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Boycotting BP: Is It Really Hurting Them?; Is Housing Heading For a Double Dip?; Health Care and Your Premiums; Jump-Starting Your Career; Keeping Kids Safe Online
Aired June 19, 2010 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN NEWS ANCHOR: Good morning. I'm Christine Romans.
On tap this half hour, it's your biggest asset, your biggest debt, your home. Is housing headed for a double dip? We're also talking health care, wait until you hear where your premiums might be headed. Jump starting your career, how to get back into the workforce after a time-out for baby maybe. And keeping kids safe online, safety tips and tricks. Plus the best software for your home computer. The show that saves you money starts right now.
But first, BP has been making headlines every single day for two months now with the oil disaster in the gulf. Also making news, boycotts of BP gas stations across the country, including right here in New York City. But when you boycott BP, are you really hurting British Petroleum and how will you feel the gusher in your wallet this summer?
Here to break it all down the personal finance author Lynnette Khalfani-Cox and Rick Newman is the chief business correspondent for "U.S. News and World Report." Thank you for joining us.
I want to start first with BP. A lot of people -- if you -- a lot of people are talking about getting BP out of your life, getting big oil out of your life because they're so angry about this oil disaster in the gulf, but when you look behind it, if you boycott a BP gas station you're boycotting a small business owner who just has the BP name.
RICK NEWMAN, US NEWS & WORLD REPORT: The global economy is a real pain, because nothing is as simple as you want it to be. So what we've learned is many of the gas stations own by -- say BP and owned by small businesspeople that really have nothing to do with BP.
You know, BP employs about 29,000 people in the United States. It's based in England, but it's got lots of operations here in the United States and most of those people had nothing to do with the oil spill. So you know, it really doesn't make sense to harm them.
This is a great time. As President Obama pointed out, look at your own consumption of oil. I mean, we are by far the biggest consumer of oil and if you're driving around in an SUV or two that gets 18 miles to the gallon and complaining about the oil spill, keep in mind that the reason BP's down there is because we need that oil. ROMANS: Right, the truth is we use every single drop of the stuff they suck out of the ground and the United States depends on people like BP to get it out of the ground. And if you're trying to get BP out of your life, it's not as easy as you think. I mean, we have this breakdown of a barrel of crude and you look at a barrel of crude and you see how the barrels breakdown. There are about 42 gallons in a barrel, 19 goes to gas, 10 goes to diesel, there's four for jet fuel and some other things.
But look at that other products there. That other products are things like lipstick, shoes, computer cases, baby products all different kinds of things.
NEWMAN: Certain kinds of plastics.
LYNNETTE KHALFANI-COX, PERSONAL FINANCE AUTHOR: Exactly.
ROMANS: Right, it's hard to get big oil out of your life if you are an American consumer.
KHALFANI-COX: And you said the right world, consumer, because it's all about consumption. All the stuff that we're buying, whether it's lipstick, like you said, sneakers, plastics, et cetera, and all the things that we go, whether it's travel, I'm guilty of that a lot, you know, filling up the gas tank in your car, all of those things actually require this stuff.
So, the key really, if we want to, you know, we can all point the finger at BP and ultimately I guess they'll be held accountable, but listen, we really do have to take a tough hard look in the mirror if we want to tackle this problem in the long run.
ROMANS: And I think it sparks conversation about renewable, about nuclear energy, about alternative energies and our own personal consumption, as well, and that is a discussion that's going to continue, I'm sure, for months and years to come.
I want to talk quickly about something that's happening in the gulf, though, that is kind of important. There, CitiMortgage also Fannie Mae and others have announced some lighter rules for people who might be having trouble with their mortgage. Citi is suspending foreclosure sales and filings for 90 days through September 17 on gulf properties.
These are for first mortgages on homes within 25 miles of the coast. The company says it will probably be maybe 1,200 different homeowners right away who are helped, maybe thousands more after that, but, we'll, you know, we'll closely watch to see what happens for those people who are really hurting down there.
But in the meantime we're watching housing and there's more talk this week of a double dip, Rick, in the housing market. A couple of key reports showing, oh, boy, well, I guess surprise, surprise, the rebates are up and the housing market is on the ropes.
NEWMAN: I keep wondering why we're surprised every time it sounds like there's trouble in the housing market. I mean, this is a catastrophe if the housing bust, it's gone on for a long time and it's not going to suddenly just end and we're all going feel better. It's just going to slow out, somewhere down at the bottom and it's not -- probably not going to come any time soon. It might be next year. And then prices aren't going to go shooting back up again. So, we get all fixated.
There's something like a dozen housing indicators that come out almost every week, they're up, they're down. Sometimes they're up and down in the same week. You know, the unemployment rate is really the best indicator of when the whole economy, including the housing market is going to improve. When that starts to get better consistently, not just one number, but consistently, we'll know that everything else will get better right behind it.
ROMANS: I completely agree. And I think it's got to be sustained private sector job growth, you know? I mean, a lot of people were kind of hot on the census jobs. You can't go out and buy a house on the census job you want private sector job creation.
KHALFANI-COX: Those are temporary jobs, obviously. And speaking of the numbers and the tie between unemployment and housing, I read an interesting statistic that said in order for us to get unemployment down to more normal levels, maybe around six percent or so from the 10 percent levels we're at right now, the economy would have to add 15 million new jobs by 2016.
KHALFANI-COX: I don't see that happening any time soon, unfortunately. And so that's the biggest challenge. We've got to get some confidence back in the market, we've got to get employers being willing to hire, being willing to sustain folks on the payrolls and if they're not, people aren't going to be able to go out and buy new homes, add to their homes, buy stuff because they feel confident about the economy.
ROMANS: We're in a position, though, here's my question, you know, so you have new home sales or new home builds were down, home sales are down, you know, the tax credit has expired, but interest rates are 4.8 percent on 30-year fixed.
NEWMAN: It's incredible. It's so tempting.
ROMANS: If you can get 15-year money, it's 4-1/4 percent. It's ridiculous and there's a huge supply of homes.
NEWMAN: There is a great argument that it's a superb time to buy the home if you can get the loan and if you have the money.
KHALFANI-COX: And the credit.
NEWMAN: Yeah, so housing prices probably are not going up any time soon, but interest rates could go up. So, if you're in a position to buy, don't sit there and say I want to buy at the absolute lowest point. Timing the housing market is just as foolish as timing the stock market. Just don't try it. If you feel like you're really getting a good bargain, it really is a good time to do it.
KHALFANI-COX: You know, researchers at Morgan Stanley had a different take on this. They actually said that the presence of low interest rates and the fed, of course, is expected to keep rates very low, will actually help the economy avoid a double dip.
ROMANS: I see.
KHALFANI-COX: Their theory was that, listen, people are -- we're still going to have these kind of mini-refinancing booms because of low interest rates, and homeowners who are able to do refinancing will be more cash rich and able to spend on other things. I don't buy that argument, frankly, because people aren't able to cash out like they had been in the past because home equity is so low, a lot of people are under water.
So yeah, we might see some people still who have great credit, as you say, who can refinance or buy, take advantage of that, but I don't see that necessarily being the factor that keeps us out of prospect of a double dip in the economy.
ROMANS: So, we agree that if you're in a position, now is the time to buy, if you're in the position. And we agree that once the job market gets better, the housing market can get better and you can decouple those two bad situations, people can start to move again, you can start to sell your house, you can sell your house to go try another part of the country.
KHALFANI-COX: That's right, for a job.
ROMANS: Yeah, great.
NEWMAN: I'll buy that.
ROMANS: Rick Newman and Lynnette, thank you, both.
Up next, startling new reports on where you're out-of-pocket health care costs are headed. We'll tell you everything you need to know now to save big money in the years ahead.
ROMANS: All right, we've got news on your health care and you might just want to sit down on this one. According to Price Waterhouse Coopers your employee health insurance deductable could rise to $400 or even more next year. That report also says medical costs, they're expected to increase nine percent.
Let's get straight to our expert panel about all of this. Andrew Rubin with NTU's Langone Medical Center and the host of "Health Care Connect" on Sirius XM Doctor Radio. And also back with us Lynnette Khalfani-Cox.
For months you've been telling me to watch out, if you have employer sponsored health care, you could see premiums begin to rise. They were rising with or without health care reform. ANDREW RUBIN, NYU LANGONE MEDICAL CTR: Yeah, there's really no surprise in this PWC report. But, what essentially it's saying is while health costs are going up for society at large, and employers the way you try and control it is shift the cost back on to consumers, people who actually get the health care insurance. So, this PWC report basically came out and said the way to do that, higher copays and deductibles, higher, you know, health insurance premiums for employees.
ROMANS: So more of us are going to see higher deductibles for our health care.
RUBEN: That's correct.
ROMANS: What can we do about this? Is there anything we can do about it? I mean, we have to be saving money elsewhere in our personal budget to make sure that we're covering our costs who are rising?
KHALFANI-COX: That always helps to help to cut back on other things that are perhaps frivolous areas of spending to deal with, even unexpected events that might not be covered beyond the copays and the deductibles. I think you should certainly try to negotiate a little bit.
If you're going to make any cash payments, we still have tens of millions of people who are uninsured as a whole, you know, negotiate directly, maybe take on a billing advocate and there are some medical billing advocates out there, Access Project, medical billing advocates, they will sort of decipher your bills for you and look through it and make sure you're not, you know, charged $30 for an aspirin or double billed and those kinds of things.
ROMANS: Do you pay somebody to do that for you?
KHALFANI-COX: Thos are. But they're very low cost and actually a lot of employers provide them as an employee benefit, very low monthly fee, but it helps to keep those costs down, as well.
RUBIN: Absolutely. And the big key here is in addition to this, is to plan ahead so you know, you know, we're giving out information, we know you're out of pocket expenses even though everyone thinks health care reform is going to solve all the problems in health care. It's not.
It's going to address access issues and we're going to get -- a lot of people are going to get benefits that they never had before and people who cannot afford it at all will have access, as well. But in fact, costs are still going up and until this is fully implemented, it's not going to change. So again, plan ahead, if you know you have higher premiums next year, higher deductibles, and you will, start putting some money away now.
KHALFANI-COX: ...in terms of planning, a lot of employers offer those FSAS or flexible savings accounts.
ROMANS: But, those rules are changing, too and that's something that's got some people because people who are the micromanagers who plan like crazy and know exactly -- they think it as almost a tax cut for them the way that they plan their...
KHALFANI-COX: Because you put the money aside on a pretax basis.
ROMANS: But those are changing, and you mentioned that before.
RUBIN: Their changing, some of the rules are changing over the counter prescription medicines can't be, you won't be able...
ROMANS: I won't be able to use my saline solution anymore to get to my max.
RUBIN: Exactly. And what's scary at the same time, the number of employers offering high deductible plans has doubled since, over the past two years, so in fact, more are shifting to these high deductible plans liked to these health savings accounts, yet the rules are changing where we're going to have less flexibility on how we use those dollars.
ROMANS: Do you think now about how to be a consumer of health care because of these differences, for example, if you're having a baby and you know that next year, you're having a baby or if you need a hip replacement and next year is the year you want a hip replacement, these are the kinds of things you have to think about.
RUBIN: Absolutely. You should thinking about it, we talked about this all the time, I'm sure Lynnette thinks about this all the time, too, you should always be planning ahead. You know, when we're healthy we tend to not focus on our choices as it relates to choosing a health insurance plan or saving money towards health care, but in fact, it's a huge expense when you need it and the more you plan ahead the better off you're going to be.
KHALFANI-COX: Go get those check-ups, take a lot of preventive measures, you know, don't skip out on those annual physicals and things of that nature. Do what you can. Reduce your risk of getting lung cancer, for example, by stop smoking. You know, overt tendencies of obesity by eating less and hitting the gym more, those kinds of things, and those kinds of things that people do have control over can also help them to reduce their health care costs.
ROMANS: An apple of day sure beats a $30 aspirin, right?
KHALFANI-COX: That's right.
RUBIN: Certainly does.
ROMANS: All right, thanks so much Andrew Rubin and Lynnette Khalfani-Cox.
Two of the most difficult decisions a new parent can make, when and how to return to work. Tips to jump-start your career, next. (COMMERCIAL BREAK)
ROMANS: Whether it's been a few months or a few years, re- entering the workforce after having a baby that can be stressful and emotional. So, how can you set yourself on the path of successful work/life balance? Still with us is Lynnette Khalfani-Cox and joining us from L.A. is Wendy Walsh, a psychologist and blogger for MomLogic.com.
Ladies, thank you. Wendy, let me start with you. Fascinating here, taking the first steps to re-enter the workforce. If you've been out a couple of months, it's a little different than being out a couple of years, but what should a woman be thinking of first as she's heading back in?
WENDY WALSH, MOMLOGIC.COM: You know, I'd like to think that you should plan it all along, even if you're going to take a big, you know, 20 percent of women opt out completely for many years until their kids are school age.
So, during that time or even if it is a few months, go online and stay up to speed, get the training you need so that when you come back, you've actually taken a sabbatical to prove your skills. You can get full university educations online now, you can get computer training. It's amazing what's available to moms and the great thing about newborns is they do sleep 16 hours a day, so you've got time.
KHALFANI-COX: And sleep when the baby sleeps, that's what everyone says, right?
ROMANS: Sleeps when the baby sleeps.
Another expert once told me, she says women need to think of it this way, step back, don't step out. It's incredibly important to keep up with your contacts, to keep up with your personal brand, keep up with your network and keep in the game even if you have to be out for a couple of years. How do you make sure that you brand yourself or maybe rebrand yourself when you come back?
KHALFANI-COX: You've got to think about that all important resume if you're looking for a job, certainly, when you get back into the workforce. I tell people, don't try to fudge it, don't try to give some fancy title to what you've been doing, be explicit and direct.
If an employer wants to know what you have been doing for the last two years because they will question why you have that work gap in your resume, be direct and honest about it. I think in the in- person interview the best time to address, perhaps, what you've been doing at home and how that might actually be helpful to the skills that you bring to the table at work.
Maybe you're multitasking, maybe you're a great organizer, maybe you're very logistical, sort of, you know, logically oriented person. And all of that, frankly, comes from being a mom. And I know, you and I know as parents, I've got three, there are some skill sets that get heightened just from having to juggle the capabilities and the duties of being a parent.
ROMANS: And Wendy, you know, I once interviewed a lawyer and was trying to get back into the workforce after being out for 11 years and she told me, look, right on my cover letter I say, point black, you want me to work for you because you need the skills it takes to juggle four children under the age of six. And that got her interviews, you know, I mean, she didn't try to downplay the family connection, she tried to play up the family connection.
WALSH: Think of the customer service skills, being able to calm wining customers or bosses having tantrums, right? They're a cake walk compared to a 2-year-old.
ROMANS: Let's talk about stress and parenting. How do you manage the time management, Wendy? How do you make sure that you can do it all? I mean, one of the things I like to say when women ask me, you know, can do it all, I say you can do it all, but not at the same time. You have different ratios of what is taking precedent at that moment.
WALSH: It's my favorite saying. The truth is, you've to get your village together first. No mother can head back into the workplace without having a village at home and it really does take a village.
Unfortunately, most of the mom villages start forming around preschool. It starts with the baby groups and such, but really at preschool you start see those great networks of mothers who help support each other, do child care pickups, school pickups, whatever's need while you're dealing with some kind of putting out a fire at the office. So that is really important that you have your network.
Now, talk about your work network. The great thing, again, about the Internet, I was pleasantly surprised and my kids are now 11 and seven and I've just really gotten back into full swing in the last year is that when I got on FaceBook and Twitter and learned that social networking world, all my former colleagues had been promoted and now here in positions to hire me.
ROMANS: There you go!
WALSH: I mean, that's the important thing is that you stay in touch with those people using the Internet while you're at home with the greasy ponytail and the pajamas and it's like you're still there.
ROMANS: And peanut butter in your Blackberry, which is my personal favorite.
KHALFANI-COX: I was going to say, that's a reason to stay on LinkedIn to actually be connected to a lot of the working professionals. Like you said, you never know where your next person might be who can actually hire you.
ROMANS: All right, Wendy Walsh, Lynnette Khalfani-Cox, thank you, ladies, for that great insight into whether you should step back, step out, how long to be out and how do you get back in. I've got some pretty strong opinions about kids and computer safety, like I don't think kids should have a computer in their bedroom. It should be in the kitchen, in the living room, and you should be there when they're using it. But hey, I'm just a mom. Up next, our tech expert weighs in on how to protect your kids online.
ROMANS: All right, parents, listen up. Your children are spending nearly 11-1/2 hours a week online. Think about that, 11-1/2 hours. And according to the Norton Online Family Report, 62 percent of children have had a negative online experience. Even more shocking, only 45 percent of parents realize this. Here to keep your kids safe on the Web is tech guru, Mario Armstrong and of course Lynnette Khalfani-Cox joins us as well.
Mario, firs of all, this number shocked me, 11-1/2 hours. I don't do anything except, more than working for 11-1/2 hours. That's a lot of exposure your children are having to other influences that aren't you.
MARIO ARMSTRONG, NPR TECHNOLOGY CONTRIBUTOR: No. You're absolutely right. I mean, when you think about the amount of those hours being used on any one thing, a parent should absolutely know what that child is actually experiencing.
But you know, I do want to put things in perspective. I believe a lot of students and a lot of children out there are a little smarter than some of us may think. I talked to a lot of kids today who absolutely have an idea to some of the signs, not all, but some of the signs of what to look for. And some of them have bailed using other particular social sites that maybe others find very popular for the fact that they want to be more safe and they're being more cautious about them being online.
ROMANS: Mario, that is a really good point, because I look at these statistics and online through the eyes of someone who didn't grow up with a computer in my house. You know? But these kids have been exposed to it from the very -- from day-one.
Lynnette, so how -- Mario has some tips on software and the like to keep you safe. But you and I have kind of a common philosophy. I want to control where the computer is. I want to know what they're looking at. I don't want them in their bedroom by themselves with a computer. I want to be around and know what is happening.
KHALFANI-COX: Right. And my kids are older than yours, of course I have a 12-year-old, a 10-year-old and a 4-year-old and I'm nuts about monitoring this stuff. I've set rules and part of the things that I would recommend to parents just as a, you know, for a practical safety measure, first, learn what's the rules at school.
Because all the schools throughout, any public school throughout the country, they all set guidelines, they have internet safety guidelines. They say what sites the kids can and can't visit. They talk about cyber bullying, what to do if you're a victim of it or you hear about it. They'll tell the kids about things that they can't do, like commercial, you know, trying to sell stuff over the internet or how to respond if somebody who is trying to market something to you.
And, I mean, t the very least, we should know some of these things. In the house, though, you know, I tell my 12-year-old, anything you have electronic online, we have access to. Give us your password, we have the right to monitor it, to screen it, to know it and she's OK with that right now. When she's older, you know, 18 or older, maybe that's a different story. But, I'm sorry, we have to know.
ROMANS: All right, Mario, the first thing to do, you say is you've got to get these privacy softwares, right? And you also say there are some ways where you can take screen shots, random screen shots, of what your kids are looking at. Walk me through these things so I can be cyber spy mom.
ARMSTRONG: OK, certainly. No. 1, I agree totally with Lynnette. One of the things that you can do as a parent is create an Internet parent/child agreement. This agreement enables you guys to have a contract of what you will and won't do online. So, that's No. 1. And you can get that from various Web sites like NetSafety, my Web site, MarioArmstrong, it's on the blog.
The other thing is filtering software has become so much easier for parents to use. So there are free tools like K9WebProtection.com, that's the letter "K" the number "9" webprotection.com. Then there's a ReclaimPrivacy.org. ReclaimPrivacy is specifically used for FaceBook. And what this will do is will enable you to find out exactly where you're kind of vulnerable in terms of your settings and your privacy on FaceBook, which is a great tool.
I know we want to like lock the Internet off and like keep it safe, but what we have to remind ourselves is that we have to raise digital citizens. We have to teach our kids now what it's like to grow up in this digital world. If we keep them away from technology, they won't learn the skill sets and the tools and the mannerisms of being able to deal with scenarios that could come up.
ROMANS: All right, thanks, guys. And thank you for joining us this morning for the show that saves you money. I'll be back this afternoon at 1:00 p.m. Eastern for YOUR MONEY with Ali Velshi, he's going to join me from the road and the CNN Express reporting on the oil disaster in the gulf.
But, right now it's time for a check of your top stories, CNN SATURDAY continues, right now.