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Small Businesses Salary Increases; Debt-Free; Remodeling Contractors; Holiday Travel; Hot Toys

Aired November 13, 2010 - 09:30   ET


STEPHANIE ELAM, CNN NEWS ANCHOR: Who doesn't want to be debt free? Meet a family who was $88,000 in debt and got out of it in three years. What you can learn from them.

It's bargain time for home renovations. But before you sign on the dotted line, how to avoid common pitfalls. And see the hottest toys of 2010, see the "it" toy of the year and get a jump on your holiday shopping. YOUR BOTTOM LINE starts right now.

All right, how about we get you a raise this morning? You might actually have more leverage than you think. Nearly half of employers are worried their top talent may head out of the door when the economy improves. Thirty-one percent of employers said they're willing to negotiate 2011 salary increases with current employees and have plans to leave some negotiating room when extending initial offers to new employees.

So here to help you score some extra cash is Rod Kurtz...

ROD KURTZ, AOL SMALL BUSINESS: Let's get a raise I hope our bosses are watching, right? .

ELAM: Hopefully they are. They should be, right?

KURTZ: Yeah, exactly.

ELAM: And just so that we're clear, the executive editor of AOL Small Business. So Rod, I'm glad you're here because right now it's time to give people an update on the hiring picture. What do you see out there?

KURTZ: Sure, it's interesting you mention, I cover small businesses and a lot of them are starting to hire again and we're hearing, as you saw in the survey, that bosses are realizing as the economy turns the corner and gets a little better, their top talent is going to look elsewhere for jobs...

ELAM: Like Google, right?

KURTZ: Exactly, well Google was in the news, 10 percent raises across the board, I think 23,000 employees and big bonuses. So, companies are doing this because in Google's case they don't want to lose to FaceBook and elsewhere, so they're trying to hold on to people and employers are telling us that, yeah, we're taking a closer look, even with new hires, we're actually leaving negotiating room because we want to potentially give people more money. So, it's a good time to be an employee.

ELAM: So, OK, so it's a good time, but a lot of people think it's still rough out there, so it's not perfect yet, but moving in the right direction. All right, so there is a chance that you can get a raise now when you're going out there. What's a way to make yourself shine and say hey, I'm worthy of this?

KURTZ: Yeah, you have to defiantly demonstrate it and I think an example I would cite is that you want to take on some extra projects before you even get to the negotiating table. Well, you want to make yourself indispensable, not only is it good from a job security standpoint, but when, you know, a month later whatever it may be, you can point to other projects you've done and say, hey, candidly, I've done extra work here, wondering if we can talk about maybe a little more money. It puts your boss in a good frame of mind and they have a positive perception of what you're doing for the company.

ELAM: Oh yeah, that's true. Now, here's the thing, and this is something I think a lot of people struggle with. How do you say how much you think your raise should be? Do you just pick a number out of the sky? How do you get the right number?

KURTZ: You know, one of the fundamental rules of negotiations is you don't want to negotiate with yourself, so if you can, it's like buying a used car. You don't want to throw out a number, let them throw out the first number and see what it is. I mean, you see kind of cost of living and inflation raises usually three, four, five percent, so maybe you want to shoot for something like 10 percent that's going to be substantial. But let the boss do the talking, they may come back with 20 percent, you never know, and then once they put a number on the table you can kind of go back and forth a little bit.

ELAM: But you defiantly want them to put the number out first.

KURTZ: If you can, you know, they may spin it right around, they're the boss after all. And you want to be fair about it. You don't want to throw out a 50 percent raise in a tough economy. It's kind of like the Hippocratic Oath when you're at the negotiating table in this situation, do no harm. You don't want to jeopardize your job by asking for too much.

ELAM: Yeah. OK, that makes sense. All right, so tell me, which one's better? A big bonus or a raise?

KURTZ: Well, it's sort of like the lottery, you can get it year after year in installments or a big lump sum, which is usually a little bit less. So, it's tempting to go after the big bonus. The problem is, it could be a one-time thing. You get the money now, but you may not have it next year. That kind of thing. If you get a raise, you're gradually raising your base salary and that comes back, week after week, year after year. So, I would say if they're both in the ballpark, I would choose to go with the raise versus the bonus as tempting as it may be.

ELAM: Yeah, but if you win the lottery, shouldn't you go with the lump sum? KURTZ: I would.

ELAM: Yeah, OK, me too. All right, let's talk a little bit about...

KURTZ: Forget what I said.

ELAM: Yeah. Let's talk a little bit, though, you're talking about you don't want to out-price yourself, but also is it OK to play hardball in this economy? Or do you want to kind of stay back from that approach?

KURTZ: Yes. You know, we're still looking at almost 10 percent unemployment. So there are people who want jobs and would be happy to take your job. So again, it gets back to you really don't want to play hardball in this situation. I think you have to be realistic about your performance up until this point. You don't want to ask too much, you certainly don't want to threaten to walk away unless you're really committed to doing so, because again, there are people out there who would gladly take your job. So, you have to be careful.

ELAM: So, last thing, if money's out of the question to negotiate for, what's something else you can look at?

KURTZ: You know, we're seeing for even for employers who aren't in a position to give financial raises, they're offering things like extra vacation time, more flexible hours. This kind of stuff, you know, if you have a new baby, if you have kids, this can be very helpful because it's your time is money in many ways, too, and even office perks, things like that, employers are recognizing, again, that people can now move around jobs a little more easily, there are more jobs out there, so they're doing everything they can, even if it's not money to keep people onboard.

ELAM: Rod Kurtz, I hope you just got somebody a raise.

KURTZ: Hopefully myself.

ELAM: All right. Well, from $88,000 in debt to debt-free in three years. Does it sound like a scam? Well, one New York City couple did just that. And Christine Romans has their story.


CHRISTINE ROMANS, CNN NEWS CORRESPONDENT: There are more than a dozen accounts here that you had to close off.



ROMANS (voice-over): Three years ago, Carole and Don Carroll were $88,000 in debt, today they're debt free.

D CARROLL: It wasn't like we went, let's go by a Maserati, all it takes is one little hiccup to start this horrible, horrible snowball effect going downhill. ROMANS: The Carroll's spent every penny and then some on credit cards, gas cards and medical bills even though they had health insurance and then Don lost his job.

(on camera): You were literally near a nervous breakdown over these bills.

C CARROLL: When you can't sleep, it's just -- it's just -- it gets to you.


C CARROLL: And that was the straw that broke the camel's back. I stopped sleeping.

ROMANS: They did not want to file for bankruptcy.

C CARROLL: We made the debt, we should pay for it.

ROMANS (voice-over): A non-profit credit counselor put the Carroll's on a five-year payment plan. They finished in just over three.

GAIL CUNNINGHAM, NATL FOUNDATION OF CREDIT COUNSELING: I think if there is a silver lining to the recession, it is that it has refocused people's attention on their own personal finances. I think they are ready to move back over into the driver's seat.

ROMANS: So how did the Carroll's do it?

D CARROLL: You just have to get organized. I don't know if you really call it having less. It's just not having it immediately. You learn to live with what you need, not with what you want.

ROMANS (on camera): What is your message for people who might see your story and think, wow, I have $40,000, $50,000, $60,000 in credit card debt, I will never get out from under this?

D CARROLL: Never say never.

C CARROLL: It is totally fixable, but you have to -- you have to take the steps to say I need help.


ROMANS: And the Carroll's did, but they couldn't do it alone. They used a non-profit -- a non-profit credit counselor who helped them get on a payment plan. They used every penny of their income to pay their debts. They cut out Broadway shows, dinners out with friends, takeout food, anything non-essential. The bottom line is for everyday items the Carroll's now only buy something if they absolutely need it and have the cash on hand to pay for it.

Carole says she likes the system because waiting for something she really wants makes it much more enjoyable when she actually gets it. The Carroll's recently won "Client of the Year" from the National Foundation for Credit Counseling. But folks, the folks there point out that the Carroll's' case isn't all that typical, frankly. Digging out of $88,000 of debt is a lot, it takes a lot of work.

Four million Americans sought debt counseling from the NFCC last year, the average income was $38,821, the average debt, $27,000, which is nearly 70 percent of total household income. The average number of credit cards in those households 5.7. But you could see that the Carroll's had this vast spreadsheet of all of these open accounts. One after the other, they just chipped away with it and in almost, just under four years...

ELAM: That's pretty quick. If you can think about it.

ROMANS: That's right, but they pumped everything into paying those bills off. And it felt good every time they got to close an account.

ELAM: I'm sure it does. And, of course, it gives people out there a little bit more of an encouragement to say, if you think you can't do, those people out there who...

ROMANS: As Don says, "never say never."

ELAM: Never say never. That's awesome, Christine. Thanks for that.

All right. Still ahead, your holiday get away. How to score the cheapest airfare and even a free hotel upgrade. And home renovations at bargain prices. We'll help you steer clear of the red flags.


ELAM: If you can afford it, the fall and winter may be the best time for a home renovation especially in this economy. With the National Association of Home Builders reporting that remodeling is down, many contractors are light on work and with willing to cut you a deal. But some deals may just be too good to be true. We all know that, right? Well, Lou Manfredini is Ace Hardware's home expert, he joins us from Chicago to help us out here, now.

So Lou, I'm glad you're here, because, you know, you hear a lot about these special one-time offers, but you say that's something to be concerned about, right?

LOU MANFREDINI, ACE HARDWARE: Yeah, I think in any matter, no matter where you live, there are unscrupulous contractors. I mean, we always vie for who's the worst, whether it's lawyers or car salesmen or remodeling contractors, but the fact of the matter is, you want to find a reputable contractor. There are a handful in every market that you want to be able to locate and find. And if they come out with these one-time deals, chances are they don't exist. And you just said it, if it sounds too good to be true, it is.

ELAM: That's just a basic there, right? All right, so let's talk a little bit about this. When you first meet a contractor, what are some of the basics you should look for that right away if you eyeball them you know something may not be right here?

MANFREDINI: Yeah, you want to take a look at simple things, the overall appearance of people that are there. Is it professional? If they're driving a truck or van, is it marked with the name of the company? Where is it located from? If they talk about different work they've done, references, of course, are key.

But one of the most important things when it comes to hiring contractors are third-party endorsements. Find out if they're members of professional organizations. One of the best is the National Association of the Remodeling Industry. It's a lot like the National Home Builders Association, but represents remodelers across the country. And these are true contractors that are motivated and dedicated to doing a really good job and of course the Better Business Bureau and other contractor reporting areas. The thing is, a lot of help online, but there are a lot of people, in particular elderly clients that maybe aren't online and so they don't have access to that information.

ELAM: So, you can easily call and get this information, too. That's good advice. So, here's some of the problem I think some people run into. Once they agree to what's going to happen, the contractor says they need money, but how much money should you give them to cover what they need to do to get the work started? And how much is too much?

MANFREDINI: You know, it's hard. When I started as a remodeling contractor, we had two nickels to rub together and so we always needed some kind of deposit to start things out. But you know what, these days, I think 10 percent, anything more than that is more than you need to give. I mean, if you're in business, if you're reputable, you can get things started, and the key is to have your payment plan set up at different milestones of completion. So say you're going to do a bathroom remodeling job and they say, hey, we need some down payment. I'll give you 10 percent, but then once the place is completely gutted and, you know, all the trash is taken away, I'll give you a little bit more. But at the very end, you want to be left holding about 20 percent so that you can ensure that this contractor can come back. And if they are a true remodeling contractor that knows what they're doing and are in business to do a good job, that's completely reasonable.

ELAM: Lou, as always, thanks so much for breaking it down for us this morning.

MANFREDINI: Take care.

ELAM: All right. Well, don't procrastinate any longer, it is time to book that trip home for the holidays. How and when to get the best deals, we'll have it for you next.


ELAM: So if you haven't booked your holiday travel yet, what exactly are you waiting for? Our good friend Rick Seaney is the CEO of in Dallas. He joins uf now.

ELAM: Rick, at this point, if you haven't booked your holiday travel, is it just too late for you?

RICK SEANEY, FARECOMPARE.COM: Well, it's not too late, but it's going to be an expensively late endeavor, especially for Thanksgiving, so it's a little bit of trouble right now. Christmas you have a few more days, but you need to be out there, no procrastinating this year. Bad year for procrastination.

ELAM: OK, well that's good for people to know. Maybe they'll get them galvanized today to start looking at it. So tell me, when is the best time ,if you are going to book a flight and you just need to find the best thing out there. When's the best time to do that?

SEANEY: Yeah, I think right now for the holidays, you need to be shopping right now and don't procrastinate. I'd rather kind of flip it on its head and say let me tell you the days to avoid. You want to avoid the Sunday and Monday after Thanksgiving and the Sunday and Monday after New Year's. Those are the four busiest days and the four most expensive days. If you can avoid those, that'd be great.

ELAM: So you want to avoid traveling on those days, right?

SEANEY: Absolutely. Traveling will at least be $100 to $150 more per ticket.

ELAM: OK, so that's good to know. Now, what about if you're still in the process of buying your ticket? Is there any day of the week that's better to do it? Or does it not matter?

SEANEY: The perfect -- well, for the holidays, it probably doesn't matter much. If you're traveling outside the holidays, Tuesday at 3:00 p.m. Eastern Time is the perfect time to shop. The reason is pretty simple. Airlines -- one airline, at least, files a sale typically on Monday night all the other airlines scramble in the morning to match. And it hits their airline reservation systems at about Tuesday at 3:00 p.m. Eastern Time. So that's the perfect time with the maximum number of cheap seats.

ELAM: OK, I have tried that one out and I bought a plane ticket to L.A. in a couple of weeks, before the holidays it was $318 round trip. So, I thought that was pretty good, actually.

SEANEY: That's really good.

ELAM: That's really good, right? All right, so I was happy about that. All right, so let's talk about Thanksgiving travel. What's the best way to work in a little deal, maybe if it even comes to your hotel stay?

SEANEY: Yeah. No, I think there's a couple things you can do. One of the tricks that I always use, especially if you're at the of the last minute is be sure to shop for one passenger first, even if there's a party of four. What happens on the airline res system is, even if there's two cheaper seats, if you're shopping for three or four, they actually lift everybody up to the next higher price. So, you might be able to split the ticket purchase up. That's one thing you should do.

The second thing is to check out for packages. A lot of times packages, the air and the hotel, believe it or not, is cheaper than the actual air alone, especially at last minute if you're stuck at the last minute. So, those are the two things I would do, defiantly if you get stuck and you've procrastinated too long.

ELAM: Thanks Rick, so much for the last-minute tips, there.

All right, and how about a free hotel upgrade once you get there? Well, sometimes a late check-in can make all of the difference. The folds at "Travel + Leisure" say the later you check in, the fewer rooms are sold or cancellations happen so you have a better chance of getting an upgrade, especially if you only plan on staying a night or two.

Also, check with your connections, with you credit cards and other membership programs like AAA or AARP which may offer upgrades at select hotels. And finally, I know this is some real basic, simple advice, but be nice. When you're to arrive, try to sweet talk the front desk, let them know it's a special occasion, a birthday, anniversary, whatever the case may be, and see if they're willing to work something out with you. You know, it always pays to be nice, right?

Well, speaking of being nice or naughty, let's talk about holiday gifts. No surprise, money is one of the most wanted gifts this year, according to a "Consumer Reports" holiday shopping poll. But, what are friends and family members really planning on giving you? A peek inside their bags, next.


ELAM: The holiday season is almost here, and if you're got little ones in your life, you know it's not too soon to start shopping for toys. Our Poppy Harlow spoke with CNN Money's Parija Kavilanz about some of the top toys for 2010. Take a look.

POPPY HARLOW, CNN NEWS ANCHOR: I love these. We've had fun playing with them.


HARLOW: They are Sing-A-Ma-Jigs, I keep hearing all about these little guys. These are for 3 and up. How much are they?

KAVILANZ: Sing-A-Ma-Jigs are actually $12.99. and before we get into Sing-A-Ma-Jigs, let me just say, the toys that we have here, what's cool about them, that is all of the toys are under $60. They offer great play for the value and you're going to see some really cool innovations. So, coming back to Sing-A-Ma-Jigs. Yeah, aren't they the cutest toys. They are -- it's just such simple play value. They're plush dolls.

HARLOW: So, they're good for little kids even if they chew on the or whatever.

KAVILANZ: Exactly. They sing, they chatter, they have songs. And the coolest little feature here, if you press these together, they will harmonize with each other. So let's -- there you go, press it one more time. Press this one. There you go.

HARLOW: There you go. All right. Amazing.

KAVILANZ: My daughter loves this toy.

HARLOW: She does, she's two.

KAVILANZ: She's two and she loves it.

HARLOW: All right, so "Twilight," the obsession with "Twilight" movies, there's "Twilight" dolls, now, is that true?

KAVILANZ: Well, you know, Poppy, that the vampire phenomenon has really taken over the nation. Mattel has caught on to that and introduced this new line of dolls, they're called Monster High Dolls. And you know, what is Mattel's iconic doll brand?

HARLOW: Barbie.

KAVILANZ: Exactly. So, it's been a long time since the Mattel has introduces a new doll collection. And the cool thinking, these are the daughters of famous monsters.

HARLOW: Really?

KAVILANZ: You have Frankie Stein, you have Draculara. They have an entire story built around them. They have their own Web site, they have, you know, books. And Mattel has done something cool with the brand, also. They have advertised this product on YouTube. They've kept it very, sort of, under the radar.

HARLOW: Smart.

KAVILANZ: Basically viral advertising.

HARLOW: They've gone viral. Really interesting. All right, who is this?

KAVILANZ: I think that's Frankie Stein.

HARLOW: OK, Frankie Stein. We're going to lay you down because this, this, I know my nephew, Kyle, would die for this Nerf gun.

KAVILANZ: Now, the Nerf gun, this is the dart gun, it is one of Hasbro's most popular products. It's a hot seller every year. Now toy experts tell me that this is the best iteration of the gun so far. It's fully automatic.

HARLOW: Is it expensive?

KAVILANZ: This is about $50. So it's one of the higher priced toys that you're going to find in the market this year. Now, it's fully automaticing, it comes with a shield. It has a clip with six darts. Try it out.

HARLOW: All right. Pete, you ready? We're going to bring Pete, our wonderful stage manager, here. Ready? Are you sure?

KAVILANZ: How did that feel, Poppy?

HARLOW: Yeah, a lot of fun, a little bit heavy, which is good because then they can play with it for too long.

KAVILANZ: Take it away from them, right.

HARLOW: I felt very empowered. Thank you, Pete. Great. It does feel automatic.

KAVILANZ: Exactly. Now, the only criticism I'm hearing about is that it's a little heavy. And that has to do with the fact this has six sized C batteries in it. So maybe for an 8-year-old a little bit heavy, but a lot of fun.

HARLOW: A lot of fun. Heavy which is good because they can't play with it for too long.

KAVILANZ: Take it away from them.

HARLOW: The "it" toy. Let's talks about the Squinkies, finally.

KAVILANZ: You remember last year the "it" toy was the Zhu Zhu Pets Hamsters.

HARLOW: Yes, my 3-year-old, my little nephew, like, niece, runs around on the floor following the Zhu Zhu Pet.

KAVILANZ: And that came out of nowhere. We have the same story this year. This toy is Squinkies, it's by a small company called Blip Toys, came out of nowhere. Again, very simple toys. It reminds you of the toys that you get out of I gumball machine at grocery stores. It's pretty much the same concept. Open it up. It's a soft, squishy toy, that comes in a plastic ball, animals, babies, other fun creatures. And you know, there play sets come with it. There's a cupcake shaped dispenser here, there are treehouses. And they also double as pencil toppers.

HARLOW: Of course. You have to have the coolest pence until class. That's so great.

KAVILANZ: Let's talk about the price, here. I think this is $6.99 for a pack of 16. They're small, they're affordable. And you know they cater to the tendency that kids have to want to collect things.

HARLOW: Why do I see these rolling all around the apartment?

KAVILANZ: Oh, they will roll around everywhere. Yeah, a lot of cleaning up for parents.

HARLOW: All right, these are great, great gift ideas and all, as you said, under $60. Parija, thank you so much.

KAVILANZ: Thank you.

HARLOW: I appreciate it.


ELAM: And now, as promised, for you adults out there, the results of "Consumer Reports" holiday shopping poll. Here what happens going to happen: 68 percent say they're going to give clothing as gifts, 62 percent give out electronics, gift cards work it out for 62 percent, toys for 62 percent as well. No one is ever mad about cash, 58 percent of people planning on giving out the dollars there.

All right, now, I don't know about you, but I've definitely gotten a gift or two that I didn't necessarily love or need like these gloves here that my big brother gave me back in high school. They're electric blue. I grew up in California. We really didn't need gloves. I still have them, I know. And you're wondering why do I still have the gloves? Still sentimental, even though my brother gave me a gift that I didn't really want.

If he sees this, I'll have to explain if he even remembers way back to high school. Anyway, but if you want give some really great gift ideas, money tips, answers to your etiquette questions or even some cool holiday music, just logon to our special report at

All right, that wraps things up for us today. But don't forget to tune in to YOUR MONEY today at 1:00 p.m. Eastern we're talking about something you're really going to want to hear about this holiday season, the future of your food prices. It's time to send it back down to CNN Center for more of CNN SATURDAY and this morning's latest news with my dear friend, T.J. Holmes. Have a good weekend.