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CNN LARRY KING LIVE

Controversy and the Octuplet Mom; Suze Orman Answers Questions

Aired February 16, 2009 - 21:00   ET

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


LARRY KING, HOST: Tonight, controversy and the octuplet mom.

Why did Nadya Suleman's team decide it was too risky to represent her?

And then, President Obama is set to sign that $787 billion stimulus plan.

What does it mean for your bottom line?

Suze Orman is here with an action plan for surviving these tough times. Find out the money mistakes you can't afford to make and how to protect your hard-earned cash.

Suze Orman is going to take your calls, next on LARRY KING LIVE.

Good evening.

Welcome to another edition of LARRY KING LIVE.

One reminder, Bill Clinton from Arkansas tomorrow night for the full hour.

We begin with Joanne Killeen, the president of the Killeen Furtney Group. They're the Los Angeles-based public relations firm that did for the octuplet mom, Nadya Suleman.

When you did this show February 3, you were representing her. Now you're not.

Why not?

JOANN KILLEEN, STOPPED REPRESENTING OCTUPLET MOM BECAUSE OF DEATH THREATS: Well, Larry, the number of death threats that came into our office, both by e-mail and voice mail, we had to make a decision about what was in the best interests of our own personal safety and that of our firm.

So we met with the police department on Friday. We filed a criminal report. We provided them with all the information with all the threats. And they told us that we should take this very seriously.

KING: Why you and not her?

KILLEEN: Well, they've also threatened her. But the majority of the threats are coming to our office. I mean, Nadya doesn't have an e- mail account. She doesn't have a computer. So there's no way to reach her.

So the closest thing they can do is come after me. And they have -- and just in painful, painful ways.

KING: How would do you characterize the nature of the threats?

KILLEEN: Well, they've said to me that I should be put down like an old dog, I should be paralyzed, my client's uterus should be ripped out, she should be put on an island. I mean, Larry, I don't know what's happened with America, but they are really, really angry and letting me know what they think about this issue.

KING: Do you take special security precautions?

KILLEEN: Yes, I do. Yes, I do. We have extra patrols on our street. We've got biller patrol (ph). We're very conscious. The police department have been absolutely wonderful to work with. They've given me a special number to call if anybody stakes out my house, as they have before. I've been followed by paparazzi. I'm not a celebrity, so it's a different position for me to be in.

KING: You didn't expect this?

KILLEEN: Not at all. Not at all.

KING: How did you inform Nadya that you were no longer...

KILLEEN: Well, we talked on Friday. And she's had death threats and I've had death threats. And she's very upset that someone would come after us and come after her. I mean she says: "I'm just a mom. I don't know why everybody is so upset. I'm just a mom trying to do the best job that I possibly can."

KING: All right. Why do you think people are so angry -- crazy enough angry to threaten killing?

Why?

KILLEEN: Well, I think they are frustrated by a lot of things. When the news came out that Nadya was receiving some state disability from an injury and that she was trying to rehab and find a new career and go to school and she also had children at the same time, I think the taxpayers just absolutely flipped out and said, you know, we're paying for this and we're not getting our own fair share of government services. We pay a lot of taxes, the economy is bad, there's no jobs. They're angry.

And they're just taking it out on me. For some reason, they're taking it out on me.

KING: You've got a lot of clients, right?

KILLEEN: Yes, we do.

KING: You ever experienced anything like this? KILLEEN: Never. Never. And what's happening is, thanks to social media, people are organizing and they've called our clients. They've e-mailed our clients. They've threatened our clients and said they're going to boycott their goods and services and make sure nobody ever does business not only with the Killeen Furtney Group, but also with any of my clients.

KING: Nadya Suleman's fielded a lot of flak, of course, since giving birth. Among the critics were her own mother.

Watch.

(BEGIN VIDEO CLIP FROM RADARONLINE.COM)

UNIDENTIFIED FEMALE: To have them all is unconscionable to me. She really, really has no idea what she's doing to her children.

Why would she do this?

(END VIDEO CLIP)

KING: The person has got to cringe when they see something...

KILLEEN: I've cringed the few times...

KING: ...your client's mother.

KILLEEN: ...that I've seen it. Yes, I have.

KING: Were you shocked?

KILLEEN: Well, you know, grandma is tired. Grandma and grandpas are in their 70s. You know, they've raised a daughter. I'm sure they didn't think that they were going to be helping to raise six children.

Remember, Nadya was on bed rest for 10 -- almost 10 weeks before the octuplets were born. So Mom and dad had to come in and help out with six kids and school and schedules. And it's stressful. They're six little kids that have high energy and big demands.

KING: Has she retained someone else, another firm?

KILLEEN: No, she has not.

KING: Do you think that will be a problem, getting a firm?

KILLEEN: Well, I think she needs to listen to the advice of people that are closest to her. She's in a really challenging situation. And I hope she takes the good counsel that's available to her and makes the right choice and decisions, so she and her kids can be together in the future.

KING: If you're getting threats, what do you imagine she's getting?

KILLEEN: Well, and I've seen them, because, again, there's no e- mail account. So they're sending them to me...

KING: What do they say?

What do they write letters, e-mail...

KILLEEN: Well, they write e-mails. People will call my office and just say profanity on the phone. And with caller I.D. I know exactly who they are. Others have sent handwritten notes to me with horrible words that I never would repeat on the air, Larry. And they even put their return address on them so -- as if I'm going to return that call.

KING: Well you could give those to the police...

KILLEEN: I've given every...

KING: ...because threatening of death is a crime.

KILLEEN: Right. Yes. I have given them to the police. In fact, this morning I was even recording more for the police, to give them -- the threats, that continue to come in.

KING: The last time you were with us, you called Nadya a wonderful woman, said you couldn't wait for the media to meet her.

Here's part of her interview with "The Today Show."

(BEGIN VIDEO CLIP FROM "TODAY," COURTESY NBC)

NADYA SULEMAN: You wake up one minute, you know, you're thinking about your children and how they're doing and their safety and their -- their well being. And then all of a sudden, someone just opens you in half -- you know, cuts you and opens you. And it just wants to dissect you and just wants to put you under a microscope. And it's really kind of sick, because I think people really need to focus on their own lives.

(END VIDEO CLIP)

KING: You think she did well there?

KILLEEN: I think she told the truth. I mean, one of the things I know about Nadya is that she's very honest and very candid. And she speaks her mind. And I think she finds it offensive that people are so willing to, you know, provide shame and blame and judgment.

And they don't know her. She's doing the best job that she can with all of these children. And yet people are ready to write her off. People are even willing to take her kids away from her.

KING: What about the stories that she's obsessed with Angelina Jolie -- even had work done on her face to look like her more?

KILLEEN: You know, I asked her about that. And she just laughed. She said remember, with the octuplets, I put on 100 pounds -- a hundred pounds of extra body weight for my babies. So of course things are going to look a little different than they did when I first started.

KING: She does look like her.

KILLEEN: Well, I think hair and makeup, you could probably look like anybody you'd want to look like. She has said to me she has not had plastic surgery of any kind. And so I have to believe what my client tells me to be factually correct.

KING: So the only reason you're out of this is threats on you and the firm, not because of any qualms with her?

KILLEEN: Oh, no. Not at all. Larry, I just can't run my business and continue to do the things that I need to do for my clients with constant death threats and phone calls and interruptions. You know, I took on this account because I'm a mom and a grandma and I wanted to help someone who need help with the media. I did this pro-bono. I've made no money. I have no intention of getting any money. And I think people need to realize I just did this out of the goodness of my heart to help a woman who didn't know how to work with the media.

KING: Is your husband involved, too?

KILLEEN: Yes, he is.

KING: Does Joanne regret representing the mother of 14?

We'll ask her, when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, COURTESY NBC NEWS)

SULEMAN: I'm really good and they're really good.

(END VIDEO CLIP)

KING: We're back with Joanne Killeen, the president of the Killeen Furtney Group.

Did you regret taking this account?

KILLEEN: No, never regret. One of the things Grandma Murphy (ph) taught me as a young girl is to grow as an individual, you need to go toward your fear. And my concern was that I would do something that would not help her cause. And in reflecting upon my two weeks of working with her, you know, I'm very proud of our work. We did, you know, a great job of answering every media call that came in from around the world. I went on every show that I could to tell the positive story about my client and let people know and to just give her a chance.

KING: How much did the media bug her?

KILLEEN: Oh, they were around the clock. I mean, people were coming to my house. I was being followed, calls night and day. My -- I had so many hits to my company Web site, Larry, it crashed twice. KING: From around the world?

KILLEEN: From around the world. We had almost like 50,000 hits in a half an hour.

KING: Television, radio and print?

KILLEEN: Everybody. I've heard from media from every continent in the world.

KING: Money offers?

KILLEEN: Oh, of course. The tabloids in London. Of course, they offer all kinds of money. But any legitimate news organization in the United States doesn't offer money. We know that. So there was no money offered nor was there money exchanged from NBC.

KING: How about the tabloid television shows?

KILLEEN: Well, of course they always offer. Of course.

KING: They did?

KILLEEN: Of course.

KING: So no money was made in this?

KILLEEN: No. No money was made on my part. NBC didn't give her any money. In...

KING: "People?"

KILLEEN: No. No.

KING: Why didn't she ask for money?

KILLEEN: Well, you know what, she didn't ask for money. She's just solely focusing on being the best mom that she can be and telling her story.

KING: So that never came up, how much can I get for this?

KILLEEN: No.

KING: The question of a single mom supporting her children, that caused a lot of controversy. She addressed the welfare issue with "The Today Show" this way.

KILLEEN: She did.

KING: Watch.

(BEGIN VIDEO CLIP FROM "TODAY," COURTESY NBC)

SULEMAN: No, I'm not living off of any taxpayer money. If I am, if it is food stamps, it's a temporary resource. You receive no cash. And it's every month, about $190. And that's only for food. Yes, that's an excellent resource if used appropriately and not for too long. So it's not affiliated with welfare.

(END VIDEO CLIP)

KING: Is that part of the anger -- food stamps, taxpayers' money, etc.?

KILLEEN: That's what people are complaining about. They're upset.

KING: What do they think, the kids shouldn't eat?

KILLEEN: Well, no, Larry. They think that my client is in denial about, you know, what's welfare -- any type of state assistance or federal assistance, based on the e-mails that are coming into my office, the general public believes, is a form of welfare.

And she believes it's a resource. She's taken two semesters leave of absence from school. And when she goes back to school, she doesn't believe that she will need that continued resource to help her get along.

KING: Does she keep in touch with the father?

KILLEEN: The sperm donor?

KING: Yes.

KILLEEN: They have a very limited relationship.

KING: Limited.

KILLEEN: He's not active in their life at all.

KING: There have been, historically, multiple moms. I was just a baby, I think, when the Dionne quintuplets happened. But he became and she became a family -- this was a family in New York -- no, maybe Canada...

KILLEEN: Canada.

KING: ...gave birth to five daughters.

KILLEEN: That's correct.

KING: And they were world famous. They were hailed all over the world -- magazine articles, stories praising them. Nobody criticized them.

Why are we mad at her?

KILLEEN: That's a good question to ask America. If you look at the e-mails that are coming into my office, they're...

KING: What are they saying? KILLEEN: They're saying they think that she's worked the system. They think that she's been able to stay home and live off of the taxpayers and have these multiple children. She's not organized. She doesn't have any kind of structure, you know, isn't six children enough, she intentionally went out to get eight children.

And, you know, remember, Larry, she worked with the same doctor for every IVF attempt. Based on her history of six embryos implanted, she got one child. The doctor told her the most this last attempt would be would be either one baby or twins, at the most.

So she was shocked, he was shocked. Nobody expected eight children. That's the big -- big misnomer here. Everybody thinks she went and ordered eight and she got eight. She didn't.

KING: Where does she go from here?

KILLEEN: Well, I'm confident, as we continue to talk, that there are resources that are available to her and she will collaborate with, you know, church leaders in her area. And hopefully the American public can get beyond their anger about her choices and her decisions and think about those eight little kids, Larry.

You know, it's all about those kids. That's the whole reason why I took on this account, was to help the mom with those eight little kids. And once you see those little kids in the isolate (ph), it's a different story about your -- your choices.

KING: Any move to try to take the kids away?

KILLEEN: Well, you know, I read in the news last week that Carol Lieberman, a local doctor, has filed papers to have the octuplets removed and not even let them go home, you know, which I think is rushing to judgment.

KING: Thanks, Joann.

KILLEEN: Thank you, Larry.

KING: I hope that the threats stop now.

KILLEEN: I hope they will, too.

Thank you.

KING: It's not her account anymore. Leave her alone.

Joanne Killeen, president of the Killeen Furtney Group. Thank you.

KILLEEN: Thank you, Larry.

KING: Money news next -- will the stimulus plan work?

We're back with the stimulating Suze Orman in 60 seconds.

(COMMERCIAL BREAK)

KING: We welcome Suze Orman back to LARRY KING LIVE, the personal finance expert, the number one "New York Times" best-selling author. Her latest book is "Suze Orman's 2009 Action Plan." There you see its cover -- plan -- "Keeping Your Money Safe and Sound."

What did the -- what did the market do today, Suze?

SUZE ORMAN: The market didn't do much today, Larry, because it's Presidents Day.

So guess what?

KING: Closed.

ORMAN: It was closed. It did great. It did nothing.

KING: Do you expect a lot of activity tomorrow when he signs the bill?

ORMAN: I don't think whether he signs it or he doesn't sign it is going to really matter on the stock market. I think the stock market really is reacting more to what's happening with the banking industry, what's happening with TARP, how are we going to solve this problem in terms of the housing industry?

And I think it's reacting to that. And it didn't react very good last week, so we'll have to see what it does this week.

KING: Do you see anything encouraging?

ORMAN: Yes. Here's what I see encouraging. The stimulus got passed. He has a plan. We now have to give him our support to make this plan help everybody. I wish everybody would stop saying it is dire -- including the president. Stop telling everybody that it's dire, it's this, it's that.

We have a plan. Let's see what we can do. Let's deal with the housing crisis now, as well. And if we could just keep doing this, little by little, we're going to get through it.

Is it going to be easy?

No. But we will eventually get through it. We need time, though, Larry.

KING: Suze Orman is our guest the rest of the way.

And if you've got questions for Suze, she's here to help. Start dialing or head to our blog, CNN.com/larryking. And we'll get to as many as we can with the mistress of money -- the mistress of money...

ORMAN: Hmmm.

KING: I like that -- right after this.

(COMMERCIAL BREAK)

KING: We're back with Suze Orman.

You just said don't be negative. White House Press Secretary Robert Gibbs says the economy has not yet bottomed out and things are probably going to get worse before they improve.

Why does that hurt to say that?

ORMAN: Well, it doesn't hurt to say that. That's realistic. However, I wish all the bickering now between the Republicans and the Democrats -- I wish all of that would just stop. The stimulus got passed. Let's all get on board together now. Let's all be in one boat versus having one leg in one boat, another leg in another boat and then there we go and we sink.

Will it get worse before it gets better?

It probably will, Larry. We're in -- really, in a situation where, as I've been saying, I don't think anybody had any idea how bad it really was. However, we have started to turn it around. It's going to take time.

So it's just -- I just, you know, want everybody to really start working together now toward one goal -- and that's saving the people that need to be saved.

KING: By the way, Gibbs made that comment on John King's "STATE OF THE UNION" show yesterday morning.

The Fed recently released its latest survey of consumer finances. The bottom line -- the net worth of the average American household, adjusted for inflation, is lower than it was in 2001.

What do you make of that?

ORMAN: I think that it's very sad. And I make that -- I mean, and a lot of that has to do with what happened to people's 401(k) plans, what happened to people's real estate. Prices were going up and up. The stock market was going up. Real estate was going up. Everything was going up.

And then, within a very short period of time, if you think about it, we just took a nose-dive. All of a sudden, from October of 2007 until now, you lost 40 to 50 percent of your 401(k). Between, you know, 2005 and 2006, look what's happened in real estate -- 80 percent down.

Some people are 80 percent underwater, Larry, in some of their homes -- in Tampa, Florida. We've got to figure out how do we help those people and what can we do for them.

KING: A question on the blog from Fisher (ph), who writes: "I have a $42,000 house mortgage at six percent. I could pay it off tomorrow if I wish. I have a few bucks saved. And I want to know where is a safe place for those few bucks that I have saved. I'm 65 years old, looking for a monthly income from my investments. I have no other debt other than the mortgage."

ORMAN: Here you go, Fisher. You're paying a 6 percent interest rate on a mortgage. If you look at safe money right now -- whether it's a Treasury bill, maybe you could get 1 or 2 percent. Hey, CDs that are FDIC insured, so maybe you get 2.5 percent.

If you only have $40,000 or so left on your mortgage, you've almost paid off the entire mortgage, which means it's now principal that you're paying off. You're not getting a tax write-off anymore.

Do yourself a favor -- pay off the mortgage, Fisher. That then saves you your monthly payments that you need to make toward the mortgage. And, in essence, you don't need as much income.

Between why?

You don't have a mortgage payment anymore. That's what you should do.

KING: You listen to her, Fisher.

The U.S. savings rate...

ORMAN: Really.

KING: The U.S. savings rate was 0.8 percent last August. It jumped to 3.6 percent in December, even though the average income was the same -- maybe a little lower.

Is that a good sign?

ORMAN: I think it is a great sign. You know forever I've been on this campaign of, America, we have got to increase the savings rate. Save yourself. You know, I created that savings account where with, you know, if you put in $100 every month, at the end of 12 months, I'll give you $100. Go to Saveyourself.com, everybody. Be paid to save.

If you don't have a good savings rate and something happens, where are you going to go?

That's when you all of a sudden start putting things on your credit cards -- that you can't do anymore. That's when you then start to become an aid, you know, where you're asking the state to aid you -- food stamps and everything.

So if you have savings and something goes wrong, you will be able to save yourself. I think it's fabulous. I have always been against people spending money they don't have just to keep this economy going. Save money, people. Save money.

KING: You've often discussed the difference between needing something and wanting it.

ORMAN: Yes.

KING: Elaborate.

ORMAN: Well, so many times people think, oh, they're -- they go to a store or they go out to eat or they go and they have to get their hair cut or whatever it may be. And they think that they really need these things that they are buying.

Most of the things that people buy -- Larry, because I look at their expenses all the time -- they don't need these things, they want these things. They want to go on vacation. They want to go out to eat. They want to go shopping.

Do they need to do any of those things?

No.

What do you need to do?

You need to be able to buy food at a grocery store to feed yourself and your children. You need to be able to pay your mortgage payment or rent in order to keep that house over your head. You need to be able to possibly have a used car to get yourself to work. You need to be able to put gas in the car.

Do you need to be able to put gas in the car to go skiing?

KING: Should you...

ORMAN: No. So there's a big difference between needs and wants.

KING: Should you go cheap?

ORMAN: What does that mean, should you go cheap?

KING: Go cheap. Tip 15 percent, that's it. Shop -- bargain everything. Shop everywhere. If peanut butter is 12 -- no, peanut butter is a bad example.

ORMAN: Yes, but...

KING: If tomatoes are 20 cents over there and 15 cents across the street, buy for 15 cents.

ORMAN: Yes. You have to -- you have to do comparison shopping. You have to save every penny today. And you have to make every penny you save count because in case you lose a job, in case you lose a paycheck, how are you going to make it, everybody?

You don't have any savings. You don't have any retirement account. There is no equity in your home.

Where are you going to turn?

That's why many people today, I'm sorry to say, are living in their car.

And what are they doing? They're moving their car all the time because they don't want the car company to come and repossess it. You need to make every penny count and count every penny.

KING: We got a -- I like that, too.

We've got a surplus of information here with Suze Orman as our guest.

Don't go away.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP FROM "THE SUZE ORMAN SHOW," COURTESY CNBC)

ORMAN: Let's talk.

Let's talk right now.

UNIDENTIFIED FEMALE: OK.

ORMAN: You just thought somebody was giving you $400 just because you were cute?

UNIDENTIFIED FEMALE: Yes.

ORMAN: Are you kidding?

Are you kidding?

Is this a legitimate question.

Grow up. Grow up. You have got to grow up. You don't have enough money.

(END VIDEO CLIP)

KING: She tells it like it is.

She's Suze Orman.

Another blog from Bonnie (ph)

"What if you're a senior who has already lost 30 percent? Do you get out at the bottom or stick it out? I'm 65 and I've lost over $250,000 with a total retirement that was $750,000."

ORMAN: Bonnie, I'm sorry to say that, you say do you get out at the bottom? What makes you think that this is the bottom?

No, I know. I know. I just said I don't want anybody to be negative. But I do want us to also be realistic. There's no way that we can know that this is the actual bottom. I absolutely don't think that we're at the bottom here. I think it is very possible that we could go down another 10 or 20 percent -- not possibly right now, but sometime within this year.

So if you currently have enough money right now, given what you have, to pay your needs, generate the income you need and everything like that, then I have to tell you, would I be getting out here?

Uh-huh.

If you need money within the next five years or so, that is not money that needs to be the in market, if you ask me. You're asking for trouble. You have 10, 20, 30 years, OK, no problem, as long as your dollar-cost averaging. But Bonnie, if you're in your 60s, you need this money. Nothing can happen to it. It is not money that belongs in the stock market, not here, not now.

KING: Let's grab a call for Suze. Miami, Hello.

CALLER: Yes. Hi. I have a commercial loan at 5.75 percent that's coming due next year. Should I refinance now or wait a year?

ORMAN: Well, there's no way really for us to predict what interest rates are going to be a year from now. What we also can't predict a year from now, what will the credit markets be doing. Will they be flowing, will they not be flowing? Will you be able to refinance a year from now? Given that we know, if you can refinance right now, if you're able to, interest rates are relatively low right now. I would do the known versus the unknown.

The unknown is what's going to be in a year. We don't know. What do we know? We know you could refinance right now at a good interest rate, girlfriend, go ahead and do it.

KING: Long Island, New York, hello.

CALLER: Hello. I'm 50 years old. Is there a target balance or magic number I should have in my 401(K) if I would like to retire by like the age of 60?

ORMAN: It all depends on your expenses. You know what you should do is actually tally how much do you think is going to cost you every month to live. And then you're going to have to figure out, OK, if it's 5,000 dollars a month, where are you going to get that 5,000 dollars a month from. Can you count on Social Security? Maybe yes, possibly no, probably no. Where does it come from? You would need approximately -- what do you need? If you have 500,000 dollars, for instance, in a 401(k), at four percent interest, that's just 20,000 dollars a year of income.

What is that? That's taxable to you. You do the math on how much you would really need if you need 5,000 dollars a month. Be careful here. You need a lot. The better way to go about it is, rather than accumulating a lot of money in your retirement account, just get rid of all your debts. Get rid of your mortgage. Get rid of your car payments. Get rid of your credit card. Then you don't need as much money in income to pay for bills that you don't have anymore.

KING: We have a King Cam question from a college student here in Los Angeles. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Hi, Suze, I'm Katie. It seems like very time I'm on campus, credit card companies are offering me free stuff just to sign up with their cards. I'm trying to earn good credit. Is it a good idea to do that?

(END VIDEO CLIP)

ORMAN: Katie, only if you can be responsible with those credit cards. How do you know that you're in credit card trouble? I will tell you, my dear Katie. if you get a credit card statement and you owe money at the end, when you get that statement and you cannot pay it off in full each and every month, you, then, are already in trouble. If you're finding yourself only paying a minimum payment due every month, you're charging more than you can afford.

So do I think it's important for you to build up a good credit history, therefore establishing a good FICO score for yourself, so that you can get a job, can get hired, can buy a home one day? I do. But you have to be very careful. Just because you have plastic doesn't mean that plastic is to be used for movies, hair cuts, this, bars, whatever it is. That could be used to possibly put gasoline in your cars, if you have a car, but you have to pay it off in full. To possibly charge food at a grocery store. But you have to pay it off in full. Be very, very careful, my dear Katie.

KING: We'll take a break. Come back with more blogs, more phone calls, and more questions for the delightful Suze Orman. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ORMAN: All gone, all of it. You don't have a penny left. Please listen to me right now. We're all in credit card debt and everybody thinks everybody is doing just great.

You went way -- way -- wait, wait, wait.

(END VIDEO CLIP)

KING: Back with Suze Orman. From our blog: "should we strive to live way below our means?"

ORMAN: Yes, you should strive to live way below your means right now, especially if you don't have certain things in place. What would those things be? For instance, every one of us needs to strive to have at least an eight-month emergency fund. Why eight months? If you lose your job, it will probably take you at least eight months to get another one. You want to find yourself in a situation where you're out of credit card debt, you have eight months of an emergency fund, you're on time with your bills, you're not behind on anything, and you're putting money away in retirement accounts. If you're doing all that, great. You can live any life style you want. However, if you're not doing all of that, you need to strive to live below your means, so that you can do that just in case something happened.

KING: Are you telling people pay cash for everything?

ORMAN: I'm not telling people to pay cash for everything. But I'm telling them that they have to be very careful. I don't mind when they use credit cards, as long as when the credit card bills comes in, they have the money to pay it off in full. Here's what's happening in the United States: the credit card companies -- I've been saying this for a while now -- they are revoking credit cards. They are rescinding credit limits. They're increasing interest rates from the five percent that people have to the 32 percent. They are making it literally impossible for people to do everything now to help themselves with credit cards to get out of credit card debt.

I think they're actually making the situation far worse than helping people. I don't want to see people charge a lot on credit cards and then, all of a sudden, have the credit card companies say, it's 32 percent interest and we're closing down your credit line.

KING: Do you use credit cards?

ORMAN: I use credit cards all the time. I pay them off in full at the end of every single month.

KING: Los Angeles, hello?

ORMAN: Yes. Good evening. Hi, Suze. I have been paying down my debt. I was doing really well. Then my job came to me and told me they were cutting my pay by 15 percent. I have 4,000 left to pay on a credit card and I have managed to save 4,000 dollars in a savings account. Do I pay off those cards with that 4,000 dollars or should I just try to make some more -- make my payments monthly?

ORMAN: Just make your payments monthly now. And the reason is this: if all you have is 4,000 dollars in a savings account -- and I don't mean to say if that's all you have. That's really great, because that's a whole lot more than most people have right now. If, god forbid, your company now comes to you and say, it's not just the two percent we're going to reduce you, we're actually going to lay you off, what would you do at that moment in time. Because I can tell you that if that happened to you, chances would also be that your credit card company might revoke all of your credit lines at that moment, and you wouldn't be able to use those credit cards anymore.

Do you see? So you then wouldn't be able to live off of anything because you wouldn't have any credit cards to use. So I want you all to have a stash of cash, especially if there's a possibility or a probability that you may just lose your job one day.

KING: Middleburg, Florida, hello.

CALLER: Hello, Larry, good evening. I've got a question for Suze.

KING: Sure.

CALLER: Hi, my husband has been retired from the Navy. He did 20 years, got out nine years ago. We're upside down on our mortgage, terribly. We've got no credit cards, no car payment. I'm not able to work, but I don't get disability. We barely can make our regular monthly bills, electric, phone, that kind of thing. And we've gotten everything down about as far as we can go. And we're having a heck of a time trying to save anything. What else would you suggest that we do?

ORMAN: Have you called your lenders and have you told your lenders of your mortgage -- because obviously you have a mortgage on this house, if you're under water -- could they please help you do a modification where they actually reduce the principal that you have, as well as the interest rate? Have you even tried that yet?

CALLER: Yes, and I did do a type two thing -- not the modification, but the Forbearance Act. And they keep keeping me at that high payment. I would love to get that payment lower.

ORMAN: So here --

CALLER: What you suggest is right, that's the next thing to do then.

ORMAN: President Obama, do you hear this woman? Tim Geithner, the Treasury secretary, do you hear this woman? These are the voices of America, everybody, that are saying please help me. I'm barely making it. I'm terribly under water in my home, which everybody needs. They owe more money on their mortgage than their house is worth, even close to it. They're asking for help. They don't want to go behind in payments. They want to stay in their homes. They're begging you to help them. I'm begging you to help them.

Help this woman and help her tomorrow with the news that hopefully will come out. Keep listening to the news. Keep hoping that they're going to do something. They're understand that that is a problem. Let's see what they come up with, and then we'll know what you should do.

KING: She's on the money. You can't afford to leave us. We'll be back in 60 seconds.

(COMMERCIAL BREAK)

KING: One of our favorite impressions on "Saturday Night Live" this year is Kristen Wiig's impression of Suze. We'll have Suze critique it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's the Suze Orman show.

UNIDENTIFIED FEMALE: Go ahead and spend this money however you like. I did. I bought this. Not the jacket, just the snap-on collar. I can add it on to any jacket or even my evening robe, which in essence is a western style Chenilles floor length. I'm going to leave you with a few money saving tips, just for the ladies, that I cannot live without.

Number one, don't waste your money on expensive self-tanners. Do what I do. Sit in a bathtub with 12 beef bullion cubes overnight.

Number two, you need a hot stone massage, don't go to the parlor. Slather on some I Can't Believe It's Not Butter and roll around on a gravel driveway.

Finally, instead of buying fancy Maxi Pads, you can make your own. Go to the dollar store, buy a 24 pack of baby socks and some double-sided tape.

Tune in next week. In the meantime, remember, it's people first, then money, then things, then homemade Maxi Pads.

(END VIDEO CLIP)

KING: She's got you down.

ORMAN: She's got me down. Here's what's funny. When I do my shows that are on every Saturday night on cNBC, and I'm sitting there and I'm talking to people as they're calling in, all of a sudden, here's what's going on, I'm playing me, playing Kristen Wiig is playing me. All of a sudden, I'm sitting there going, oh, my god, that's what she does. I realize, it's not what she does, it's what I do. In the middle, I'm getting all flamushed and flamingled (ph). I love what she does. It's the greatest honor that's ever been really bestowed upon me, at some level.

KING: Suze, after the show, I'll give you the name of a very good doctor. Back with effervescent Suze Orman after the break.

(COMMERCIAL BREAK)

(NEWS BREAK)

KING: Suze Orman is our guest. Bill Clinton tomorrow night from his library in Arkansas. Two items right there, Suze, you can comment on. They're going to give a lot more to GM. What do you think?

ORMAN: I wonder why they're giving a lot more to GM before GM has come up with the plan as to what they were going to do to save anything. Wasn't that the deal, that as of tomorrow, they were going to present the plan to see if we should give them any more money? Have they done that yet? I don't know. I hope they have. If they hasn't, I'm not sure I would be giving them any more money.

KING: The government apparently is going to force banks to help people in trouble.

ORMAN: Did you notice -- I heard him say that. Why do we have to force banks? Why do you have to be forced to help the people that you got into trouble to begin with, truthfully, if you really look at it? Why? I don't understand. That is ridiculous. Help the people, banks, so that they will help everybody. Banks aggravate me, Larry. What can I tell you?

KING: I can tell. Rob writes on our blog, "I am 28. I currently save around 500 or so per paycheck every two weeks. What's the best way to start putting my savings, especially since the stock market is unsteady right now?"

ORMAN: Rob, here's the great thing, is that hopefully -- if you're saving 500 every two weeks, that actually is a lot of money, my young man. Therefore, depending on how much money you're making, you should open up a Roth IRA, start dollar cost averaging, buy some great stuff within your Roth IRA. You could either do no-loan mutual funds or exchange traded funds that pay a high dividend yield.

Way to go. You have 40 years until you're going to need this money. This right now is where fortunes are going to be built and made, because you have all this time. For those people who need things in five years, they've got troubles. For you, my young man, you should see this as the greatest opportunity of your life.

Just keep saving. Make sure one day you'll be able to buy a home here. Invest in the market and retirement plans. And you will have it made in the shade. And get a prenup before you get married, because you are going to have money.

KING: Let's take a call from Marietta, California. Hello?

CALLER: Hello. Hi, how are you.

KING: Fine, go ahead.

CALLER: Hi, Suze.

ORMAN: Hi.

CALLER: The question I have to ask you is I know that you know it, because you read the book, "The Richest Man in Babylon." Would you tell the American people how they become financially independent according to the book, the secret behind it?

ORMAN: Yes. Basically, "The Richest Man in Babylon" just says that you take a specific percentage, in this case it would be 10 percent, and you pay yourself first, and you just start saving it. Then everything will be OK sooner than later.

However, the problem today -- and I love that book. I think that's a fabulous book. It was one of my favorite books years ago -- Is that right now many people are in a situation where they don't have money to save. And I understand that, everybody. I get when you are under water in your home. You're behind on your car payments. You've just lost your job. You're out of unemployment. You know, you're living on food stamps. You don't have anything going.

We're talking about not saving money anymore. We're talking about how do we save your lives? The key hopefully to the stimulus package is to get you all back to be able to go to work and make a living, which I know you all want to do. So we're really almost a little bit beyond "The Richest Man in Babylon" right now for millions of people that are unemployed. And, trust me, I feel your pain. I can only wish and hope and pray that we can turn this around, so that you can go back to work just like I know you all want to.

KING: Getting advice from her is like a license to print money. More Suze and your calls after the break.

(COMMERCIAL BREAK)

KING: All right. Suze, Ed blogs us: "how do you stay out of debt if the car breaks down, the furnace goes on the fritz or you lose your job and got to refinance everything?" Just some thoughts what do you do when everything goes awry?

ORMAN: It's so funny, is that when I was, as many of you may know -- I was a waitress for seven years, making 400 dollars a month until I was 30 years of age. That always happened to me. Why was it when I didn't have any money did my car always break down? Why did these things always go wrong? I don't know why that is. That seems to be the rule of thumb.

With that said, that is why when you do have money come in, and you're making a living, and you can cut back in whatever way possible, so that you can have a savings account to pay for those things, it just makes life so much easier. If that goes on in your life, when you don't have any savings and you don't have any credit and you don't have a job, now we got problems. That's what everybody's experiencing right now.

KING: New York City. Hello.

CALLER: Good evening, Larry. Hi, Suze. My husband is in debt and possibly facing bankruptcy. How will this -- or will this affect me and my credit, since we file jointly?

ORMAN: It's funny. I'm sitting here thinking to myself, my husband has debt and he may file bankruptcy? No, no, no, no. It's my husband is in debt, meaning I am in debt. We are going to have to file bankruptcy. Even though this debt may be in just his name, I have a feeling that he's probably created this debt after you were married. Is that correct?

KING: She's off the phone.

ORMAN: Probably that's the case. Chances are, even if it's just in his individual name, you would be responsible for that debt if you got divorced. So it's going to affect you that way. And when you apply for a mortgage or credit together, and it's the two of you and he has low FICO scores, which he will if he claims bankruptcy, they will base it on the lowest FICO score. So your interest rate on a joint mortgage will be totally ridiculously high, if you can even qualify for one now because of his bankruptcy. KING: Sue asks on our blog, "I have no credit card debt and lately I use either cash or debit. If I do use the debit card, and it has not happened, but if it is a negative account, does my FICO score get affected?

ORMAN: Chances are, most debit cards do not report to a credit report and therefore do not affect your FICO score whatsoever. If you happen to have your debit card set up in such a way where the bank happens to extend you credit to do that and you pay them, you're fine. So most debit cards will not affect your FICO score negatively, and they will not improve your FICO score on the positive side either.

KING: Do you see any silver lining?

ORMAN: The silver lining, as I've said before, is that many people who are younger may be able to buy a home for the first time in their lives. Many of the values may come back, where we realize that we're going to define ourselves, Larry, by who we are and not what we have around us. And that may be good for us in the long run. The sad part is going to be, it's going to take us a while to get there. It's going to be many years for all of this to truthfully turn around.

So we need to think of this as a silver lining because what else can we do, because we are where we are and there's not much more we can do.

KING: Only got 30 seconds. Should you put money in the 401(k) if the employer isn't matching?

ORMAN: No. If I had a 401(k) and my employer wasn't matching, if I needed to save for retirement, if I qualified for it, I would do a Roth IRA first. If I didn't qualify for a Roth, I would do a non- deductible IRA in 2010, so that you'll be able to convert in 2010 to a Roth. That's what I would do.

KING: We sign it tomorrow. Things going to happen right away?

ORMAN: We'll see. He'll sign it. Why he waited so long is beyond me. I know, he thinks it's right away. I these market's going to do what these market's do. It's going to take a long time until this starts to take effect. There we go.

KING: Thanks, Suze, as always. Suze Orman. Her new book, "Suze Orman's 2009 Action Plan."

Last week, I was lucky enough to attend the Red Dress Awards in New York. The event promotes awareness of heart disease in women. you can see a special behind the scenes look at CNN.com/LarryKing. While you're there, download our podcast with Bill Maher. Tomorrow night, Bill Clinton, former president, from the Clinton library in Little Rock, Arkansas. Clinton for the hour, Tuesday, only on LARRY KING LIVE.

Only right now, John King with "AC 360." John?