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YOUR MONEY

Second Great Depression; From Owing $88,000 to Living Debt Free in Three Years; Homeownership: From American Dream to Living Nightmare; Health Care Job Explosion; College Money; Mighty Marketing; Can't Buy Me Love

Aired December 26, 2010 - 15:00   ET

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


CHRISTINE ROMANS, HOST: Welcome to this special addition of YOUR MONEY. I'm Christine Romans.

We averted a second Great Depression, but we wait for jobs. The economy is growing, but to slowly. No question this period will be written about in history books, but we're not sure how it will turn out.

So many things are out of your control -- the Fed's stimulus, deficit reduction, job creation, global competition. Over the next hour we will focus on what you can control because smart is the new rich. We live in a time now where there are more people on food stamps in this country than going to college.

I'm joined by comedian Hal Sparks, Ryan Mack, president of Optimum Capital Management and clinical psychologist Jeff Gardere.

Ryan, let's start with you. Has the Great Recession changed us forever?

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: I think it gave us a tremendous smack in the head. Where before I almost acquainted it to almost like a pre and post Barry Bonds. Barry Bonds before the steroids, he was pretty good ball player but after the steroids with the juicing and since then had a lot of home runs and did a lot of things. But our juicing was debit and we got so over whelmed with juicing and debt that we really lost control of what it was like to be without debt. So now we are back to living off our debit card and our credit card use, our saving rates stay between 5 and 6 percent. There was no accident that it was the first time since the Great Depression that it went negative in 2007 since the Great Depression. We're starting to come around now. We're going to go slower and we are going to get out of it. But now we just have to get used to life without the juice, debt.

ROMANS: Talk about the juice, the debit, the asterisk on the American middle class, has the American middle class now with the asterisk are we going to rethink the way we acquire things and the American passion for filling our house with stuff on borrowed money.

JEFF GARDERE, CLINICAL PSYCHOLOGIST: I think that if we don't pay attention to what happened to us in the last couple of years we truly are stupid. And we know that a lot of people feel that Americans are stupid people. I don't think they are. I think that we've learned from it. I think we better change the way that we look at debt. We better change the way we spend and we've got to do better. Even though we're in a recovery and things are getting better, I think that we better continue to tighten our belts, strap on those seat belts. For the next couple of years really try to grow our wealth but do it in a very smart way.

ROMANS: There's no margin for error, frankly. I don't mean to scare people but there really is not a lot of margin for error.

HAL SPARKS, COMEDIAN: Quite frankly that's the way I like it. I work in an insecure business. I've never had the illusion of security that a lot of people counted on. When you get your pension wiped away or ARM adjusted upward or those kinds of things, things you thought you could count on--

ROMANS: So you've been frugal from the very beginning.

SPARKS: I had to be. It used to be called broke now -- in all honesty, I hope we've come through this and grown from this.

ROMANS: Don't have any choice but to grow.

SPARKS: I don't know. Because I think in some degree if you look at the Aids crisis followed by the late '90s into the 2000s of people getting more sexually active again without being safe there's an arc. Where people say the depression wasn't that long ago. It was a generational thing.

ROMANS: True but we averted a second Great Depression.

SPARKS: That is totally true.

ROMANS: That really changed people. Will we be changed like our great-grandparents?

SPARKS: I hope so, and that is what I mean, I think it's up to you. I think you have to make an active choice. Everybody is changed by the decision. It's not how life affects you; it's how you process what's happening.

GARDERE: And I think if you look at folks now we're not going to wait for Social Security. I don't know when I hit my 60s and 70s, whether the Social Security will be there for me. So I can't rely on the government. I have to rely on my own strength.

SPARKS: It will, by the way. It will some variation will be there. But the question is will we be living a lot longer. Like a Harvard longevity group coming up, the human body can last 250 years, the 65 year retirement age starts to sound childish.

GARDERE: Don't tell that to those to folks in France.

MACK: It's hard to teach someone who has never been hungry that you need to save for food. That's just the bottom line. In this generation until 2007 had never experienced what lack was, which our grandparents did.

ROMANS: My grandfather by the way used to always say hunger is the best sauce. We for two generations haven't known that.

MACK: Your book is a timely back because people are willing to listen. They understand what it means to be without. So now they say I don't want to have to go through that again.

GARDERE: You say smartest, you're absolutely right. But the new wealth, as I see it, being able to just pay your bills, having food on the table. No grand illusions. Oh, I want to get that 15-room apartment downtown. You know what, I want to be able to take care of the three rooms uptown and pay the rent on time. That makes me happy, I'm refocused, I've learned the lessons, and I know it's not about the money it is really about the happiness and doing the right things.

SPARKS: I also think, though, being someone who as far as hunger being the best sauce, I grew up underweight and shorter than I should have been when I was a kid because of that specifically, because no school lunch programs where we lived for a long time, those kind of elements.

ROMANS: So you grew up today the way people are worried their families are going to be after the depression?

SPARKS: Yes. There's damage done in that that sometimes is negative to growth long-term to safety, to entrepreneurship. Where people are too afraid to reach out now. What little security they have, they are so protective of it and so scared, that since entrepreneurial growth is what drives this economy in a big way, scare people away from it.

GARDERE: If it doesn't kill you, it makes you stronger. And I think a lot of folks through this recession and now through the recovery realize that there isn't anything that they can't do when it comes to survival that they can be on food stamps and that's OK for a little while. That they can do things that can take them to the next level that perhaps they would never have done before, which is working 14 hours a day. That's OK. That's the new normal.

ROMANS: We want that privilege of being able to work 18 hours a day.

Jeff Gardere, clinical psychologist, thanks you so much. Gentlemen, you're going to stick around because we're going to continue to explore these issues. There's a new saying out there, take this job and tolerate it. Your job drives your personal economy and you can't afford to lose it. How to succeed in the one you have or we'll tell you how to find the one you desperately need. That's next.

(COMMERCIAL BREAK)

ROMANS: If you're like most Americans according to "Consumer Reports," you will spend 15 hours at holiday gathers this season, how about celebrating the season and looking for a job at the very same time. Ellen Gordon Reeves is the author of "Can I wear a nose ring to the interview?"

Ellen, there's networking around the tree, there is networking around the punch. Is it OK and safe to merge these two worlds?

ELLEN GORDON REEVES, AUTHOR, "CAN I WEAR NOSE RING TO THE INTERVIEW:" Absolutely but you've got to behave yourself.

ROMANS: Don't drink too much.

REEVES: Don't drink too much; the first thing is keep that eggnog consumption under control. Because if you're really job hunting as Mark Twain says you never get a second chance to make a first impression. You have to be prepared. You have you to have a business card because when the other people wake up from their holiday revelry, they might not remember meeting you. You want them to have a souvenir of meeting you.

ROMANS: You want their business card to so that you can maybe follow up.

REEVES: So you can follow up. And you have to have your elevator pitch prepared. It has to be short succinct. You have to be able to say apologetically I am job hunting, I want to be an elf, I've trained with Santa Claus himself for 20 years, and I have 20 years experience at the North Pole. Let's talk when it's convenient for you. Remember, it is a holiday party; it is not a career fair, get back to being social.

ROMANS: Frankly, when I talk to people who found their dream job in the midst of all this horrible economic news, it's because they met somebody who they have a mutual friend, a mutual acquaintance. So people are looking as well.

REEVES: You know 80 percent of all jobs at least are filled by personal referral, and over 80 percent exist in what we call the hidden job market, they are never advertised. So you have to be out there.

ROMANS: If you've been out of work a long time. So we got I think 46 percent of the unemployed have been out of work for six months or longer, the long term unemployed, you've been out of the game a long time. This could be a golden opportunity for you.

REEVES: It is and it maybe the time that you feel least likes going out and partying. You can't get your foot in the door. You have to get out of your door, get out of the house, have a new look, feel better, get out there, be in the game. If you've been out of work for six months, once you get over the grief and the anger, and get that out on your friends and family, never on a potential employer. You have got to say here is what I can do for you and here is how I've been spending my time, volunteering, don't mind the gap, mine the gap.

ROMANS: Interesting. I want to talk to you Ryan about something that is really causing a lot of consternation especially when those people have been out of work for six months or longer, they are more likely to have credit problems because they can't pay their bills. We know that hr managers are running credit checks. If you look at, this according to the Society for Human Resources Management, 47 percent of employers say they are doing credit checks on some candidates, 13 percent are doing it on all candidates. Those are more likely to be finance jobs, in charge of the money, and 40 percent are not doing any credit checks at all. But if you've got basically a 50-50 chance of having a credit check, what do you need to know on the job hunting circuit?

MACK: You do have rights. The Fair Credit Reporting Act does dictate in vigil rights that you have. Not all states are doing it, like Oregon, they don't allow credit checks for individuals who are applying for jobs. Just understand that they have different actions. Pre adverse action disclosure statement that they have to give to you if they are going to deny you the job or fire you from a job because of your credit. That consists of your credit report as well as information to say that here is where you can go to try to challenge inaccurate information on your credit report.

ROMANS: I think the most important thing for people on this front is if you are going in and your potential employer says, look, we see a credit issue or we're going to run a credit check, you know you've got a 500 credit score. You get out there in front of it. And you say look I just want you to know, that I had a divorce two years ago as a lot of people as you know probably have but I'm really on solid footing right now and explain exactly what happened. A lot of people are blown out.

SPARKS: A lot of people would actually understand. A lot of times that might appeal to them in some ways. Everybody knows it's a wrecked economy, nobody missed out.

ROMANS: An hr manager very well could be having a foreclosure next door.

SPARKS: He could have a worse credit score than yours. He might go, I'm aware you could take my job. That might be the reason he doesn't want to hire you.

REEVES: They want to know what you are doing about it, because employers want to hire your future, not your past. Hit it head on, explain it.

MACK: A lot are wondering whether it's fair, and I try not to get into that debate as much as what we should try to be doing as preventive measures of making sure that we don't have that 500 fico score.

ROMANS: Fair or not it is happening so you have to make sure that you're moving your score up. We are going to talk more about that Ryan with some of your advice about how to make sure your score is going in the right direction. And how that follows you around, I mean it is the number. More than the age on your driver's license, more than your credit card number, your number the three numbers you have no control over -- although you do have some control over. We will talk about that. Part of that, the credit debt purge. I'm going to introduce you to one couple that paid off $88,000 in debt over three years, hear their story and take our challenge. Could you be debt-free in three?

(COMMERCIAL BREAK)

ROMANS: Ouch. From $88,000 in debt to debt-free in three years. It sounds like a false promise from a television ad, but not for one New York couple.

(BEGIN VIDEO CLIP)

ROMANS (voice over): There are more than a dozen accounts here that you had to close out.

DON CARROLL, PAID OFF $88,000 DEBT: Oh, yes.

ROMANS: Three years ago Carole and Don Carroll were $88,000 in debt and today they are debt-free.

D CARROLL: It wasn't like we went, let's get a Maserati. All it takes is one little hiccup to start this 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, then Don lost his job.

You were literally near a nervous breakdown over these bills.

CAROLE CARROLL, PAID OFF $88,000 DEBT: When you can't sleep, it gets to you. 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: A nonprofit credit counselor put the Carrolls on a five- year payment plan. They finished in just over three.

GAIL CUNNINGHAM, NATIONAL FOUNDATION FOR CREDIT COUNSELING: 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 Carrolls 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: What is your message for people who might see your story and think, wow, I have 40, 50, $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.

(END VIDEO CLIP)

ROMANS: The Carrolls couldn't do it alone they used a nonprofit credit counselor. Every penny of their income went to pay their debt. The bottom line is for everyday items the Carrolls now only buy something if they absolutely need it and they have the cash on hand to pay for it.

Personal finance expert Lynnette Khalfani-Cox is the author of "Perfect Credit."

Lynette, we both agree that debt is like losing weight. It really is, it's easy to say you get out of debt by paying more on your debts than you're bringing in every month. But it's like the same thing as losing weight, it is easy to say eat less and exercise more but we still have a problem.

LYNNETTE KHALFANI-COX, PERSONAL FINANCE AUTHOR: So many people have a problem I mean look at the debt statistics in this country. We know that debt has become more of a problem not less of a problem. So just saying pay of those debts or don't charge so much, it just doesn't work like that, especially now during the holiday shopping season. So many people are going to be racking up even more debt. So this is very timely topic.

ROMANS: One interesting thing I asked the Carroll's how they paid off the credit card debt, how they prioritized, they paid the highest balance first. You hear that from personal finance experts, if you you've got high balance credit card debt, pay that off first and you'll save interest.

KHALFANI-COX: High interest rate.

ROMANS: But it's not always that simple. Sometimes you need to kick the card off the list just for the psychological boost. Tell me about that?

KHALFANI-COX: Absolutely right. This drives me nuts. Because frankly about 99 percent of all financial experts tell consumers pay off your high interest rate debt first. The problem I have with this strategy is that first of all it doesn't work for everybody. Secondly not everybody is actually bothered by having high interest rates.

Really the problem for some people is they have a wallet full of credit cards so they need to actually attack their area of pain. If you've got too many credit cards, pay off those with the lowest dollar balances first. You've got 12 credit cards, some have $200, $400, maybe $800 balances, and you knock those cards out first. It will give you that psychological boost to keep going. The motivation is what keeps you going. It's disheartening when you pay off high interest rate credit card debt and you barely see the balances budge. Those people don't stick with the plan. SPARKS: A lot of times, a lot of debt accumulation is caused by confusion; you are just shuffling money to pay for things. Eliminating some cards makes it simpler to deal with you're going much quick from 12 or eight cards to four cards or three cards. Then you're like I have the big two to cover and I'm good.

ROMANS: They are different strategies. Basically what we are talking about here is you pay off the high-interest card, you pay off the card with the lowest balance, which is something Lynette thinks is a good idea or you pay off the highest balance credit card. If you do that you could be losing access to credit which could be a problem if you get yourself stuck and you need to use that money.

KHALFANI-COX: But here is the tradeoff. If you pay off the cards with the highest dollar balance first, chances are you've already taken a hit on your credit score. Because having high credit utilization rate, using up a high percentage of credit that you have available is already hurting your fico credit score. So if you start to pay those high dollar balances down, is it possible that some creditors might start chasing down your credit line as they call it. Yes it is possible they might reduce your credit line. But frankly we're two and a half years into the credit crunch, if they were going to lower your credit limit; they probably would have already done it by now.

ROMANS: The book is "Perfect Credit." Thank you so much, nice to talk to you as always.

What is a better investment, adding in a new wood deck, a new master bathroom, a home office renovation, or a new front door? The answer plus, whether home prices will rise next year. That's next.

(COMMERCIAL BREAK)

ROMANS: Every hour last year, 322 people lost their home. This year more than 6 million people have simply stopped paying their mortgage. For those of you still in your home making payments, the foreclosure crisis has turned the American dream into a nightmare, because your property value has been going down, pretty much straight down since 2007.

Mark Zandi is chief economist from Moodyeconomy.com.

Mark, have home prices stopped falling?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S: No. They are still falling. They are down just over 40 percent from their peak which was five years ago. In many parts of the country, they are still declining.

ROMANS: They are going to keep declining? Are there places we are going to see the pain, the nightmare at least stop for now. Most people out there are making their mortgage payments. Most people want to see the foreclosure crisis over so they can start moving again for new jobs, for whatever reason in their community. It feels like we've been frozen in time here. ZANDI: Yes, I think another six, twelve months of price declines in many parts of the country because we still have a lot of foreclosed property that has to go through the process to a distressed sale, which keeps prices down. I think it will be another six, 12 months before we see the true bottom in national house prices. Some parts of the country will do better. On average across the country more price declines.

ROMANS: Parts of the Pacific Northwest is starting to stabilize, there are actually prices rising in parts of California where Hal lives. Not Hal's house in particular. Maybe Hal's house in particular I'm not sure.

SPARKS: My house in particular, thank you very much, smart decision to make. A lot this has to do with that development during a rush. We were talking during the break about how we're living on Twinkies, extra sugar; mortgages are really high based on nothing. Then you have to go to eat fruit. It's sensible, healthy, and tasty but after that diet it seems ridiculous. House prices are actually normal now; they are actually going back to their sort of correcting.

ROMANS: If they continue to fall for six, 12 months, it might be the case, maybe they are not quite normal yet. Let me ask a question a lot of homeowners, people who are paying their bills on time are very concerned about. When you start talking about deficit reduction and the moves in Washington to balance our books as a nation, you hear people talk about pulling back on that mortgage tax credit. Do you think that's likely?

ZANDI: I think eventually, yes. Not the next year, not the year after or not even the year after that. If you told me 10 years from now the mortgage interest reduction has been scaled back I wouldn't be surprised. Right now a deduction on a second home that will probably go away. You can get a deduction on a home equity line of credit. That will probably go away. There's no limit. There will be some limit on the size of mortgages that can qualify for mortgage interest deductions. You can have one but smaller.

ROMANS: I think what they are talking about right now in Washington, for very rich people with mortgages that cost $500,000, also for a second home, and you are right for home equity line of credit. But of course no decisions have been made yet on balancing America's books and where housing will fit into that.

Ryan Mack, 30 year fixed rate loans are cheaper than they have ever been. Those interest rates are so low. Fantastic.

MACK: Right.

ROMANS: If you can get a loan and you're not afraid of home prices, they're going to continue to fall for six to 12 months if Mark Zandi is right. What does a smart buyer need right now, Ryan?

MACK: Well, a smart buyer needs patience more than anything else. We need to understand that more than market conditions, your own personal financial situation should determine exactly if you're ready to buy a home. I mean, so many individuals, they look at the market. They figure out the people next door, they bought a home. Well, you know, I need to buy a home because they bought a home. Well, that's not the right time to buy a home.

You have to look at your - look at your FICO scores at 750 or higher so you can get the best rates. Have you acted as if you've been buying a home regularly? A lot of individuals, if you're renting, you're paying $800 a month, that mortgage is $1,200 a month. Start putting $400 a month into a savings account so you're acting as if you're paying for that mortgage.

But don't forget you have more than just the mortgage to pay for. You've got gas. You've got maintenance. You've got property taxes. You've got a lot of upkeep around the property. Start looking around and seeing what your landlord is doing around their household to figure out exactly what sort of additional expenses, and start acting as if you're paying those expenses yourself and really getting yourself into that next - I mean, take 9 or 12 months of time. If it takes you a year in order to get that 20 percent down, that's fine. Take that year. Make sure you can get that 20 percent down. Avoid the PMI (ph) payments and do it responsibly.

ROMANS: Before the break, we gave a little quiz, Mark Zandi. We gave a quiz about what is the best return on your dollar. Is it adding a home office? Is it adding a wood deck? Is it a bathroom remodel? Or is it a front door?

And the answer is a front door. Anything with curb appeal is the thing that you get most of your money out right now. And, in fact, the return on renovating has been declining for the past five years, along - right along, Mark, with the declining housing market. Only 60 percent of your remodeling costs in 2010 would be recouped by home owners.

The message here is if you're living in your house and you're spending money to fix up your house, you got to live it in a long time. You got to love your house and love what you're doing, right, Mark, because the housing market is not healthy quite yet.

ZANDI: Well, I think even in the best of times, you - it would be unusual for you to recoup all of the dollars you would put into your home.

ROMANS: That's right.

ZANDI: Right? So now it wouldn't be surprising when house prices are down and falling, that you'd recoup even less. So if you're going to make an investment in your home, I don't think I would do it based on investment returns, I'd do it because it'll make my living easier.

SPARKS: Livability, yes.

ROMANS: If you're trying to sell that house and you need to fix it up, keep in good mind the Viking stove is probably not going to get you the return that the steel front door will. SPARKS: Right. But - and that's actually not going to happen any time soon. Don't try to sell your house because prices are actually, over the next whatever, six months are actually going to go down kind of significantly.

ROMANS: All right.

SPARKS: -- because it's -- yes. I think.

ROMANS: Says Hal Sparks, comedian and economist for the housing market.

SPARKS: Yes. Right. Who has a house! With curb appeal!

ROMANS: All right. Mark Zandi, thank you so much.

ZANDI: Thank you.

ROMANS: Moodyseconomy.com. Gentlemen, stick around because forget the fight over health care reform, how to get a job - how to get a job today in the fastest-growing part of the American economy.

(COMMERCIAL BREAK)

ROMANS: Health care is the fastest growing part of the economy. It's also the fastest growing segment of the jobs market. Even as the labor markets were melting down for almost two years, health care jobs were added month after month. But not all health care jobs are created equal.

(BEGIN VIDEOTAPE)

TANNEKE BURNS, STUDENT, BUNKER HILL COMMUNITY COLLEGE: Are you OK?

ROMANS (voice-over): Tanneke Burns enjoys her job -

BURNS: Relax your hand for me.

ROMANS: -- drawing blood for a Boston-area blood bank. But over the past couple of years, she's watched her hours shrink. Seven or eight-hour blood drives now last just five.

BURNS: I've always been told that as long as you have a job in health care, you're pretty much set.

ROMANS: So Tanneke, a mother of five, is pursuing a more secure career in nursing. She goes to class at night and works during the day.

BURNS: I don't consider myself to be a risk taker, but I guess on some level, this is.

ROMANS: A risk that will likely pay off. The population is aging, and an estimated 50 million Americans enter the health care system when reform kicks in in 2014. ANDREW RUBIN, NYU MEDICAL CENTER, HOST, SIRIUS HEALTHCARE CONNECT: They're going to need hospitals and doctors and nurses to take care of them. Demand for health care services equals demand for good jobs.

ROMANS (on camera): Where are the jobs in health care? It's not just nursing. It's all up and down the spectrum now.

RUBIN: It's up and down the spectrum. It's a big field. Any health care profession is a big field, and you have all levels of people within there. And the jobs, quite frankly, are going to be found in all those levels.

ROMANS (voice-over): There's already a shortage of health care IT professionals, medical coders and medical assistants. The government estimates hundreds of thousands of home health aides and personal aides will be needed over the next decade. Often those jobs come with on-the-job training but low pay. Median wages for registered nurses, however, is $66,530.

Tanneke Burns is hopeful. There will be student loans to pay off, but she's confident she's made the right choice.

BURNS: I always told my children, you need to go to school and get an education, but I felt like if I haven't gone to college, how can I expect them to do it? How can I expect them to do something I haven't done myself?

(END VIDEOTAPE)

ROMANS: So here's where the health care jobs are. The Bureau of Labor Statistics estimates there'll be more than a half a million jobs created in nursing by the year 2018. Of course, going back to school isn't for everyone, like it was for Tanneke Burns. But the BLS also projects an explosion of new jobs for home health aides, personal care aids, those have no medical experience or training really necessary, or minimal training.

Andrew Rubin is VP of clinical affairs at NYU Langone Medical Center and the host of Sirius XM Doctor Radio. Andrew, it's critical, I say, to get a so-called ladder job if you're going to go into it. You know, go into nursing, do the two years of training to be an RN, I think. Then you can move above with more training, more education, more degrees to get even higher-paying jobs. Some of these jobs pay well into the hundreds of thousands of dollars. If you're on the lower end, though, sometimes there's not a lot of room for movement.

RUBIN: That's true. But as - you know, as you say, not all jobs are created equal. So you have to kind of decide what your career ambitions are. You know, a lot of people don't want to -

ROMANS: And your skills.

RUBIN: And your skills. And they don't want to interact with patients. But that doesn't mean there's not a lot of jobs out there.

ROMANS: Like what?

RUBIN: Well, there's, you know, med billing, insurance billing. There are a lot of jobs in insurance, yes.

ROMANS: Calling me about the insurance billing. Calling me again about the insurance billing.

RUBIN: Medical coders, administrators like myself, you know, my day job. There are lots of jobs. And depending on what you want to do, you just have to target your career into that.

ROMANS: I think most people would like to grow old and be healthy and live in a nursing home. We know there are a lot of jobs --

SPARKS: Especially the last part.

ROMANS: You know, as we're - right. As we're -

SPARKS: Sweet.

ROMANS: You know, in fact, on his weekends, he goes and he checks in just for fun (ph).

SPARKS: Totally. Just - well, (INAUDIBLE) in those places. My mom's a nurse.

ROMANS: And the comedy. He gets most of his comedy from nursing homes.

SPARKS: My mom's a nurse, and now for years has worked in home health administrative services for the State of Kentucky, and - and she did - she had, quote-unquote, a "ladder job" -

ROMANS: Right.

SPARKS: -- in that area. But it took a very long time. She worked at a private doctor's office for years, and then there was a transition of having a hard time finding -

ROMANS: Right.

SPARKS: -- a nursing job for a while. So it's a secure job because it can't be outsourced.

ROMANS: Right. Although we are seeing in some urban areas - and you and I have talked about this before - you're seeing hospitals close. So - I get e-mails from people say, you keep talking about nursing and health care jobs, but they're closing the health care in our neighborhood. Overall, you're going to see an explosion of health care jobs. It might just not be where the hospital has closed.

RUBIN: Mobility - and mobility is key. So what happens in New York City may not be the case in Kentucky.

SPARKS: Exactly. ROMANS: I want to talk about it from the point of view of a patient. We've talked about health care reform, or health care and the explosion of health care from the point of view of getting a job. But as a patient, look at the cost, health care costs. I don't think that most people would understand that a nice private room is going to cost you today $79,900 for a year. Go down this list here. You can see how expensive it is - assisted living $37,572.

Andrew, I don't think we're saving enough. I don't think we're saving enough because these numbers are going up several percentage points every single year.

RUBIN: You know, we talk about this with any segment that we do. Plan ahead. You have to prepare for the future, whether it's, you know, choosing your insurance for next year or planning what happens when you turn 65, 75, 85. Start saving today. And there are a lot of ways you can actually do that.

ROMANS: Talk to me a little bit about health care reform. In health care reform, there's something that you keep talking to me is so exciting. It's called the Class Act. And I have a lot about this in my book, but you can also - you can Google this, as well. It was a Ted Kennedy dream provision that made it into health care reform.

RUBIN: So essentially - and I get the - you know, the letters wrong. But it essentially allows employees to enroll. And you have to actually voluntarily - you're automatically enrolled, and then you get opted out. But you essentially pay into this program for five years. And then after five years, if you need money for non-medical expenses -

ROMANS: In long-term care.

RUBIN: -- long-term care or any medical - any expenses associated with your health care, should you -- that are not, you know, medically oriented, you can tap into this fund up to $50 a day. And it's a great savings plan. It's controversial because it's another entitlement program.

ROMANS: Right.

RUBIN: It's intended to be self-funded. We'll see how it actually plays out because the rules haven't been written yet.

SPARKS: The issue with this is that it's going to become more and more necessary because the Baby Boomer generation's going to be the first one to really hang onto their youth as long as possible, and then they're going to hang onto their old age as long as possible. We're going to - it's going to - people are entering in - what are there, 28 months on an average person is in -

ROMANS: Yes.

SPARKS: -- is in a --

ROMANS: Twenty-eight. Well, when you check - SPARKS: -- assisted living --

ROMANS: -- in some places, assisted living or to the nursing home, I mean, you're talking most people are there a couple years.

SPARKS: My grandmother has been there for - in one for, I think, seven years now. She's not going anywhere anytime soon, bless her sweet heart. So --

ROMANS: And the money's coming out of her pocket.

SPARKS: It will be a -

ROMANS: Every second!

SPARKS: Well, or my mom and my uncle and my aunt.

ROMANS: Right. Right.

SPARKS: And - and it's - and she's going to be there a full total maybe 11 years. And she's an outlier in her age group. In the Baby Boomer generation, it's not going to be.

ROMANS: Right.

SPARKS: And you're going to find --

RUBIN: Absolutely right.

SPARKS: -- much, much bigger expense.

ROMANS: So the job opportunities taking care of this aging population, but it also --

RUBIN: Absolutely.

ROMANS: We all need to be thinking about how we're going to take care of ourselves because we are (INAUDIBLE).

RUBIN: And one important point to make because we talk about health savings accounts --

ROMANS: Yes.

RUBIN: -- all the time. These are, you know, tax-free accounts that you can put money into for your health care long term.

ROMANS: Right.

RUBIN: You can use them for long-term care expenses.

ROMANS: Oh, good point.

RUBIN: So if you put money in and roll over, and you will be able to use it.

ROMANS: All right. Andrew Rubin, thank you so much.

There's only so much money to go around. So do you put off your retirement savings to put your kids through college? The answer will surprise you, next.

(COMMERCIAL BREAK)

ROMANS: It's never been more important to get the right education in the right field. For the class of 2010, smart students in the so-called STEM fields have the richest prospects. STEM stands for science, technology, engineering and math, and they dominate the list of best paid majors. Best paid majors including petroleum engineering, chemical engineering, mining and mineral engineering, computer science, computer engineering - you get the picture.

Mark Kantrowitz, the publisher of Fastweb.com and FinAid.org. Mark, you say students if they're - if they're taking on loans to pay for college, they really need to choose carefully here because you're going to end up with an awful lot of debt that you're going to pay off.

MARK KANTROWITZ, PUBLISHER, FINAID.COM: That's right. And your income after graduation dictates how much debt you can take on to pay for that education. As a good rule of thumb, you should borrow no more than your expected starting salary after you graduate.

ROMANS: So if you're a petroleum engineering major, you can take on $80,000 in debt if you need to. If you're a music major, you should not be graduating with $80,000 in debt because you are going to really be hurting to pay that off.

KANTROWITZ: That's right. And if you're going to pursue your dreams in art you should try to minimize your debt, so that you don't graduate with too much debt, more debt than you can afford to pay.

ROMANS: Ryan, this is a softball for you. If you're a parent, do you save first for your kids college or you save for your retirement? And I already know what you're going to say.

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Obviously, you know, there's a scholarship for individuals to go to school, but there's no scholarship for retirement. So we have to understand that we have less amount of time once we get older in our golden years so we should spend that time trying to invest in your - well, for your child's school. Well, it's great to invest in your child's school education. Don't get me wrong.

However, your retirement, you got to put your gas mask on yourself before you invest in - put it on the baby. So this is what we have to understand that we have to - we have to do. And there's a lot of great ways to do it. The 529 plan is a great way to do it.

ROMANS: Yes.

MACK: We put money - this is a tax-free - and tax-free. And when you put your money in, you get your great tax deduction, and it's tax-free you put it out as long as it put towards education.

A lot of - a lot of mistakes that individuals make, a lot of times, individuals will try to give gifts to their children and sometimes that money is counted more if the child owns it in their possession against their financial aid packages than if you hold it for yourself. So - and grandparents, great time to give gifts away. You can - medical bills and college expenses, you can give these things and not under your gift allotment to make sure you give (INAUDIBLE).

ROMANS: This is why Ryan does a brisk business because everyone's trying to figure out how to do it and do the best thing for your family.

MACK: Right.

ROMANS: And I think, Ryan, the bottom line is you'd like to be able to do both. You'd like to be investing for your retirement and your kids' college education. But for a lot of families, that simply isn't possible.

You know, Mark, you have three rules of thumb that I quoted in my book, three things that people, I think, can take away right now and remember if they have a kid or a grandkid or they're in college. Always borrow federal first. Never borrow more money than you expect to earn in your first year working. And live like a monk in college so you don't have to when you're paying it off.

KANTROWITZ: Yes.

ROMANS: Your best advice. I mean, I think those days of kids getting student loans and going on spring break - they must be over, right? I mean, this is a whole new world, Mark!

SPARKS: What kind of - what kind of monk, though? Are you kedging (ph) your own wine?

KANTROWITZ: Well, and the reality is, every dollar you spend using student loan money is going to cost you $2 by the time you pay it back.

ROMANS: Wait. Say that again. I want people to really remember that. So everyone out there with a kid in college, listen up. Say this one more time.

KANTROWITZ: Every dollar you spend using student loan money is going to cost you $2 by the time you pay it back.

ROMANS: All right, Mark Kantrowitz, FinWeb.org, thank you so much for joining us. You two are going to stick around so that we can - can deal with this next segment. I can't wait for both of your takes on this.

OK, opposites attract, but when they have opposite money habits, it can be hazardous to your relationship. Find out which money trait makes you more likely to stay in love. That's next. But first, succeeding as a small business with a mix of innovative products and successful viral marketing.

(BEGIN VIDEOTAPE)

TERRENCE KELLEMAN, FOUNDER, DYNOMIGHTY DESIGN: Hi. Welcome to Dynomighty.

Dynomighty's actually my company. I started it eight years ago. It was - the whole concept for Dynomighty evolved out of a product, essentially, that I had found by rummaging through the garbage, of all things. But what I was doing was working at the Museum of Modern Art at the time, and I stumbled upon - literally stumbled upon the idea for this magnetic bracelet. So it took me a year to invent this product, and then I started selling it at the Museum of Modern Art. And eight years later, here we are.

Based on the success of the jewelry, I did other organizers in magnets. This is actually called the Desktop desk organizer. It's all magnetic beads that hold your business cards together, or you can use it for your pictures or whatever.

And then we had our YouTube success, which really changed and redefined the business entirely. And I did all these tricks and put them on a video on YouTube that lasted about a minute. And within a month, we were a featured video on YouTube, and we had just an enormous response. And within the space of three months, we had sold $130,000 worth of jewelry. Now, we have almost 140 videos on line and YouTube is our number one referrer, beyond all other referrers.

To have a dream from, you know, the point in which I was working on my day job 9:00 to 5:00, to have an idea for a product and to bring that to fruition. And now, eight years later, have a company that our biggest problem is our rapid success - I mean, that's the thing I'm most proud of.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROMANS: Thrifty couples are happiest and too much debt can ruin a marriage. Consumer debt is an equal opportunity marriage destroyer. It doesn't matter where you live or how much money you make, too much debt strains a marriage.

Jeffrey Dew is an assistant professor of family, consumer and human development at Utah State University. He researches money and couples. And Jeff, I'm quoting you here. Your - your study, your research has shown that consumer debt is really, really dangerous to your love life.

JEFFREY DEW, ASST. PROFESSOR, UTAH STATE UNIVERSITY: Yes, consumer debt is definitely a problem for married couples and also cohabiting couples.

ROMANS: You know, according to the Marriage Project at the University of Virginia, couples who disagree about money once a week 30 percent more likely to divorce than couples who fight less often. So think about it, everybody. How often do you fight with your spouse about money? Is it - is it more than once a week? Because your chances of going down the wrong path are right up there. What makes thrifty couples happier, Jeff, than everybody else?

DEW: Well, I think you really said it at the beginning there. Thrifty couples are simply not accumulating consumer debt. And when we say consumer debt, we're talking about credit card debt, or, you know, maybe the installment loan on your furniture from the - from the furniture store. But the studies that I've conducted show that couples the more consumer debt couples have, the less happy they are in their relationships and the more - the more they fight over money. I think -

ROMANS: And it doesn't matter how much money they make, right? It doesn't matter - I mean, you can be living right on the poverty line, but if you're not racking up debt, you're in a happier situation than couples who maybe have more money, maybe are middle class or solidly upper middle class, but they've been living beyond their means.

DEW: That's right. Those couples who live within their means tend to be happier and fight less than those who are - who are not. And it really doesn't matter how big or small your means are. I think our expenses really rise with our income, and so - so we just have to manage those and make sure that we are not spending more than we're making.

ROMANS: Ryan, you probably - you sit down with a couple and you're trying to give them, like, a diagnosis.

MACK: Like a counselor.

ROMANS: OK, why are you spending so much? And you got to - you got to let go of the pocketbook a little bit! Geez, you know?

MACK: I've seen a lot of individuals in front of me go at it tooth and nail over differences --

ROMANS: Over money.

MACK: -- with money. Over money. Well, essentially because it's the surprises. It's that, I didn't know that you had that additional bank account. I didn't know that you felt this way.

SPARKS: I didn't know you had a secret apartment across town with someone else living in it. I didn't know that car parked on the driveway was a private investigator. I didn't realize we were both paying out of our joint account for the private investigator I've had following you!

MACK: And this - and this - it's no surprise that always end up being the biggest - and so I always say, listen, give yourselves two hours a month. One hour every two weeks, get up before the kids and just talk about your individual goals and your couple goals. How are you doing with the individual goals? Can I support you in any way? How are we doing with our couple goals as a household? Can we support each other? What can we do to make move ourselves forward? And then go through an estate planning. But I think getting your estate planned is actually a good counseling tip for individuals to -

ROMANS: Really.

MACK: -- for couples to make sure that --

ROMANS: You have to decide - you have to decide priorities and figure out what's coming in the door. Even a budget can be a good way of figuring out --

MACK: Yes.

ROMANS: -- you know, what your priorities are.

SPARKS: It's always hard, though, when you tack it to your mortality. That's the issue. It's, like, don't - the estate planning or even, you know, preparing for end of life care, it's like, people run from that more than anything else. You got to --

ROMANS: It's true.

SPARKS: -- make it fun. That's my advice.

ROMANS: Right. Hal Sparks, comedian Hal Sparks, who can make money and the lack of it very funny. Thank you, sir. Also, Ryan Mack from Optimum Capital Management, Jeff Dew, marriage researcher, who gives us lots of food for thought about paying down your debt, and you will live happily ever after. Thanks to all of you.

Hal's stand-up DVD, "Charmageddon," is now available on Amazon.com, makes a delightful gift for the holidays. He also wrote the very funny foreword to my new book, "Smart Is the New Rich," the book that's the basis for this special edition of YOUR MONEY.

Join me on Facebook and Twitter - oh, there you go - mutual plugging! Join me on Facebook and Twitter for a running conversation about the book and about all the money matters that we talk about here with Ali on YOUR MONEY every Saturday, 1:00 PM Eastern, Sundays at 3:00.

Make sure you join me on Saturday mornings, 9:30 Eastern for "YOUR BOTTOM LINE."

Have a great weekend, everybody.