advocating is that people really have substantive conversations and get some context around your beliefs, your thoughts, your behaviors, why do you do the things that you do. And when you have those sorts of conversations, that will lead to a deeper connection. And that's why I say talking about it can be romantic.

WILLIS: All right, Jeff, so conversation, does it lead you to a deeper connection?

JEFF GARDERE, CLINICAL PSYCHOLOGIST: I absolutely believe that it does because one of the major factors that can destroy a relationship is when you have issues with finance. So, if you can get a lot of those situations out of the way, a prophylactic, if you will, as far as having a bad financial picture that can hurt your relationship in the future, I say to it.

WILLIS: All right, king of double entendre, there. OK, I want to show you some numbers though, because what's going on in the world is really changing how couples view money. Women are earning more. Let's look at these numbers.

First off, in 1970, only four percent of women earned more than their husbands. The tables are starting to change. In 2007, it was 22 percent. So I want, you know, Jeff, let me start with you. What does that mean for the power equation in a relationship and does this help us tackle money any better than we would have when women are driving the car?

GARDERE: Well, I think certainly men now have to realize that women have always been, but more than ever, are on equal footing with them. And now as women have more earning power, it enhances their self-esteem, the self empowerment, so that they can now put their foot down and be heard in their relationships.

And I think certainly we as men need to understand that we can solve our problems, our financial problems, much bitterer when we see our women as being our equals and we don't have to take all that responsibility on to ourselves.

WILLIS: When you're a young couple, maybe you haven't known each other that long, is it appropriate to start talking about money? Then maybe you're not married. You know, you're just dating. But shouldn't you start getting a clue about how your potential mate uses their money, spends their money, manages their money?

GARDERE: And I think therein lies the answer. It's not just talking about money or just talking about how you spend money, but finding out what their cultural values are about money. In these days if we've learned anything from this recession is that finance is very important to a relationship to help it grow and to help it stay strong.

WILLIS: Well, what do you think? Do you agree?

TIMMONS: I absolutely agree. I mean, you know, money is never just about money. So having the conversation really does tap into your philosophy, your values around it. And you know, when you're dating, you're getting all of the clues from the very beginning. So it's really important to observe, see what you like, see what doesn't sit too well for you and act accordingly.

WILLIS: Money isn't just money. I agree with that. Quickly, I want to show you something. White Castle has a essential offer out there for couples. Special deal, $12.99, you get 10 sliders, two drinks, two fries and a picture, who could ask for anything more.

TIMMONS: I think it's great.

WILLIS: Do you like that?

TIMMONS: I think it's hysterical. I think that if a couple can actually have the sense of humor to actually do it and enjoy it, whether they have the resources or not, to do something much more extravagant, I think it's fabulous because if you can actually bring yourself to do that, that means you have the capacity to probably withstand any other challenge that your relationship could encounter.

WILLIS: Jeff if you take me for sliders, it's over between us, OK?

(LAUGHTER)

GARDERE: But I think -- but I think the important thing here is we shouldn't equate how much money you make as to how important your love is. So, this thing with White Castle shows that you can be broke but still show your love. And that's OK. WILLIS: That's a nice note to end on. Guys, Jacquette, Jeff, thanks so much for helping us out today. Great information, we appreciate your time.

Plenty more help coming your way this morning from brown bag lunches that are easy on your waistline and your bottom line to the bare necessities. Just what do you really need and what can you learn to live without? All in the name of saving money.

(COMMERCIAL BREAK)

WILLIS: So many of us are looking to cut back on cash these days. And if you can cut calories along the way, well, all the better. Earlier, I spoke with Dana Cowin, the editor and chief of "Food and Wine" magazine about healthy, simple ways to have a delicious brown bag lunch.

(BEGIN VIDEOTAPE)

WILLIS: Dana, thanks for coming by. Let's start with this dish because I think this looks yummy and it smells fantastic. How do I make this chicken dish?

DANA COWIN, FOOD & WINE MAGAZINE: OK. It's a pulled chicken sandwich with Indian spices.

WILLIS: Yum.

COWIN: What's great about this is you can make it with -- instead of let's start with this dish because I think this looks yummy and it smells fantastic. How do I make this chicken dish?

Okay. It's a pulled chicken kish?

COWIN: It's a pulled chicken dish with Indian spices. What is great about this is you can make it with instead of mayonnaise, make it with yogurt so it's light.

WILLIS: Wow. It looks great.

COWIN: Yeah. And you know when you get a sandwich in a store and you're like where did they hide the meat? All I see is the bread.

WILLIS: There's a lot of meat in here.

COWIN: There's a lot of meat in here.

WILLIS: There is a lot of meat in here.

COWIN: So, for $5 you could have this fantastic sandwich and if you make a full recipe, you could have it for dinner the next day, you can add vegetables to it, you don't have to put it on a bun.

WILLIS: Use a rotisserie chicken, those are so cheap to buy and then you flake that chicken quickly and not spend a lot of time on it.

COWIN: That's right. You know, I love, you know, anything that's prepared, just shred it, mix it, put it between the buns.

WILLIS: Put it between the buns. I love it. All right, here's another fantastic dish. This is a noodle dish. It look like an Asian peanut noodle dish. Is it?

COWIN: You are so right. It's sesame noodles, and, you know, if you get that takeout at your desk, the office, it's greasy. These are...

COWIN: It is.

COWIN: Yeah. This is not greasy. It's quick to make, under half an hour, either using ingredients that you have in your pantry -- it's -- believe it or not, it's spaghetti. And my secret...

WILLIS: Really.

COWIN: Yes. If you overcook the spaghetti it actually tastes more Asiany when you mix it with peanut butter, a little sesame, a little soy, a little ginger. And you've got some good lime on there. That would be delicious right now.

WILLIS: You know, you would be able to make this maybe with something you already have in your kitchen and not buy anything, but again, this is cheapo, cheapo, cheapo to make.

Now, the next thing you have here is a fantastic tomato soup, and this is one of my favorite things. And you have an easy way of doing this. Tell us how you made it.

COWIN: Great. It's a tomato soup. You take canned tomatoes. OK, I'm not saying reheat Campbell's, which Campbell's is fantastic. This is your own version, you take a little heavy cream.

WILLIS: Heavy cream?

COWIN: Sorry. You can substitute yogurt, I'm sure you can, but basically you're making your own tomato soup, a little onion, garlic, tomatoes, put it in the blender, a little heavy cream and then, you know, pack it, bring it wherever you need it, heat it, eat it.

WILLIS: Heat it and eat it. I love that. OK, so you're really dressing up a can of tomato soup.

COWIN: Well -- but you made it yourself, remember. So, it tastes better that way, and the next day if you have something left over, you can add chicken, you can add noodles, you can add vegetables, and you can chunk it up and give yourself a totally new meal the next day. That's like $2.50.

WILLIS: Wow, and you can also put this on top of spaghetti, it could be a sauce.

COWIN: It could. You could. You are a hidden chef.

WILLIS: Very hidden. Ask my husband. This is bulgur, right? So, tell me about this salad because this is really healthy.

COWIN: It's so healthy. Bulgur is great for you. The trick to bulgur that you might not know, with fine bulgur, all you need to do is pour hot water over it and it plumps up, like you see here and then you can mix it with any kind of vegetable you want, feta cheese, cucumber. We put it in a pita as a sandwich, but you could eat it plain as a salsa. You could, again, if you wanted to add more protein, you could add some chicken, so you're looking at healthy. You're looking at cheap. You're looking at fast.

WILLIS: I'm starving. Dana, great food. Thanks for bringing it to us. We appreciate your time.

COWIN: It's so much fun to be here.

(END VIDEOTAPE)

WILLIS: Get ready to get back to basics. Today's "Free-for-All" is all about things we're learning to live without. And that means extra money in your pocket.

(COMMERCIAL BREAK)

WILLIS: Well, it's all about the bare necessities, now more than ever, just what do you really need? Rick Newman is the chief business correspondent for "U.S. News & World Report," and he says not nearly as much as you think.

Now Rick, you've done some fascinating research, market research, you've looked at economic data, you've talked to people who read your stories. What is it that people really need?

RICK NEWMAN, U.S. NEWS & WORLD REPORT: It's interesting because we're just starting to hear market researchers coming out with these reports saying here's how we think consumers are changing for the long term and how we need to market to them in the future and things like that.

So, I've been comparing that to what real people have been saying, as they've been writing in, calling in and interviewing them and stuff like that. And obviously a lot of people are dealing with less income, maybe it's because they've been laid off, maybe they haven't been getting a raise, salary cut, whatever, household income is down, and people are looking around saying OK, what really matters to me?

So, the things that really do matter in most cases, their home matters, obviously, security, stability in their community, kids' education, and people need an Internet connection. This is one thing nobody is cutting out, it seems, because...

WILLIS: Really.

NEWMAN: Absolutely, the Internet is clearly people's connection to the broader world. If you're unemployed and looking for a job, you have to have an Internet connection, you can't do it by phone anymore. WILLIS: Let's talk about some other things people are cutting out. Obviously , the home phone. And you know what's interesting about that, we were just talking about why do people have home phones anymore when you have a cell phone?

NEWMAN: Yeah, that's right. So, I think people are doing is they're looking at all the stuff they pay money for and saying what can I live without, what's redundant? A home phone is redundant for most people. Most people have a cell phone these days, you almost need one if you're working. And people are saying, well, I don't really use this home phone or it's just nice to have.

And look at all the alternatives we have now: Skype on the Internet, there are some new gizmos like Magic Jack, you plug into your computer, use your Internet connection to make phone calls. So, a lot of people are saying, I'm just canceling my home phone service.

WILLIS: And of course, another thing, along those lines, cable. You can watch TV on your PC.

NEWMAN: So, this is another one where you're paying for a lot more than you actually use, and when you start counting the dollars or the pennies you say I'm getting 150 channels, I only watch about three of them a week or something, hopefully CNN is one of them, but a lot of this I can watch on the Internet or I can, you know, maybe buy a program on iTunes or things like this. There are just alternatives.

WILLIS: Zulu (SIC).

NEWMAN: And that's a pretty big bill, that can be 100 bucks, 150 bucks a month.

WILLIS: All right, newspapers and magazines, we've certainly seen the numbers for newspapers, magazines going down, it's really hurt those companies. And more and more people are climbing on that bandwagon.

NEWMAN: And we certainly are feeling this at my company, ""U.S. News & World Report." So, obviously what people are doing, this is a -- you know, a magazine or newspaper is a discretionary purpose, and again, people say I can get this online for the most part. It might not be packaged exactly the way I want it to, it's not as comfortable to carry around, but tough. I mean, we got to cut back and that's a pretty easy thing to cut back.

WILLIS: You know, there was a time you would have said that's a necessity. That's really interesting you put it that way.

NEWMAN: The information is a necessity. They're just getting it a different way.

WILLIS: Exactly right. You say no more fancy dates. That sort of bums me out.

NEWMAN: Well, this is interesting. You know, online dating service, business is good for online dating service. Their bookings are actually up. But anecdotally, you know, people are cutting back on restaurant meals, they're cutting back on going out, and there are lots of articles in men's and women's magazines and Web sites and things like this about how to have cheap dates. And it's, you know, go find some free performances in town.

WILLIS: Go for a coffee.

NEWMAN: Go to the museum. Here's one that sent shivers down my spine. Go to yard sales. Now, that sounds like a pretty terrible date to me, but I suppose, if you're looking to get out of the house, it's an alternative.

WILLIS: Something to do together, right?

NEWMAN: I suppose.

WILLIS: All right, privacy, you say that's something else we're giving up.

NEWMAN: Well, this is another interesting trend. We know that people are moving in with each other whether it's just taking a roommate or moving into a group house. We actually see this in data because rents are coming down in most cities and one of the reasons is that people are just doubling up, tripling up, whatever.

And they're even -- another trend is adult children maybe recent college grads moving back in with their parents. Nobody exactly wants that, I don't think, but it's not a terrible option. In some cases, grandparents are getting to know their grandkids a little bit better, more proximity to the family, things like that. And privacy goes.

WILLIS: Right, privacy goes, but, you know, kids are saving up for their first home purchase that way, too.

NEWMAN: That's right. True.

WILLIS: All right, well Rick, great information. Thanks for bringing it to us.

NEWMAN: Happy to be here.

WILLIS: As always, we thank you for spending part of your Saturday with us. We'll see you right back here next week

And 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.