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Your Bottom Line

President Obama's First 100 Days; How to Find the Best Deals For College; Tips on How to Save at the Home Improvement Store; How to Manage Your Cyber Footprint

Aired April 25, 2009 - 09:30   ET

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

GERRI WILLIS, CNN HOST: Hello, I'm Gerri Willis and this is YOUR BOTTOM LINE, the show that saves you money.

The first 100 days of President Barack Obama, what do his plans mean for your money? Then the cost of college, how to find the best deal financially and maybe even get some of that loan forgiven. Plus, sweeping those questionable Facebook photos under the rug. We'll tell you how to manage your cyber footprint. YOUR BOTTOM LINE starts right now.

We are closing in on President Obama's 100th day in the White House. So, what's been accomplished in that time and how will it affect your bottom line? Here to weigh in, Jeanne Sahadi is a senior writer with "CNN Money." Jack Otter is a financial journalist and Eamon Javers is a financial correspondent with "Politico" in Washington. Welcome all.

UNIDENTIFIED MALE: Good to be here.

WILLIS: All right, well let's get right down to it. I want to start with the stimulus package. And Aman, I'm going to direct this to you. You know, week-one, Congress is debating the stimulus package, by the fifth week it's signed into law. This was lickety- split, $780 billion worth of spending, bam! You know, I think you have to say it hasn't fixed the economy yet, but has it done enough so far?

EAMON JAVERS, POLITICO: Well, we're already seeing the benefits of this stimulus spending to folks who really need some of the money particularly those who received food stamps are getting extra bonuses in their food stamp allotments. We're seeing construction projects across the country, particularly in highways already getting started. Those were the famous shovel ready projects we were talking about at the beginning of the year.

So, a lot of the money is starting to hit the real economy, but it's going to take a while. As fast as they passed the bill, it's going to take some time to actually spend all that money. So this is a longer term project that they have in mind going into 2010 and early next year we should see the bulk of the money having been spent. And by that point we'll be able to evaluate whether we've seen some real results here.

WILLIS: Jack, I want to turn to you. You know, I think the most important part of the stimulus spending was jobs and the president has been promising that we're going to get three million to four million jobs saved or created with this bill. What kind of traction are we getting on that?

JACK OTTER, FINANCIAL JOURNALIST: Well, it's funny, because in your own -- one's own life, you know, hey, no stimulus money is coming my way, but in fact, anecdotally there an awful lot of money. I mean, there were cops in Ohio who are going to get laid off, they've got jobs now because of stimulus money. There are teachers in Georgia who were going to lose their jobs. They're keeping their jobs because of the stimulus. So there's your jobs saved.

I looked at a cool map on "Chicago Tribune's" Web site. And now maybe this is a reflection of Rahm Emanuel's power, but it showed all over the map was projects they were going to get done, a lot highways, as Eamon said, but a Navy barracks and Amtrak station. So, all of this stuff is going to get built and blue-collar guys are going to have work because of the jobs.

WILLIS: Also some controversial projects like the John Murtha airport and (INAUDIBLE), crazy stuff.

But, let's get to housing because that's something that's really on our viewers' minds. You know, we had housing reform in February. I think you'll remember that. The proposal was out there. April -- it's until April 6 before the banks actually signed up for this. You know, lots of expectations about getting people out of foreclosure here, helping people save their homes. Are we getting traction on that part of the stimulus?

JEANNE SAHADI, CNNMONEY.COM: Well, it's really too soon to tell. Right now, banks are receiving applications for the refinance piece of Obama's plan and the piece of loan modification, they're just now getting started, so we have absolutely no record of how it's going. The Obama administration is not promising to help everybody, they say it's between the refi and the mods, maybe nine million people can be helped. But, they're going to be, still, a lot of people are going to be foreclosed on, so it's not a panacea.

WILLIS: You know what's interesting though, you know, because all we care about is seems like are housing prices in this country. I spoke with Mark Zandi this week who follows this, frankly, maybe one of the best databases, Zandi says we are at the bottom in the housing Market, so that is at least some good news, here.

OTTER: People need to remember that housing prices were way inflated. They're going to come down hard and people are going to get hurt and there's nothing the government can or should do to stop that. It's really unfortunate, but to a certain extent some people are going to get hit and it's just the way it's going to go.

WILLIS: Jeanne, let's talk about Make Work Pay. You know, you got to talk about taxes here because taxes are an important part of the stimulus program and simply every program that seems to come out of Washington. You know, people got onboard with that, really a middle-class tax cuts that started April 1. Is this really making a difference?

SAHADI: Again, we have no way of knowing. Even the stimulus payment that came out in early 2008, it takes economists a while to figure out how much has been spent, how much was saved, and there is some controversy over that. The way the Making Work Pay credit is happening, you're getting it in small increments in your paycheck every two weeks or so.

So, we really don't know how much of it people are saving or how simulative it will be. As a political accomplishment, though, it's one of Obama's biggest. I mean, he promised it on the campaign trail and he delivered, you know, it less than a month into office.

WILLIS: Very, very quickly.

Eamon, let me get to you on that because I know you track this quite a bit. When you look at this tax package, you know, one of the big controversies, what will happen to the bush tax cuts, where is that now? The president has wanted to get rid of those. I know it's something he's very vested in. Will it happen?

JAVERS: Yeah, what they're signaling now is they're going to let those Bush tax cuts expire, but when you take all of this stuff together, all the activity by the Obama administration, it's having a real effect on the place the Obama administration knows well and loves, which is the polls.

Clearly the right track/wrong track poll question, which is the most important poll question in politics, the right track answer is going up and the wrong track answer is going down, that means generally that Americans think that Obama's doing the right thing. That can be a bit of a self-fulfilling prophecy in terms of the economy and it can really juice people's consumer expectations.

WILLIS: All right. I got to get you to a big story from this week and that's credit cards. I don't -- you had to be asleep or off the planet not to know that we were all debating credit cards, credit card practices. I want all of you to weigh in just a little bit on where is this going, will there be real reform? People are frustrated with interest rates popping higher, with limits being reduced.

Jeanne, let's start with you.

SAHADI: Well, you know, the Fed has passed regulations that won't go into effect until July 2010, which does me no good if my rates and are high and I'm behind. There's legislation in Congress right now, in the House and the Senate, that seeks to codify that into law, those types of regulations and some of them are a little bit more stringent. And now we've got the Obama administration is stepping in and saying, hey we're going to talk to these credit card execs and we're going to (INAUDIBLE) try to massage them into doing this.

WILLIS: Jack, do you have any confidence that we're going to get it change?

OTTER: I think we will because I think people are so angry about the AIG bonuses and all this billions and trillions that are going to the banks, I think the credit card companies are the ones who are going to pay for this populous anger. And frankly, I don't really feel very sorry for them. I mean, some of these things where you can double cycle billing, where you pay more interest based on your last month's bill even though you paid it off in full, I mean, they've kind of dug their own grave, here.

WILLIS: Nobody likes that. Eamon, do you want to weigh in? We have a few more seconds, here.

JAVERS: Yeah, well I mean, the thing that makes my head explode here in looking at this is we've the idea that the administration is talking about actually taking ownership stakes in these big banks which own the credit card companies so that the government will be the owner of these banks. At the same time we're telling them to make less profit by cramming down their interest rates on some of the credit cards.

So, which is the government trying to do here? Do we want these banks to be profitable or do we want them to be fair to the consumer? You can't necessarily have both, particularly when the government is both the owner and the regulator, which we might see later this year.

WILLIS: And don't forget they're getting our tax dollars, too. I mean, that's another complicating factor. This is so controversial, we could go on and on.

JAVERS: And very new, too.

WILLIS: We really don't have time. I want to say thank you to my guests, Eamon, Jeanne, Jack, thanks so much for helping me out today.

A college degree can be the first step in advancing your career, but how do you invest in your future or your child's without breaking the bank?

(COMMERCIAL BREAK)

WILLIS: So you got that college acceptance letter, but with shrinking 592 savings, college budgets may be limited. And while money isn't the only thing to take into consideration when choosing a school, hey, making the dollar go further is more important than ever. Katherine Cohen is the founder and CEO of IvyWise, an education consulting firm.

Katherine, welcome. Good to see you.

KATHERINE COHEN, IVYWISE: Thanks for having me.

WILLIS: All right, I want to show you some numbers here and our viewers on what people are doing now because of this, really this crammed down in college costs. Fifty-three percent of those interviewed hope to attend a private college, but this year they're now limiting their choices to public institutions. And this, 27 percent will now start their degrees at local two-year community colleges instead of four-year schools.

Obviously people are making some tough choices out there, Katherine. If you are getting that acceptance letter and you are getting the package, the financial aid package, where do you start in analyzing those, because it's not as easy as you think?

COHEN: Well, you have to deposit by May 1, so it's time to sit down with your family and look at all those packages that could be made up of financial aid, merit aid, scholarship money, grants, loans, work study opportunities, and then you have to figure out your expected family contribution.

WILLIS: That's the No. 1 issue. And tell me what exactly does that mean? EFC, everything revolves around that.

COHEN: Well, you really have to crunch the numbers and figure out, OK, if you get some free money, which is always fabulous, if you're going to get grants or merit aid or scholarship money, that's wonderful, but you might also have some loans and we're advising students to look into those loans, for parents to look into Stafford loans, plus loans, on Perkins loans, because those are still viable ways to pay for college.

WILLIS: Private lenders really aren't making money available to college students these days, that's definitely tough. But part of the problem with looking at these packages is that they really don't compare apples to apples. You got to make sure you know what you're looking at. How do you do that?

COHEN: Well, at IvyWise we tell students to look just beyond the free money or the whole financial aid package and look for both the academic and the social fit, because this is an experience that's going to affect the rest of your life and it's an investment for the rest of your life, so you really need to consider the whole experience. In fact, it would be a great time this week to go visit some of these schools and see what they're really like.

WILLIS: If you haven't already. Make sure you understand what the institution is like and if you'll be a good fit for that. One of the things you say is that there are other ways to save that may not be obvious like graduating early. What a great idea.

COHEN: Right, we advise students on this all the time. They can think back, so if they're out there in high school, start taking some A.T. tests. If you get a three or better on those tests, those can translate into college credit later or you can take community college classes or summer college classes and have those transfer for credit so you could graduate in three years.

But there's other things people can think about, right now. We're telling students to look at the softening rental market. It may be less expensive to move off campus and share an apartment with friends than do the traditional room and board. And as we said in the ApplyWise survey, that 20 percent of kids are looking right now just going to community colleges and they're staying home, saving money, getting a job, and then transferring into their four-year school.

WILLIS: You know, one thing that we should tell our viewers today, which is, I think, critical is if something has changed in your life, maybe the parents have lost a job, maybe there's some big change financially in your situation, you can have the college relook at that.

COHEN: Absolutely. This is a week where you should get on the phone right now and speak to those financial aid officers at the colleges where you have been accepted. Negotiate with them. You may even be able to bring in a package from another school and say, hey, can you match this? Can you make it happen so I can attend this school?

WILLIS: Katherine Cohen, thank you so much. Great information, we appreciate it.

COHEN: Thanks.

WILLIS: Now, that we hopefully have helped you settle on the right student loan for you and your family, one way to ease that financial burden, loan forgiveness. Yes, loan forgiveness via volunteer work. Serve 12 months with AmeriCorps and receive up to $7,400 in stipends, plus about $4,000 towards your loan, and that amount is likely to increase.

Now, the Peace Crops offers to cancel 15 percent of your federal Perkins loan per year. Provide 1,700 hours of service with volunteers in America -- Volunteers in Service to America and receive $4,700.

And students who are in the Army National Guard may be eligible for their student loan repayment program which offers up to $10,000.

Even in a down market, home repairs are a smart way to boost the value of your house. But, can you do it on a tight budget? Grab a pen and paper. Important tips to save you big money at the home improvement store.

(COMMERCIAL BREAK)

WILLIS: You hear a lot of negative news about the housing market, but falling home prices in some hot spots have first-time buyers and investors scrambling to snatch up foreclosed homes. Supply swamps demand and there are bargains to be had.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): The beach at Ft. Myers, Florida, has always been a major attraction. Now, after a tidal wave of foreclosures, bargain hunters are coming here to make money.

UNIDENTIFIED FEMALE: Hi and welcome to the Cape Coral Home Vultures. If you're looking to capitalize on the current market conditions, you've definitely come to the right place.

TRISH KELLY, LOCATEHOMES.COM: After you.

WILLIS: The Ft. Myers realtors association says that in the first quarter of 2009, nearly 3,100 homes sold, an increase of 125 percent over last year. KELLY: I am my busiest ever in 11 years of real estate that I have ever been.

WILLIS: Rick Hall (ph) and Jake Althorp (ph), from Erie, Pennsylvania, bought this one for $69,000, down from $169,000 two years ago. They plan to rehab it with a couple of buddies, $11,000 worth of materials and sweat equity.

UNIDENTIFIED MALE: We have six days. That's the schedule.

UNIDENTIFIED MALE: Four pieces of granite.

WILLIS: Sometimes Rick and Jake bicker over kitchen decor.

UNIDENTIFIED MALE: He likes the cherry. I like more of a mahogany.

WILLIS: And proper etiquette.

UNIDENTIFIED MALE: I have to brace this ceiling.

UNIDENTIFIED MALE: Put your arms down.

UNIDENTIFIED MALE: Yeah. I have to brace of this ceiling -- I have to brace the ceiling before I tear down this wall.

WILLIS: They bid on the house sight unseen.

UNIDENTIFIED MALE: All right.

WILLIS: Their agent shot it with his camcorder and posted the video on YouTube.

UNIDENTIFIED FEMALE: Duct work done in '04 and all replumbed in '06.

WILLIS: So far, there's only one surprise, dreading the snakes he imagines are lurking in the overgrowth. Rick musters his courage. Good news.

UNIDENTIFIED MALE: We got a dock!

WILLIS: The wood is rotten. But rebuilt, a strong selling point.

UNIDENTIFIED FEMALE: It's probably about 12-foot dock.

WILLIS: In the end, the rehab took eight days, not six. But it's done. And if it sells, they plan to be back, soon.

UNIDENTIFIED MALE: We don't know when it hit rock bottom. You know, it could be two months ago, could be today, it could be next month.

UNIDENTIFIED MALE: We didn't want to wait until next year and kick ourselves and say, I wish I would have done this. (END VIDEOTAPE)

WILLIS: All right, do it yourself sounds like a good idea for home improvements, but one worry is going overboard on costs. There are some hidden ways you can save some big money that home improvement store. Deb Snoonian is the senior editor with "This Old House."

Deb, thanks for coming in.

DEB SNOONIAN, THIS OLD HOUSE: Thank you, Gerri.

WILLIS: I think this is a great topic. How to save at the home improvement store, because we all want to do that. You say there are little tricks to make sure you save the most like starting early in the day.

SNOONIAN: That's right. We're just going to talk about a few sort of time-tested things that we always do at "This Old House." We always say a little prep work pays off. So, you mentioned timing. A lot of things in life, timing is everything, that includes shopping. First tip here, shop on a Saturday. Why? Most of your sales at home stores go from Saturday to Friday because they know that people are out at the stores at that time. You might have to fight a little bit of a crowd, but it's worth it if you're getting a good bargain.

WILLIS: And you say shop the large purchases at the end of the month. Why is that?

SNOONIAN: Well, most stores will have sales targets at the end of the month or even the end of the year. So, plan your large purchases around this time and remember get to the stores early. That saying, the early bird catches the worm, they always have the best offerings early in the morning because things are marked down the night before.

WILLIS: All right, so when I'm shopping there, I'm always wondering, could I like negotiate? Could I say, I don't want to pay that? I want to pay something else? Is it possible to do that?

SNOONIAN: You can. You know, find your own bargain. Do not be afraid to speak up. There's a few different things you can do. First, ask the sales clerks what has just been marked down. They've usually done the work, so they'll lead you to the right stuff.

WILLIS: Is it enough to talk to sales clerks, though? Should you go up the line, get the manager?

SNOONIAN: You can and in a few cases, definitely. If you're interesting in say, buying a floor model, if you see damaged merchandise, those are opportunities to get a discount. And you need to speak to who we call "the decider," usually a manager.

WILLIS: The decider.

SNOONIAN: The decider. That's the person who's really authorized to do it. Another great tip here is bring in a flier from a competitor's store and ask your store to match their price.

WILLIS: Oh, I love that. I love to do that all the time.

SNOONIAN: Sears will do it, Home Depot will do it. Now just keep -- you know, one of the things they may even -- they may even be -- in fact I think Sears and Home Depot have -- they'll beat it by up to 10 percent even after you've bought the item. So again, don't be afraid to open your mouth and ask for those discounts, you're the bargain hunter. And stores really want to do business with you now.

WILLIS: Now, I'm use to coupons at the grocery stores, should I be using coupons at the home improvement store, too?

SNOONIAN: Definitely. You can download coupons. We always say they've gone high-tech, 36 million people downloaded coupons in 2008. So, spend a little time on the Web. A few different sites you can do for home improvement shopping: Coupon Cabin, eBates, they give you -- you'll find there, coupons for online sales.

RetailMeNot is a place where you sign up to can get e-mail newsletter for the stores that you go to most. Sunday Saver, you can enter your zip code and find like sales in your area. And then another Web site called FreeShipping.org, you can download coupons for free shipping for online home stores, which is great because a lot of those items are really heavy, so why not get the free shipping.

WILLIS: Fantastic. I love those Web sites. Those are great. I know people will appreciate this. Take a look at this weekend. Deb, thanks for the help, today.

SNOONIAN: Thank you very much.

WILLIS: The bottom line, time your trip to the store right. Arrive early in the morning to get first dibs on sales and plan on making large purchases at the end of the month.

Between your Facebook page, your Twitter account and your latest blog entries, what does your online image say about you, and how to make sure it doesn't come back to haunt you during your next job interview.

(COMMERCIAL BREAK)

WILLIS: You know how it goes, you upload that crazy picture from college to Facebook for all your friends to see. You rant about your old boss on your blog, but what happens when a potential employer Googles you? It's your cyber footprint and if you're not careful, well, it could come back to haunt you. Chris Soghoian is cybersecurity expert and fellow at the Berkman Center for Internet and Society at Harvard University.

Chris, great to see you.

CHRISTOPHER SOGHOIAN, CYBERSECURITY RESEARCHER: Hello.

WILLIS: All right, well help me out here. How do I get those pictures off the Web?

SOGHOIAN: One of the first things that people should do is they should actually go -- sit down at a computer, type in their own name and see what comes up. You know, you should put yourself in the shoes of a potential employer and look and see what they are going to see in front of them.

WILLIS: I tell you, they all do that, they Google potential candidates, they see what's on the Web. I don't think people realize this. But, let's say I do have some control over that picture. Do I write Mr. Google or Mr. Yahoo to get it off? I mean, how does this work as a practical matter?

SOGHOIAN: Well, it depends where you've put it. So, if you've put it on your Facebook profile, you can go into Facebook and remove those photos. If your friends have uploaded photos and tagged you, which means they've essentially added your name to those photos, you can remove that tag and you can change your privacy settings so no one outside your circle of friends can see that sort of thing. But really, you know, if you're looking for a job, you want to be as conservative as possible. You know, no one has ever been fired for having too little information out there.

WILLIS: All right. Well, let's go with that. Because I think what you want to do is really control the information about you. So, maybe I would like to have a cheap Web site with my name on it where I could post my resume, maybe video of myself giving a speech or something. That would be something that would be attractive to an employer. Is there an inexpensive way to do that?

SOGHOIAN: There are many companies that will allow you to -- for $10 a month set up a Web site, your own Web presence. And it's a great idea because, your Web site will naturally rise to the top of the search results and so, when someone types your name in, the first thing that comes up will potentially be something that you control entirely. You know, you definitely want to have control over the first couple of things that come up.

WILLIS: You know what would be really cool is if I could have a Web -- an ad on Google, but I figure that's pretty expensive. Is it?

SOGHOIAN: For about five cents per click, you can place an ad for your own name, assuming that your name isn't also shared by a celebrity, you can place an ad and then you'll find out, actually, every time someone clicks on your ad, you'll find out every time someone searches for your name. So, placing an ad can be a very inexpensive way of sort of doing a little bit of reconnaissance is to find out who's Googling you.

WILLIS: All right, and some quick tips here for privacy, because that's important, too.

SOGHOIAN: Sure, so the first thing is to lock down your social networking settings. Be sure to go on to Flicker and these photo sharing sites and make sure that you don't have anything problematic. Go to MySpace, go all of these other social networking sites and remove anything that you think is problematic.

WILLIS: Thank you, Chris. Appreciate your help today.

SOGHOIAN: Bye-bye.

WILLIS: As always, we thank you for spending your Saturday with us. YOUR BOTTOM LINE will be back next week right here on CNN. You can also catch us on HLN every Saturday and Sunday at 3:30 p.m. Eastern Time.

Don't go anywhere, your top stories are next in the CNN "NEWSROOM." Have a great weekend.