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YOUR BOTTOM LINE

The Tiger Mom Controversy; Sports Training for Toddlers; The True Cost of College; Your Home: Rent vs. Buy; Financial Secrets Hurt Many Relationships

Aired January 22, 2011 - 09:30   ET

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


CHRISTINE ROMANS, HOST: At home, admit it, you're a little wary of the swift rise of China, the outsourcing of jobs, the U.S. debt they own, and - and competition for oil means maybe higher gas prices for you.

From a man who'd advised four presidents, why China matters.

(BEGIN VIDEO CLIP)

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I do think it's going to define the 21st century, not just this generation but much of the 21st century.

(END VIDEO CLIP)

ROMANS: But the big culture story this week has nothing to do with President Hu. The star of the week is the Tiger Mom. Landing on the cover of "Time" magazine, the Chinese-American mother who has sparked a national conversation, a national outrage about how Americans parent. The question no one really wants to ask: Are we falling behind, and is what she's saying maybe striking a chord a little bit too close to home?

Jeff Gardere is a clinical psychologist, and Pete Dominick is a regular here on CNN and Sirius XM's POTUS Channel. You got into a big fight with your wife about this.

PETE DOMINICK, CNN CONTRIBUTOR: I did. Listen, I was outraged by this article, like so many people that read it. But this is -

ROMANS: Which part in particular? The part about making her daughter practice piano and -

DOMINICK: When she called her daughter garbage, OK?

ROMANS: (INAUDIBLE).

DOMINICK: And some of the discipline.

ROMANS: You have two girls?

DOMINICK: That bothered me. I have a 6-year-old and - and a 3- year-old, and that - that bothered me. It sparked a real argument between my first generation American wife, who's Italian-American, and myself. I - I thought it was wrong. I thought - and my wife said, you know - we had this long argument -

But here's the thing, without getting too specific, this is the most important article and issue, I think, in - in parenting in America in a long time because it sparks the discussion we're having, the discussion I had with my wife, and you talk about parenting, you talk about - I think there needs to be a balance.

But, I'll tell you, when my - when I woke up the next day, and my kids, after reading that article, I felt different as a parent. I felt -

ROMANS: Me, too.

DOMINICK: My daughter - you did too? My daughter gave me a hard time, my 3-year-old getting out of bed. She started kicking me. I said, "No, you piece of garbage," and I threw her in the snow.

ROMANS: You did not!

DOMINICK: I didn't. I did not, of course. But I did - (INAUDIBLE) you can't take advantage of me -

DR. JEFF GARDERE, CLINICAL PSYCHOLOGIST: But I'll tell you what. But - but I'll tell you what, how many people are out there right now who took piano lessons and didn't take it dragon mom's way, and now they can't play a lick on the piano -

ROMANS: Me.

GARDERE: -- and wish they had a parent who just was unrelenting in getting them to practice for hours?

ROMANS: Well, let's be clear. I want to talk about what that (INAUDIBLE) -

GARDERE: I wish I did.

ROMANS: She - and this is - in this article, which is based on her book, which is "Battle Hymn of A Tiger Mother," a runaway bestseller. You can't even get it in the bookstores because so many - this has struck a chord with so many people - she said she made her young daughter practice the piano, not go to the bathroom, not eat, not get up from the piano bench until she perfected a very complicated piece.

Most of us out there would say - she said she was hoarse from screaming at her daughter.

GARDERE: Yes.

ROMANS: Most of us - in the - in the course of the book, she gets her comeuppance in the end and, you know, she kind of backs off about this kind of - way of parenting.

GARDERE: Sure. Sure. ROMANS: But it has really struck this chord about, wait a minute, at the same time that President Hu is coming to town, on the rise, on the decline. Are American - are we not tough enough? Are we not hungry enough, not eager enough?

GARDERE: I - I think we need to be tougher as parents. There's some real lessons learned from Amy Chua. Not that many, but some lessons learned, and that's about getting our kids to practice, getting them to have higher standards, not always saying when you get a B, oh, that's absolutely terrific, but I think we should say you got a B. Now try harder and try to get towards that A.

And I - and I think that's the real lesson here.

ROMANS: Let's talk about some of the things first. No - no sleepovers, no - no play dates, no birthday parties, you can't a grade less than A, cannot go to a play date, cannot go to a sleepover. These are some of the things - she's -

I want you to listen to what she says in her own words here to CNN about - about this book and her experience as a - as a Tiger Mother.

(BEGIN VIDEO CLIP)

AMY CHUA, AUTHOR, "BATTLE HYMN OF THE TIGER MOTHER": I grew up with extremely strict but also extremely loving Chinese parents, immigrant parents, and, for me, I mean, as a grown up looking back, their having high expectations for me, coupled with love, was really the greatest gift they could give me.

(END VIDEO CLIP)

ROMANS: Are our expectations too low for our kids?

DOMINICK: Yes. Yes.

You know, I think we've been so comfortable, this country - some of us. Some of us.

For generations, for a few - three or four generations, we - we demonized these illegal immigrants that come here. Do you ever watch them work? They don't take breaks. They don't take lunch. They don't sleep. They just work and work and work because they want something. They want more, and that's the same case in a lot of Asian countries as well.

And, yes, we need to discipline our kids more. We need - and I'm - I'm the worst. Well -

(CROSSTALK)

GARDERE: I think - I think we should point out that - that Amy does say, hey, look, it's not just about Chinese parents, it's Jamaican parents, Haitian parents and so on. I was raised (INAUDIBLE) that way - ROMANS: And she says it's really Americans - it's actually very American values that sometimes people have been here for a long time aren't doing.

DOMINICK: But -

ROMANS: Listen up, because the Chinese-American mom's getting all the press this week, but check out this next story. It gives new meaning to the term training your toddler. It's sports training for the diaper set, and, according to the woman you're about to meet, you can never start too soon.

(BEGIN VIDEOTAPE)

DOREEN BOLHUIS, FOUNDER AND PRESIDENT, GYMCO: Hey. You guys ready?

We would not leave academic education to champs and hope that children figure it out. We cannot leave physical literacy education to chance.

ROMANS (voice-over): At Gymco Sports at Grand Rapids, Michigan, Doreen Bolhuis trains tykes, some of them only a few months old, to kick, throw, climb and balance. Bolhuis' goal is to get kids moving earlier than ever before.

BOLHUIS: That's very good balance.

We like to do things that we're good at, so when we teach children how to move well, they're going to keep moving and choose to be active.

ROMANS: Nora Cares is an acolyte. Her now middle school kids have been training since they were two.

NORA CARES, PARENT OF FORMER GYMCO STUDENTS: I think it's set them apart in that they built their confidence a lot sooner than other kids their age.

AVA CARES, FORMER GYMCO STUDENT: I remember, when I was really young, I'd like to go on the balance beams.

GEO CARES, FORMER GYMCO STUDENT: I remember jumping on the trampolines.

ROMANS: But doctors like NYU's Dennis Cardone worry about pushing kids into specialized sports too soon.

DR. DENNIS CARDONE, SPORTS MEDICINE, NYU LANGONE MEDICAL CENTER: Now we are seeing injuries in younger children that we had never seen before. We're seeing overuse injuries which were exclusive to adults, and now we see them in seven and eight year olds.

ROMANS: The government now classifies more than 10 percent of preschool aged children as obese.

UNIDENTIFIED MALE: Swing forward. Atta boy. Land on the blue. Perfect.

ROMANS: Everyone agrees kids need to be more active, it's the how that's the question. There's organic play and then there's specialized sports. Where do you cross the line?

CARDONE: Unstructured activity is - probably will lead to less of these overuse type injuries that we see. It's not until you introduce a parent or a coach into the activity that it leads to these overuse type injuries.

ROMANS: It's one thing to encourage babies to stretch and roll, says psychologists like Wendy Walsh. But toddler sports training is extreme parenting, she says, especially for kids who may not be ready.

WENDY WALSH, BLOGGER, MOMLOGIC.COM: You want to be a good parent? Go to the playground. Climb the monkey bars with your kids. You can get in shape with them. I used to do pull ups on the bars and sit ups in the sandbox, OK? That's what kids need.

ROMANS: The Mayo Clinic includes unstructured physical activity, not training, is what's best for kids up to age five, but tell that to a thriving gym full of two, three and four year olds.

BOLHUIS: I understand that there are skeptics and there are concerns, and every good thing can be done in a harmful way. But the fear of that should not keep us from doing the good things that we know are important for our children.

UNIDENTIFIED MALE: Go for it.

(END VIDEOTAPE)

ROMANS: So the Tiger Mom gets all this grief, but look, I mean, we are pushing our kids younger than ever before. Is this the right thing to do?

GARDERE: Well, I think we've been pushing kids a little bit too long. It's not just with the gyms but also with testing, with getting them academic work and so on too, too early.

I would say here, when - when they talk about what is the dividing line here, if your child does not want to do this after a week or so, the child is just not ready for it.

ROMANS: There you go.

GARDERE: You just let them go. Don't force them to do it.

DOMINICK: Well, I was a - a youth lacrosse and soccer coach, and I was also a personal trainer for kids. I know a little bit about this.

Everything in moderation. You can't get a kid out there doing some physical repetitive motion that's not good for their growing bones and muscles. Moderation. GARDER: That's true.

DOMINICK: But the president and the first lady, they've got it right.

Listen, the - the obesity problem has to do with the crap that we eat, that we feed our kids, and the fact that we don't spend time, as the first lady said, moving.

ROMANS: But you can't just take them to a gym and say, hey, do some specialized sports training. I mean, in a way, busy parents could just say, oh, I've got them in a specialized sports training. Now I'm doing my job.

DOMINICK: Just get moving and eat real food, things that grow in the ground.

GARDERE: Well, keep them away from the computers too much, but, of course, if they're enjoying it - most kids were having fun there. If they're enjoying it, then yes, keep doing it.

DOMINICK: Like did you find (ph) that Wii, the bicycle thing with the Wii -

ROMANS: Oh, yes.

DOMINICK: And my three-year-old beat me, by the way. It's embarrassing.

ROMANS: I've got mine doing the 100-yard dash and there - I have a stopwatch and - no, I'm just kidding.

DOMINICK: The javelin. Have you tried the javelin one?

GARDERE: I think both of you guys are extreme parents, all right?

ROMANS: I know! I know! Extremely -

DOMINICK: One way or the other.

ROMANS: Extremely something. I'm not quite sure.

No, and doctors say that, you know, diet is the most important thing for kids.

DOMINICK: Absolutely.

ROMANS: All right. Gentlemen, thank you so much. Great to see you.

GARDERE: Thank you.

ROMANS: Talk to you again both soon.

GARDERE: All right. ROMANS: Extreme parenting may not be your - be the reason our next guest is thriving, but he did something extreme in his own right. He paid for an outstanding college education without loans, without scholarships, without mooching off his parents. He'll tell you how, next.

(COMMERCIAL BREAK)

ROMANS: Imagine getting a great education without borrowing any money, without taking out loans and without mooching off your parents. This guy did it.

Zac Bissonnette is a senior at UMass Amherst and the author of "Debt-Free U." You wrote a book about the experience.

Most kids end up either mooching off their parents or getting a huge, complicated student loan package and graduate with $20,000-some in student debt. That is not you.

ZAC BISSONNETTE, AUTHOR, DEBT-FREE U: No. That's the absolute worst thing that you can do is your retirement - your parents' retirement. The second worst thing you can do is put yourself into a bunch of debt to pay for college.

ROMANS: Most important thing here is don't go for those rich schools, for those elite schools. I mean, you're just chasing after a dream that you could really - you can be the great kid at the other schools that are going to cost less.

BISSONNETTE: Absolutely, Christine. There was a study out of Princeton that found that students who were accepted into elite colleges but attended less selective colleges actually ended up earning just as much money as students who went to elite colleges. What determines your success in life is who you are, how hard you work, how smart you are, not the name on your diploma.

ROMANS: It's also what you do with it. I mean, one of the things - we talk about the student debt, and I want - I just want to get your perspective on this. We talk about all the student debt the kids graduate with, some $20,000, yet there's this study, this book, actually, this week, that was released that's fascinating, that shows that 45 percent of students after the first two years of college, they don't show any gains of learning, Zac.

So they're paying all this money and they're not really getting very far. And then you look at how kids are spending their time in college - "Academically Adrift" is the name of this book, and it shows that kids spend most time socializing and recreating. I mean, what does that tell us about the value, I guess, we're putting on college and the time? We're paying so much for it.

BISSONNETTE: The first thing it tells you, because I hear this from parents all the time. They say to me, I don't want my kid to work during college because then he wouldn't have time to study.

I mean, look at the results of this survey and "Academically Adrift." About half their time is spent socializing. That's a laughable sort of argument, that your kid needs the time to study.

The average college -

ROMANS: They're not studying.

BISSONNETTE: The average college student is drunk 10.2 hours per week. So if you think that your kids should not work during college -

ROMANS: So they should be working, not being drunk?

BISSONNETTE: Absolutely. And -

ROMANS: You work, right?

BISSONNETTE: I do. Yes.

ROMANS: Right. I did too (ph).

BISSONNETTE: And I say this all the time, like if you're going to go into debt so that you can drink beer and play video games, I don't think that's sane.

ROMANS: So, look, you say that kids should be working, kids should be helping pay for college. What about loans? Avoid loans all together?

BISSONNETTE: Here's the deal, tuition and fees and room and board at the average four-year public college in America runs to $15,500 a year. Most families also get a $2,500 cash credit which brings the cost down to $13,000 a year -

ROMANS: Right.

BISSONNETTE: -- which, if you break that out over the course of the year, it works up to $250 per week, assuming you have no savings. So if you have the kid working and the parents cutting expenses back, not looting retirement -

ROMANS: Right.

BISSONNETTE: -- just skipping lattes and that kind of thing, it's not an insurmountable amount of money to come up with. It's certainly not an amount of money that you need to borrow $20,000 or $30,000 or $40,000 or $50,000 for.

ROMANS: All right, Zac Bissonnette. "Debt-Free U" is the name of the book. Thanks so much.

And, you know, and I met Zac on Facebook and Twitter because we were starting to talk about the same conversations about saving money and how to get ready for college. So, best of luck to you and great to meet you, and thanks for coming on the program. BISSONNETTE: Thanks so much.

ROMANS: Great book. All right, if you or one of your kids is planning to head off to college next fall, the deadline for the free application for student aid, otherwise known as the FAFSA, is looming. Filing deadlines vary by school, but many have a February 1 completion date. Keep in mind, no matter how many schools you apply to, you only have to fill out this form once, so work with the earliest deadline.

The form itself requires about an hour of time, but it could open the door to Pell grants, Stafford loans, Plus loans, and work study programs. Head to FAFSA.ed.gov to get started.

It's easiest to fill out the online form after you've completed your 2010 tax return, because all of that pertinent financial information will be available. But for early deadlines, you can always update later.

Up next, none of us expected this. Existing home sales - home sales - up 12 percent. The American Dream stipulates you should strive to own your home, but could it be actually smarter to rent?

(COMMERCIAL BREAK)

ROMANS: You know, some would say it sounds sort of un-American to suggest owning a home might not be for everybody. But with home values unlikely to make a speedy recovery, when does it make sense to invest in a home and when are you better off simply renting?

Carmen Wong Ulrich is the author of "The Real Cost of Living" and joining us from the CNN Center in Atlanta is my good friend and colleague, Ali Velshi.

You know, Carmen, you said that cost of homeownership only makes sense if you can answer a few key questions. What are the questions people need to be asking about whether buying a house is right for them.

CARMEN WONG ULRICH, AUTHOR, "THE REAL COST OF LIVING": Yes, exactly. Forget about everyone saying this is a buyer's market. It can be a buyer's market for you. Can you stay put - I want you to stay put for at least five years.

ROMANS: Five years.

ULRICH: Five years. Do you have enough money put away in an emergency fund if you buy this home and you lose your job? And this is after the down payments. We know we're saving for the down payment, but you're not going to be able to get that mortgage unless the lenders see that you have a solid emergency saving fund.

And can you manage the tremendous responsibility of owning a home? If the heater breaks, if the toilet breaks, if you need plumbing, all of those things you really have to consider before you buy a home.

ROMANS: You know, my lender - I bought a house last year. My lender also wanted to see if there was six months of expenses - ULRICH: Six months, yes.

ROMANS: -- in that and even for the - for the utilities, you'd to pay ahead for the utilities.

ULRICH: Yes.

ROMANS: Because the utility companies - people are skipping out on the utility bills.

ULRICH: And sometimes the tax bills alone they want you to pay ahead.

ROMANS: You're right.

Ali, you say that this is now the time to buy. I assume you agree that those are the questions you need to answer. Who should be buying?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Yes to everything including the fact that we should stop forgetting - we should forget about this idea that it is part of the American dream to buy a house. Over your - this shoulder where you are, there's a thing that says your number one investment, I want people to understand I think it's a great time to buy a house right now because prices are low and interest rates are down.

I do not thing that you should really be thinking of your primary home as an investment. That's the issue. If you have that $10,000 to put down and you can answer all of Carmen's questions but you're doing it because you think it will be a good investment, forget it. I can get you a better investment in the stock market or anywhere else.

If you answer all of those questions Carmen has put to you and you would like to be at a home and you're going to stay in that home and you've got all the other things, the contingency money, then this is a fabulous time. There may not be a better time to buy a house.

But I think Carmen will agree and you will, too, Christine, that the best time to buy a house for you is when the price is right and you need a house and you can afford the house.

ROMANS: Right.

VELSHI: Forget about the investment.

ULRICH: Absolutely.

ROMANS: It's hard to put a value on a good school district that you need -

VELSHI: Right.

ROMANS: -- or suddenly your kid just turned for and, you know, who cares about the ups and downs of the housing market, you got to get some place where you think you're going to be for the next 10 to 15 years.

VELSHI: Right.

ROMANS: And those are the fundamental reasons why we use to push for homeownership.

Carmen, you have this rule of 15, your rule of thumb to compare renting versus buying. When should you be renting instead? When does it make more financial sense for your family to rent?

ULRICH: Well, it really - it really depends. That's just the start, this rule of 15. It's just a mathematical formula in terms of, you know, adding up the rent over the year and divided by 15 to see if you're getting a good price and if it's cheaper in that market. But, again, that's only just today. That's the price today.

But when you buy a home, this is a huge long-term commitment. So you need to think beyond that. So you just think about what - can I manage being a homeowner? Do I want to stay put like you mentioned in that school district in that place? Will I get a job transfer? Do I have some job security? We all can't say that.

VELSHI: Right.

ULRICH: But, you know, really ask yourselves those questions. For a lot of folks, it makes sense to rent, because as Ali mentioned your money actually works better for you in terms of investment someplace else. So don't think of it that way.

VELSHI: Right. If you don't have a ton of excess money, then - then it makes sense maybe to put it in your house because it will appreciate over time. But the realities don't let the tail wag the dog on the tax - the mortgage interest rate deduction. It's a bad reason to buy a house.

And remember, Christine, what have you and I talked about for years and that is the new mobility of the labor market. The fact is our new reality is that we may live in different places and you may need that flexibility. If you have bought a house, that is one element of flexibility that's taken away. Now, you happen to have three kids in the school system, then you're out of flexibility anyway.

ROMANS: Right.

VELSHI: So you might as well buy the house, if you can afford it. But, you know, look at other countries where they do not encourage homeownership the way we do structurally here in the United States, in Canada, in Australia and Great Britain and Germany. Guess what? Homeownership rates are as high or higher than they are in the United States. So the fact is let the market find itself. If it's right for you, buy the house. But don't do it because someone is pitching you on the idea that it's good. ROMANS: Carmen Wong Ulrich, "The Real Cost of Living" is the book. Fantastic. (INAUDIBLE).

ULRICH: Thank you.

ROMANS: And also Ali Velshi in Atlanta. Thanks, Ali.

Ali, you're going to stick around, because I want know what you think is the most hazardous thing to your love life?

ULRICH: All right.

VELSHI: You want me to answer that?

ROMANS: I want you to answer it.

VELSHI: Oh, probably me.

ULRICH: I want to know.

ROMANS: Well, so far I've managed to control myself, Ali. But I'm going to tell you what the foolproof way is to stay in love.

VELSHI: OK.

ROMANS: That's next.

(COMMERCIAL BREAK)

ROMANS: Love, marriage and money, Ali Velshi. It might seem like a little white lie, hiding a credit card, downplaying your debt to your significant other. Some people - do you know some people even lie just a little bit about how much they make? But too much debt and frequent disagreements about money can be disastrous to your relationship.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): This couple dug out of $80,000 of debt together, this financial adviser schedules financial date nights with her husband, and this student never hides her spending.

BRIANNA STRONG, STUDENT: I'm the spender, he's the moneymaker, but we are very conscious and saving. Especially, in this economy.

ROMANS: Not all couples are so in sync financially. Some bring huge debts into the relationship and hide them. Sometimes savers resent their spouses spending. Sometimes a spouse secretly spends for revenge or independence.

(on camera): If you're doing little white lies about your money, does that show that either you don't trust your spouse or you're worried your spouse wouldn't trust you?

JACQUETTE TIMMONS, AUTHOR, "FINANCIAL INTIMACY": What else then are you not discussing in your relationship?

ROMANS: It's trust.

TIMMONS: It's trust, because it's never just about the money. It's all about what is revealed as a result of that.

ROMANS (voice-over): Revealed in a recent survey, 31 percent of Americans who've combined their finances say they've lied to their spouse about money, 67 percent of those say it caused an argument, 16 percent broke up as a result.

Many of those lies are about debt, a potential marriage destroyer. A research from Utah State University shows thrifty couples are happiest and too much debt can ruin a marriage.

PROF. JEFFREY DEW, FAMILY CONSUMER & HUMAN DEVELOPMENT, UTAH STATE UNIVERSITY: Couples with - with consumer debt tend to fight more. They're more stressed about their money. And some recent research that I've done even shows that consumer debt is associated with divorce.

ROMANS: He says a couple with $10,000 in debt and no savings is about twice as likely to divorce as a couple with $10,000 in savings and no credit card debt.

DEW: When your savings can take the financial pressure off, then couples are able to focus on each other rather than the - rather than the financial problems that they have.

ROMANS: If the debt is unavoidable, then bring plenty of patience and a plan.

TIMMONS: How well do you communicate? Do you have the shared - same shared values? Do you have the same goals?

ROMANS: Communication, after all, is free.

(END VIDEOTAPE)

ROMANS: Ali Velshi, I think the way to start is talking about the state of your own money. That's something you're going to be talking about on your show this afternoon.

VELSHI: Yes.

ROMANS: We'll be taking a look ahead of the State of the Union about, you know, where we are.

VELSHI: Right. And you and I have been sort of money TV spouses (INAUDIBLE).

ROMANS: That's right.

VELSHI: And we don't - we've not agreed on things always about how to handle money. But the concept is do we know each other's philosophy? Do we understand each other's philosophy? And I think you and I have for each other for a long time. And I think that's the issue.

Are you lying because you're trying to deceive the other person? I'm not sure lying about spending is lying about cheating in your relationship. I think sometimes you're lying about your - your spending habits because you're a little bit ashamed of them. It shows a lack of discipline or maybe your other partner is more disciplined. So it's a different issue than - than lying about other things, about where you were.

ROMANS: That's right.

VELSHI: And I think the issue is do you understand each other's philosophy financially, and even if you do, you can behave differently and still get along and understand each other on the money side.

ROMANS: Like we do. You and I have different outlooks -

VELSHI: Right.

ROMANS: -- different points of view about money, but together we make a pretty good team.

VELSHI: Yes.

ROMANS: And I think that a lot of people, savers and spenders can be married and be just fine. The most important thing like everything in marriage is communication.

VELSHI: And ironically, because we communicate so much, our differences over the years have probably come a little closer together because you see where the other person's coming from in terms of the spending.

Just in case anybody is unsure, the two of us are married but to other people.

ROMANS: Yes.

VELSHI: But it is that sort of developing of an understanding of how the other person thinks about money.

ROMANS: That's a nice way to put it, both married to other people.

All right. Ali Velshi, we'll look forward to that later this afternoon. Thanks, Ali.

And that's it for us. We're back same time, same place next Saturday morning for YOUR BOTTOM LINE. Time now to send it back down to Atlanta.