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YOUR BOTTOM LINE

Natural Disaster Preparedness; How to Find the Best Job For You; How to Fix Problems With Your Credit Score; Living a Happier Life While Spending Less

Aired June 5, 2010 - 09:30   ET

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


POPPY HARLOW, CNN HOST: Good morning, everyone. I'm Poppy Harlow and this is YOUR BOTTOM LINE. Coming upon the show: how to find the best job for you and not waste your time looking in all the wrong places. We're going to show you also exactly how to spot any problems with your credit score and how to fix them; and be thrifty, how to live a happier life while you're spending less. The show that saves you money starts right now.

All right, well let's begin this morning with a story that is still unfolding. Forty-seven days after the explosion of an oil rig in the Gulf of Mexico, BP's underwater well still leaking oil, and one way or another, this disaster is going to affect this country for years to come. It is the worst oil spill in U.S. history, and now hurricane season is officially underway only increasing the threat.

Spencer Houldin is an agent with the Independent Insurance Agents and Brokers of America, he joins us now to talk about that and a lot more, how people need to be prepared for this.

Spencer, thanks for coming down, appreciate it.

SPENCER HOULDIN, INDEPENDENT INSURANCE AGENTS & BROKERS OF AMERICA: Good morning, Poppy. Thank you.

HARLOW: Let's start with the oil spill, because why this matters to people and their insurance policies is that its ultimately going to resolve I would guess, in fights between individuals that are affected, their property, their businesses, between whether it's the insurance provider they have that's responsible or whether it's BP that's responsible?

HOULDIN: Well, absolutely, you know, it's going to be tough to go after BP because everybody's going to be after them. So, I think we need to look at our individual policies. God forbid we get a hurricane and the oil end up inland on top of houses.

Our look at insurance home owner policy, if there is wind coverage on that policy, there's a good chance that that cleanup's going to be covered. There is an exclusion for pollutants, but because of wind, which is covered peril, threw the oil on the house, probably going to be covered. Same with flood. If the flood brings water in the house, some tidal water, probably going to be covered by the National Flood Insurance Program. Of course if you have six feet of water in your basement, the least of your problems is a little bit of oil on top.

HARLOW: That's true, but looking at hurricane season, as we said, officially now underway, it started on Tuesday. NOAA is predicting what they're calling an active to extremely active season. So let's pull up, look there folks on your screen what's expected -- 14 to 23 named storms, eight to 14 hurricanes, three to seven major hurricanes, Spencer. So, when you look at that, do you think people are prepared in terms of having the right insurance for this season?

HOULDIN: Trusted Choice along with Independent Insurance Agents and Brokers of America recently did a survey of over 1,000 households. And very interesting in that survey, 20 percent of the respondents felt that they were fully prepared.

HARLOW: Just 20 percent.

HOULDIN: Just 25, 50 thought they were somewhat and 20...

HARLOW: Three.

HOULDIN: Felt that they were not at all prepared. So, I don't think that people are prepared for it. What's interesting is that a follow-up question to that was whether or not people felt they had adequate insurance if a natural disaster struck. And 32 percent felt they did not have the proper insurance, so they...

(CROSSTALK)

HARLOW: But are they doing anything about it? I mean, how can they be better prepared? Hurricane season just started. You can go out today and get the insurance you need.

HOULDIN: Absolutely. You have to go speak to an agent. I recommend a Trusted Choice agent that really understands various companies, works for a lot of companies, can find the right solution to you to make sure that your coverage is in place and going to respond properly.

HARLOW: One thing that people can do that that is very inexpensive, but it's probably most important thing for them to do, is to be prepared and have a to-go bag. Right? I mean, it might seem like a little thing, but it's not, is it?

HOULDIN: It isn't. I mean, you have to prepare in general. Have a checklist ready if you have to evacuate, turn off utilities, lock the doors, lock the windows. What are you going to take with you? Make sure you have water, a battery operated radio, first-aid kits, flashlights, bring clothing, blankets, medicine, emergency phone numbers in case you need them.

HARLOW: Right and so once you get out of the house, should you be impacted by a major hurricane, you've got it deal with what is in the house and the house itself, and to do that you are going to have hours and hours of calls with the insurance company. A lot of people don't take pictures and they don't videotape their possessions, but they have to, right? Otherwise, do they even have a claim? HOULDIN: Absolutely. They do have a claim, but the onus is on the insurance policyholder to present that claim to the insurance company and if everything's gone and they don't know exactly what they owned, it's tough TO remember. It's an emotional time. What's in my basement, what's in my garage? I highly recommend videotape where you can narrate or still pictures or even just a list that you can write down.

One of the questions that we asked in that survey, actually, is how many people have done that? And 68 percent of respondents had not made any records of personal property.

HARLOW: And if you make those records, upload them on-line, keep them in the cloud, if you will, because they could get destroyed in the storm?

HOULDIN: Absolutely. Do not have them on premises. I had that happened to a client about 15 years ago. It burned with the fire. So, be preened.

HARLOW: Great tips. Be prepared. Spencer, thanks, appreciate it.

HOULDIN: Thank you.

HARLOW: All right, and turning now to another big story this week, the latest jobs report is out and unemployment is still stubbornly high, showing just how hard to get a job in this economy, but there are jobs that are out there. The question is, are you looking in the wrong places? Charles Purdy is a senior editor at Yahoo! HotJobs. He joins us now for more on that.

It was really interesting as I was preparing for this interview seeing how important the field is that you're looking in and the location. So let's start out first with the field. Where's the hiring right now?

CHARLES PURDY, YAHOO! HOTJOBS: Well, hiring is happening in a few important places and there are broad fields and that's good news. Health care is one that is seeing a lot of hiring, a lot of growth right now and the good news in health care is you can look beyond sort of the hospital environments, patient bedside care and into things like patient advocacy, into things like hospital records management. There's a wide array of jobs for different types of people, there.

HARLOW: And what's really key is looking at jobs in fields, because I know technology, marketing, sales, are some other growth areas. These are jobs that are a little bit harder to outsource. You can't really send them overseas.

PURDY: It's true. Marketing is a great job. It's another very wide field, good for creative people and it takes as broad array of education and it's good because it requires a deep cultural sensitivity and a cultural knowledge that's really hard to send overseas. Sales is great, too, in the same way because sales is sort of a high-touch industry. People want to have interactions with sales people.

HARLOW: Be there in person.

PURDY: Exactly. So, jobs like that are hard to send overseas, so they're good for a long-term career prospect.

HARLOW: If you're having just a horribly hard time finding a job. Maybe you've been out of work six months, a year, more for some people, you might have to think about relocating, right? I mean, there are some cities and I want to show folks this, the list that we have, these cities where there is a lot of promise for people looking for jobs, right?

PURDY: Yeah, there is promise and there are a few key things you want to look for when you're evaluating a city to live in. Not only are the job prospects good, but is there potential for long-term growth and is it a good environment for small business?

HARLOW: Some of the jobs on the list, Atlanta, Minneapolis. Why are those jobs -- cities where there's a lot of that potential?

PURDY: These are areas where the Bureau of Labor Statistics is predicting long-term growth and the overall job market, they're good cities because they continue to rely on one industry, and we can see how that has had a bad effect on cities like Detroit, for instance, relied on one industry, when that industry hit the bust, the whole city, it fails.

HARLOW: Let's pull up the list also, let's take a look at some of the worst cities when it comes to looking for jobs. New York, Detroit, L.A., Cleveland, St. Louis. Well, Detroit, Cleveland, St. Louis, all in the heartland of this country, all struggling from the manufacturing downturn and the auto downturn.

PURDY: Exactly. And cities like New York, which are expensive for small businesses, make it difficult for those businesses to hire. And small businesses are key. If you're looking for a job, turn to small businesses, I suggest, because they are often the first wave of new hires when the economy starts to slowly recover.

HARLOW: I think it's a tough pill for people to swallow that they may have to move to find a job, but if they have to do it, they have to do it.

PURDY: It is. And I would never suggest moving to find a job necessarily, but it's a good idea to open up your job search, if you are willing to move, and start looking in other cities. Online job boards and the Internet make looking in other cities so much easier now.

HARLOW: You can do it at home. You can do it at home.

PURDY: Exactly. HARLOW: Charles, great insight. Appreciate it, thank so much.

PURDY: Yeah, thank you for having me, appreciate it.

HARLOW: All right, and check this out, folks. It is the must- read story of the week on CNNmoney.com. Say good-bye to full-time jobs with benefits. It is not great news, but it's really important for you to know. Our senior writer Chris Isidore reports on how employers are hiring fewer full time workers and more contractors and of course, what it all means to you. You can see it right here on CNNmoney.com.

And next, a credit check. We're going to show you exactly how to spot the problems with your credit score and how to fix them. We'll help you in 90 seconds.

(COMMERCIAL BREAK)

HARLOW: Well, whether you're applying for a job or trying to get loan we cannot stress how important it is to have a good credit score. Under federal law, you're actually entitled to one free credit report per year from all three of the credit reporting bureaus. You can get that online by logging on to AnnualCreditReport.com. But once you get there, you'll see that it can get pretty confusing. So, we brought in an expert, John Ulzheimer, he's the president Consumer Education at Credit.com.

Thanks for being here, appreciate it.

JOHN ULZHEIMER, CREDIT.COM: My pleasure, absolutely.

HARLOW: You're going to help us go through this one. This is a fictitious report for somebody names William Davis. And the first thing you see, "C" there, a grade, and that's key, right?

ULZHEIMER: Absolutely. When you want to business with a lender, what they want to know is what kind of risk you pose. The score will determine whether or not they're going to even do business with you and if they are, under what terms and conditions.

HARLOW: So, that's critical and you want to move it higher, if you can. Let's go up here because the next thing you're going to see that's very important is this, personal information. What do you want to watch out here for and double check?

ULZHEIMER: This is where name, address, social and if you someday become Poppy Harlow-Watson where former names and also known as would go, you want to make sure that your date of birth and your social security number are absolutely accurate, 100 percent.

HARLOW: If not, just call in, correct them. Accounts in good standing, that's what we have next. What's important to keep an eye on here?

ULZHEIMER: Well, first off, you want to have all of your accounts in good standing. And what you're going to see here is you're going to see the lender, what type of account it is, a resolving, or installment, any balances, any sort of negative payment history. In this particular account, they've made all their payments for the past two years on time. so, this account is going to actually help their credit score very much.

HARLOW: So this is a good one. And as you see on this credit report, there's a lot of these accounts in good standing, but then -- if we scroll on down what we're going to see next -- and most people have something like this is negative accounts and also collections.

ULZHEIMER: Absolutely. In this particular case, this fictitious consume has a delinquent Macy's account, 120 past due on 180 days past due last June and July and unfortunately they've got an outsourced third party collection for about $7,200. You want to make sure this information actually belongs to you. And if not then you can challenge it and get it corrected.

HARLOW: Yes, spotting a mistake. You've got to be checking this how often, to spot a mistake?

ULZHEIMER: Well, that's a topic of debate. I always say that you want to look at your credit report multiple times per year because it updates every single month. So, 12 times a year your credit reports are going to change significantly. I'm of the school that you should check your credit reports at least once a quarter.

HARLOW: Why not. It can't hurt?

ULZHEIMER: Absolutely.

HARLOW: Let's move on down, because one of the things that you do have on here is public records. Something a lot of people might not think they'd have on their credit report.

ULZHEIMER: That's exactly right, Poppy. And there are a lot different public records, but the only public records that are going to end up on your credit report are going to be tax liens, bankruptcies and judgments. And there's nothing good that will ever be in the public record section.

HARLOW: You want this to be empty.

ULZHEIMER: You want it to be empty, absolutely.

HARLOW: Once public record is on your credit report, can it go away?

ULZHEIMER: Yeah, it will go away after seven to 10 years, whether it's paid or not.

HARLOW: Yeah. OK, something to keep an eye on. Try to keep that field empty. And then you have here, requests for your credit history. Why can this hurt you?

ULZHEIMER: These are called inquiries. And what this simply is, is the date and who it was that actually pulled your credit report. Inquiries are indicative of elevated credit risk, especially if you have a lot of them, because you're taking on renewed debt. So, it doesn't mean that you shouldn't shop for credit. What it does mean is that you should do so sparingly and only when you truly need credit. So, not at the mall to get a 10 percent discount.

HARLOW: Right. I won't do that again. People do that all the time.

Finally, here quickly before we wrap up, because of the new Wall Street regulatory reform bill that is headed to the president's desk, could be in the next few weeks, people can have access to a free credit score. Is that correct?

ULZHEIMER: That's right. Senator Mark Udall from Colorado has proposed the Fair Access to Credit Score Act. So, if you are denied anything a job, employment, obviously, insurance or any sort of loan based on a credit report or a score, you're going to get that score for free.

HARLOW: For free and didn't use to be able to get that. That's really critical.

ULZHEIMER: That's exactly right.

HARLOW: John, thanks. Appreciate the insight.

ULZHEIMER: My pleasure.

HARLOW: And coming up next, it is an up and down economy. We'll tell you the best places to invest your family's money. That's straight ahead.

(COMMERCIAL BREAK)

HARLOW: Well, it might be in your 401(k) and IRA, the stock market or just under your mattress. Well, we hope not the latter. But, the big question these days is where's the best place to put your money to make it work for you in this volatile market? Rebecca Rothstein is a managing director of Wealth Management at Morgan Stanley; she joins us from Los Angeles, this morning.

Thanks so much for being here, Rebecca. Appreciate it.

REBECCA ROTHSTEIN, MORGAN STANLEY: Good morning. Thank you for having me.

HARLOW: Of course. You know, there's a lot of graduates now, a lot of younger people trying to get into the workforce and trying to figure out how to save, pay off their loans. So, for someone, let's say in their late 20s, in their 30s, they've got that student loan debt. They've got the credit card debt and they've got a 401(k) from their company. What's the best way for them to start saving and investing right now?

ROTHSTEIN: Well, student debt is very expensive, so when we have people come in to talk to us the first thing we recommend is that they move quickly towards reducing their debt and spending well with inside of their means, because that is very expensive debt, that's the kind of debt that doesn't give you any kind of tax deduction. And it mounts.

So when we sit down, we tell people to look at their balance sheet, see how much money they're spending and from the decisions that we get from that conversation, we move rapidly towards making a plan that will allow them to reduce their debt on both sides of the balance sheet and start saving money.

HARLOW: And even if you have a good adviser you have to know yourself what you're talking about. And looking at this market for an average investor, so many people are rushing to invest in gold, for example, or they're looking at the oil market or their looking at certain stocks, and it's very risky to do that, right? I mean, what's the best way for an average investor to get into this marketplace?

ROTHSTEIN: You have to educate yourself and then determine and really clearly define what your risks are. And once you've identified what your debt is, and you've made a plan to deal with your debt, and now you have excess capital you want to start investing, make a plan.

But don't just follow the masses and don't, you know, read a headline and say, oh, that's for me. Because it's not generally the right decision to make, and a lot of people invest like that. You know, they get a tip at cocktail party and they go, oh, I want to buy that, and they don't know what they're buying. So, take a minute, teach yourself, ask people's advice and really think it through.

HARLOW: That's a great point, it's going to be well worth the time you spent. Rebecca, thanks for joining us, this morning. I appreciate it, thanks so much.

ROTHSTEIN: Thank you.

HARLOW: All right, well, get ready, folks, get ready to be thrifty, but not cheap. We're going to explain exactly how, coming up next.

(COMMERCIAL BREAK)

HARLOW: Well, you know, mastering your money isn't just about knowing where to invest or how to pay down your debt or how to score the best home loan. It's actually about those little everyday decisions that can really add up for you. Pia Catton and Califia Sungree are co-editors of "Be Thrifty, Not Cheap: How to Live Better with Less."

Ladies, thanks so much for being here, appreciate it.

All right, so I was thumbing through the book and I have to read you my favorite part so far, it says, "Adopting a thrifty lifestyle doesn't mean you need to move to an isolated cabin and start raising your own goats." I would hope not. You guys talk about a ne thrift, the modern thrift. So, one part here is, first and foremost, make things yourself or do them yourself when you can, right? I mean, Pia, let's start with you, what do you mean when you say do it or make it yourself?

PIA CATTON, "BE THRIFTY": Well, we think that there are a lot of skills that people can develop, sewing on buttons, making an omelet. These are really simple things that can save you a lot of money and make it really pleasurable to eat and have a sort of full and fun lifestyle at home.

HARLOW: That's true, and you're saving a lot of money, just eating out just wastes so much money. What about bartering, Califia, when you look at haggling. I mean, honestly, you don't walk into a clothing store and think you can haggle over the price tag. So when can you?

CALIFIA SUNTREE, "BE THRIFTY": No, yeah, it's all about context. You know, we have a wonderful essay by a woman who's from Mumbai where they really do haggle over everything. But in America we're not so easygoing with the haggling, but there's a time and place for it, obviously any kind of outdoor market, flea market, go for it.

But also when you're looking into a hotel room, or rental car, vacation packages, cable bill, I recently did that, there's completion for your dollar, you have leverage as a consumer and you should use it. You need to know the value of what you -- the price you can get and, you know, be friendly, be polite and go for it. just don't be afraid to try.

HARLOW: It's really worth research, especially on those monthly bills. You know, my cable e bill is like $130 every month and it adds up. And if you say, well, I'm going to go to the competitor, maybe they're going to give you a better deal.

SUNTREE: You have to mean it. You know, whenever you're haggling, but yeah, you definitely -- it's always worth a try, always.

HARLOW: What about choosing what you buy, Pia, very carefully? Because, you know, stores are set up to attract our eye to the most expensive brand.

CATTON: Absolutely.

HARLOW: And get us to put it in our shopping cart and head to the cash register.

CATTON: One of the best tips in this book is the 10-minute rule. So, you walk in a store, you look at something and you think, I love that bag, but 10 minutes ago I didn't know that it existed. So, you think back to that 10 minutes ago, did I really need it? No, I was doing pretty well, I was happy, maybe I don't know it. so, you waltz out of the store, think about it a little but more, and if it really sticks with you, then maybe go back. But you really have to control that impulse spending. That's what makes us not thrifty.

SUNTREE: Take a pause. You know, because maybe 20 minutes later you'll forget about it completely. And you know, one of our main tenets is shop and buy carefully, we call it conscience spending, you know, think if your buying, if need it, if you can get it for less, if you can get it used. You know, just think about everything you buy you don't just reach for it.

HARLOW: I think if you can get it used is key, whether it's a cars, or there's a lot of great consignment shops all across the country, used clothing...

SUNTREE: And they're popping up more and more these days. People are just going to them in droves, so they're a great resource.

HARLOW: And in terms of buying in bulk, when is that worth it and when is it not? Because, you know, we all love Costco, Sam's club; we think we're getting a great deal. When it's piling up and going to waste, you're not at all.

SUNTREE: No, you're not, and if you're buying something you would not ordinarily buy just because it's cheap, oh, and then you're not only just buying it, you're buying 50 tons of it, you know, that's not thrifty.

But, if you can go to a store, you know, do this try-out, you can do a try-out at any of those club stores. So, do a try-out, see if they have the items that you normally buy, bring the receipt with you, you know, and make sure that you're going to buy and use everything. And if so, it can be a real bargain.

CATTON: One of the key points about thrift is avoiding waste. So, if you end up with a lot of extra lettuce that you chuck, you're wasting money.

HARLOW: Throwing away your money, literally. All right, what are some of the tips you ladies have about bargaining?

CATTON: Bargaining is really easy if you are in an open air market, that kind of thing. you really just make eye contact, be friendly and be polite. It's not a confrontation, really, it's a process.

HARLOW: And in terms of you can do it with hotel rooms and all of that as well, right?

SUNTREE: Oh, yeah. It doesn't have to just be a flea market, even your cell phone bill, APRs on credit cards.

CATTON: You just have to ask.

HARLOW: Love it.

CATTON: It's worth a try.

HARLOW: Worth a try and you can save you a lot. The book, "Be Thrifty," ladies, thanks so much for joining us, appreciate it.

CATTON: Thank you.

SUNTREE: Thank you.

CATTON: Thanks. HARLOW: All right, well free stuff is always the best stuff. And coming up next, we're going to show you all the fun things you can do with your family this summer for free.

(COMMERCIAL BREAK)

HARLOW: Well, it's time for our "Free-For-All." And since this summer season is officially underway, we want to tell you about all of the fun, free stuff you can do this summer with your family. One great idea and it's educational, as well, visit a museum. Some of the biggest museums have free days courtesy of their big corporate sponsors. They also likely have free admission hours. You can just go to their Web site, check it out there.

And also, summer is a great time for these outdoor festivals, street fairs, concerts and shows. You can check out your local newspaper or community Web site and find out when they're going on and what kind of events they have.

And also, before we go, we have the big announcement. Just hours after last weekend's family money special, our very own Stephanie Elam gave birth to a beautiful baby girl, Simone Alexandra. There she is right there, weighed in at 6 pounds 4 ounces. Mother, daughter and husband Jeff are one big happy family. Congratulations to all and Stephanie, keep those pictures coming.

We'll see you right back here next week for YOUR BOTTOM LINE, the show that saves you money, same time, 9:30 a.m. Eastern, right here on CNN. And don't miss Christine Romans and Ali Velshi on YOUR MONEY today at 1:00 p.m. Eastern and tomorrow at 3:00. Arianna Huffington will be one of their guests, you don't want to miss that. Well, right now, it's time to check your top stories in the CNN NEWSROOM.