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Don Lemon Tonight

Interview with Sarah Bajc; The Latest on the Search for Sunken Ferry

Aired April 22, 2014 - 21:00   ET

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

BILL WEIR, CNN TONIGHT HOST: Good evening, I'm Bill Weir. Thank you for checking in on CNN Tonight.

Day after day, the families of Flight 370 have met with Malaysian officials, they have listened, they have pleaded, they have demanded answers, and now they are furious.

Tonight, I will talk to Sarah Bajc, her partner Philip Wood, an American onboard Flight 370. And she says the briefings with Malaysian officials are like a bad comedy routine.

We'll also get a Bluefin21 status report and examine the possibilities of that swimming robot keeps up empty.

Meanwhile, another group of desperate relatives stares into the Yellow Sea off of South Korea waiting for the worst kind of reunion. We'll have the latest on the search for the sunken ferry. Nearly 200 people many of them teens still missing a week after the disaster.

And in Eastern Europe, who blinks first? Accusations are flying after a Ukrainian politician is found tortured and killed. U.S. paratroopers are on their way to the region for expanded military exercises. I'll ask two top generals, what do you do about a problem with Vladimir Putin?

And how do you teach your child about financial security in the glories of delayed gratification? Well, handing out an allowance sure doesn't help. Such as the wisdom of Dave Ramsey here tonight with his daughter to give us the fundamentals of smart money, smart kids. And get these parents. He says there are five things you can do to get your kids through college without borrowing a dime. That is later in the show.

But let us begin tonight in Perth, Australia where 10 planes and 12 ships are heading out to the search area for Flight 370 and whether that could get dicey.

CNN's Michael Holmes is there for us live. Michael, on day 47 of the search, good morning to you, what's the latest?

MICHAEL HOLMES, CNN CORRESPONDENT: Yeah, that's right, Bill, mission number 10 is done now. That focused search area that we've been discussing in recent day now, 80 percent covered and still nothing found, no sign of MH 370. No word on the data results from that latest mission. But the previous nine of course turned up nothing, Bill.

WEIR: And talk to me about the weather. We heard there were reports of a typhoon, is that still threatening?

HOLMES: Yeah, this is a Cyclone Jack, Hurricane Jack you'd call in the U.S. It's breaking up, it's dissipating, but it is having an impact. This is going to be an eight foot swells, 2.5 meters swells out there. There's going to be low cloud and also the visibility is going to be down to less than a mile. So that's going to impact things.

Last we heard, the planes and the ships are still going to be looking surface debris but the weather not helping, as if they needed something else to slowdown this search, Bill.

WEIR: I understand that the Aussies and their Malaysian counterparts are mapping out sort of broader strategies for the long run. What do you know about that?

HOLMES: Yeah, because they're going to give up even if this focused area turns up nothing. The Malaysians have made it clear that this search won't stop. So there are discussions between the Australians and the Malaysians on issues like, who would handle any debris if it is found there? There is also the very delicate issue of human remains. What happens to them? And also going forward, how to redeploy resources? What to bring in if the search area does widened? That could be the chance. We're talk before about that arc, about 300 miles by 30 miles that could will be the focus of any new search.

So nobody's giving up but with 80 percent of that focused area, down the one that they have the best shot at they felt that's not going to do confidence any good, Bill.

WEIR: All right, Michael Holmes in Perth. And as that search goes on the emotional toll just wears on the loved ones of the 239 on board.

Sarah Bajc's partner Philip Wood who was onboard Flight 370 she joins us from Beijing tonight. And Pralhad Shirsath is missing his wife Kranti and is kind enough to check in tonight via Skype. Thank you, both of you for being with us tonight.

Sarah, I want to get to you describing these briefings as bad comedy in so many words. But Pralhad, what are your thoughts on the search. What are these 47 days been like for you? And what do you make of the efforts so far?

PRALHAD SHIRSATH, HUSBAND OF KRANTI SHIRSATH, WHO WAS ON FLIGHT 370: Of this 47 days, everyday my son, every 10 minutes he comes and ask "Papa what is new, is there any new news?" And my younger son just kept on silent. He's not talking single a word. And I don't know what to tell them. Should I tell them that she's dead or should I tell them she's coming back? I'm in great confusion. I don't know what do. And I have no courage to tell them -- what to tell them because I don't know.

And government -- Malaysian government has not said anything. There is no any solid evidence or any solid data. We don't know what to do.

WEIR: Have you've been in contact with the other families? Is there a sense of unity where everybody is on the same page?

SHIRSATH: Yes, we are in contact with the families of China. And thanks to Sarah with coordinating this, our group on Facebook and also helping us to get in touch in -- with the media and also having contact with families in India. That -- we are just three families here.

WEIR: Sarah, I understand that lawyers are starting to come out of the woodwork and to approach the families. What is your reaction to that?

SARAH BAJC, PARTNER OF PHILIP WOOD WHO WAS ONBOARD FLIGHT 370: Well, the chasing of the lawyers actually started at the very beginning, mostly even at the original site in the in Lido. Fortunately, most of the terrible ones have kind of gone away. And now we have begun the effort to try seek out positive legal representation.

It makes it very complicated though, because you've got people in China, you've got people in Malaysian, in Australia, in the United States, in India, in France and we all have different kinds of requirements that we operate underneath. Not everybody has the same rights under international law. And that's actually a terrible, terrible shame. So as a group, we as the family unit are trying to come together to make sure that everyone's interest are protected.

WEIR: You've described these briefings as a comedy routine, what do you mean?

BAJC: Well, it's just the same thing over and over. They say they're going to send technical experts and then just mouth peace shows up. They can't ever answer a question. They never give any information. So why keep bringing the families through that point of crisis? It doesn't make any sense. Now, there's a very interesting saying is that the definition of insanity is continuing to do the same thing and expect a different result. And I think we're in a same situation right now.

WEIR: Pralhad, do you think they're looking in the right place?

SHIRSATH: No. From day one when they say that they will use some special type of method to analyze data and my son said that nothing is -- "Papa nothing is special there." And from that day, we have not believed that they are looking in the right place. And because also they have not give back any other theories or they have come up with any transparency that they are not sharing any data with us. And I asked many time this question through e-mail and through phone to the Malaysian authority that based on what exactly you have decided that the plane has crashed into that South Indian Sea and they have not come up with any answer. They say we have to wait and wait and wait. And we have not been given any new solid information for the last 46 days ...

WEIR: Sarah ...

SHIRSATH: ... unfortunately.

WEIR: ... have your tried approaching the Australians? Have they been more cooperative?

BAJC: We have not had any access directly to the Australians, to the Australian government. Of course we have a number of the Australian families who have engaged with our families association. But that is something that we might try next. But ultimately, you know, they're only interpreting things that they've been given too. None of us to the best of my knowledge have had a complete view into all of the factual evidence that is indeed available in this case that just has not been shared.

WEIR: It's not been shared. And Sarah I just wonder about your emotional state, you were posting on Facebook just some really point and a beautiful sentiments to Philip. Are you still doing that? How are you -- what is your coping mechanism as you go through?

BAJC: I still write to Philip everyday. I don't actually post all of them., partly because I'm just frankly so swamped from a scheduling perspective, I'm continuing to work full time as a teacher and then have all of these activities. So, you know, four or five hours of sleep at night is about all I'm getting. But, you know, emotions are a powerful thing, they can crush us if we let them but they can also give us a sense of power if we allow them too as well.

And so I think the general consensus among most of the families is that we have gotten angry now. We feel we've been lied to. And that anger is allowing us to focus our energies now.

WEIR: Well, Sarah, as you continue your vigil for Philip and Pralhad for Kranti, our best wishes to both of you. Thank you so much for sharing your stories tonight.

And joining me now David Soucie, the author of "Why Planes Crash" also Mary Schiavo, Former Inspector General of the Department of Transportation and attorney for victims of transportation accidents.

Let me ask a lawyer question to you, Mary. I guess 45 days, is that the legal limit to which lawyers can approach these families? Sarah says that the bad ones have been coming at her from day one. How do you think that will change the process -- the prospects for these desperate folks?

MARY SCHIAVO, FMR. INSPECTOR GENERAL: Well, you know, she's right. What happens is somewhere on the south the rules comes out. The rule is (inaudible) sufficient safety board rule (inaudible) ...

WEIR: Mary, I'm sorry let me stop you because -- I'm going to interrupt to you, Mary because I -- we're just having trouble here in your mike. It sounds like its slip from your lapel. If you want to reset that, I'll come back to you in a second. But David, let's talk about the search. Do you believe they're in the right area? They stand those pingers from -- was that April 9th and seems so long ago. It's just a matter of finding it, right?

DAVID SOUCIE, AUTHOR "WHY PLANE CRASH": It does, you know, Sarah was talking earlier about, you know, no credible evidence and that they've been lied too and I certainly appreciate her sentiment (ph) that and she has been. But the one thing that I'm hanging into and I'm confident about is that those pings came from a pinger. I don't see any other thing that could be. It hasn't been disputed logically by anyone else to me. So I believe that they're in the right area.

There are some things that bother me about the fact that they're talking about retracting from that area after they've finished that six mile circle. Remember, this aircraft is designed to with a 91 glide ratio in the air. So it could travel for every one foot down, it can go nine feet forward. So if you think about that in terms of underwater, if those wings were able to stay on the aircraft when it hit the water, that aircraft could have broken off and the pings could be in one location, the aircraft could be literally tens of miles away from where that pinger is located.

So the concern of mine is that they have banned on this small area and then go this big huge area and they miss the opportunity to stay within that and just simply increase the radius around where those pingers are located because I'm confident that that's where the airplane is.

WEIR: Aerodynamics, hydrodynamics little different but point taken on that. But, Mary, let's go back to you as you are saying, day 45 at least with U.S. lawyers. That is a grim benchmarks when they can approach victims' families. What do you think about what -- their prospects now?

SCHIAVO: Well, yeah, the lawyers applicable to U.S. lawyers and no matter where they work. And it just basically bans them from direct solicitation going out and but in holding families in 45 days. But that's all that it does. It doesn't open a magic door where suits can be filed on day 46. You still need a reasonable good faith basis translation evidence to file a case.

So, what will happen now is lawyers will start approaching families asking if they, you know, wanted a sign up et cetera but to bring a suit in, lots of people talking about suing Boeing. But to bring a suit against Boeing, you're going to have to get some evidence. The airline is going to be automatically liable because they cannot show that they are not the burdens on the airline basically to show that.

So the airline is going to be liable automatically. You will need a death certificate probably to start that process. But Boeing is going to take evidence. Along with other manufactures and component manufacturers on the plane, that's going to have to wait.

WEIR: All right. Mary Schiavo, David Soucie, thanks again.

We're live to South Korea next, where searches have reached the sunken ferry's cafeteria where many passengers gathered as that doomed vessel went down. We'll have the latest on what they find.

Also a money guru, Dave Ramsey is here later with his daughter and a tantalizing roadmap on how to get your kid through college, debt free.

(COMMERCIAL BREAK)

WEIR: We're getting word now that divers are searching the third and fourth floors of the sunken ferry off coast to South Korea today have found bodies on the fourth floor. Visibility is so poor in this area. They say they can't see their own hand waving in front of their face. And meanwhile, on shore desperate families waiting a week after that ferry ship sank.

CNN's Kyung Lah is live once again for us on a boat off of Jindo, South Korea in the Yellow Sea tonight. Tell us the very latest on the rescue. I guess it's mostly recovery efforts now, right?

KYUNG LAH, CNN NATIONAL CORRESPONDENT: Yeah, they're not using that word yet though because of the high emotions of who the people are, who are waiting on shore, that being the parents and the victims being just children there. And many cases they're only children.

I have a little more information that we're getting from the authority here as well, Bill. We are just learning that they have gotten into the cafeteria, it was morning time. The assumption was that many of the people would have been eating breakfast in the cafeteria. There were no bodies there.

We don't know what that means. We just know that they have gotten to the cafeteria, there are no bodies there. They don't know where everyone else is. So this is going to take quiet a bit of time to go through this entire vessel.

And just to give you an idea of what's happening here as far as the search, it's an active search. You can see that what we're in the middle of here is an oils slick. The authorities had been telling us that this ferry was releasing oil intermittently and certainly it is everywhere here.

If you look a little further out, that is where the ferry is. That's the source of the oils slick, about 65 feet below is where the vessel has sunk to the ground. There is a buoy there in the center of your screen. It's off light, it's very difficult to make out, but that is where it marks the spot where divers are going to begin going down. There are divers, they are working incredible shifts. They have these orange inflatables that take them back and forth among the waiting ships and it is challenging worth.

Bill, you mentioned that you can see anything in front of your face not more than a foot, that is certainly making it very dangerous when you consider -- we're talking about a passenger, almost a passenger crew ship and the number of items that are floating around in there, so very dangerous work. Bill.

WEIR: We've spend so much time in the last few days, Kyung, talking about things that went wrong, the malfunctions, and sort of malpractice of the crew, the captain in particular, many of them in custody. But we missed the story of heroism. Tell me about Park Ji Young.

LAH: She is really someone who has inspired the word Good Samaritan that phrase Good Samaritan and a bright spot amid a mid crew that's really being lambasted that this is our country. What she did is according to numerous witness accounts she wasn't wearing a life jacket. She made sure that everyone she saw had a life jacket. When someone said, "Why don't you wear one?" What she said was, "Passengers first, crew last."

That is a sort of behavior that people here in this country expect of a Captain did not get it. So what we're seeing here is a lot of pain, a lot rage that this young woman who is so special and beloved in this country now that she appears to have been so rare among this crew. Bill.

WEIR: She didn't not survive. She was buried with honors and respect justifiably. So Kyung Lah, thank you for that.

Let's bring in our experts now, Mario Vittone is a helicopter rescue swimmer, Mitchell Proner, an attorney for the victims of the Costa Concordia disaster two years ago. Gentlemen thanks for being with us.

Mario, let's talk about the difference between rescue and recovery as Kyung said they're trying to lift, you know, keep the spirits up for those parents waiting on shore. But there's a real danger there, isn't there?

MARIO VITTONE, HELICOPTER RESCUE SWIMMER: Well, there and I think, you know, given the operational tempo of those divers that she mentioned. And the enormous pressure there under to do that work, I think it's going to be very important that they come to grips with -- they need to start calling it recovery, because that will change that up tempo, the fatigue they're under, the pressure they're under. And because on a long enough time now we're going to talk about hurt for worse divers and no one wants that either.

So they're going to have to -- I think soon decide to say, "Yes, it's a recovery." And that will change the way they approach it and I think it's time for that to happen.

WEIR: Help us understand what these divers are going through right now. Just the currents there, the water temperature, the visibility, how difficult is their task?

VITTONE: Well, difficult is one thing, this is extremely dangerous. They're basically cave diving in an unknown cave without any visibility, which is as hazardous a diving operation as I can imagine. So -- and they're going to do it because again they're under pressure. And no one wants to find people more. That, you know, there was -- the initial reaction that they weren't doing enough.

I don't believe that for a second. I'm certain -- I know the way these people think and they want to find somebody alive and they wanted that more than anybody. And they're not going to give up until they're told to stand down and be more careful. And I think that needs to happen next.

WEIR: Mitchell, the Costa Concordia was what, a couple of years ago now?

MITCHELL PRONER, ATTORNEY FOR COSTA CONCORDIA VICTIMS: January 13, 2012.

WEIR: You would think that would have been a cautionary tale for the maritime industry but you're seeing eerie parallels there.

PRONER: The similarities are striking from the Captain's error, the -- even the search and rescue operations that's being described now, it was -- it's eerily similar when the Costa Concordia sank you have the same scenes of family members wondering what happened to their relatives. And divers going in with those ropes, they called them the threads of Ariadne after the mythological character who had to get through the labyrinth to the escape from the minotaur.

And it's the same idea that you're going into the dark, you're looking for divers that are experienced in saving people or rescuing people or at the worst case scenario, finding drowning victims who were swimming or are in bathing suits. In these incidents, you find victims that are wearing life jackets, because they were prepared to get off a ship and they never got off ship of errors. Errors made by the crew, errors made by the captains, errors made by the life boats that failed to launched.

With the Costa Concordia, very similar to ...

WEIR: Yeah.

PRONER: ... this Korean ferry, the ship begun to list immediately. And what happens when a ship -- happens -- and a ship begins to list their inclines, the life boats that would normally drop down can't drop down because they got stuck on the side. And in both scenarios you had distress calls coming from passengers. In the Korean ferry, we heard about a young boy.

WEIR: A boy, yeah, maybe before the bridge ever called for help, it was boy in his phone.

PRONER: I dealt with family members in the Costa Concordia case where they had calls form relative saying you're going to see some nasty things in the papers.

WEIR: Yeah.

VITTONE: Don't worry I'm going to get home. And they never made it home.

WEIR: Real quickly Mario, you think that the Captain of this ferry has been demonized unfairly, why?

VITTONE: Well, I'm not sure about unfairly. I think that -- I think there's a mistake in making that kind of behavior, the devil. Here's what I know for sure about that Captain. Two weeks ago if you asked him, "Hey, what would you do if your boat was taken on water enlisting and you didn't think you could stop it?" He would have told you then I get everyone in life jackets, take them to the master station.

A year ago, he was talking about the Costa Concordia thing I would never do that. But still, when the emergency faced him, he did it. There's this disconnect between what people know to do and what they actually do in an emergency. And I think the maritime industry needs to adopt some of the aviation industry's practice in practicing under stress, in practicing, "How do I react when things are really bad?" Because if he did drill every month on life -- on abandoned ships it would be, "OK, let's do the abandon ship drill."

And everyone walks to their station under no duress at all, and they check the box on the drill. That's not how it happens in real life. And those drills need to happen that way and that's what missing. That doesn't necessarily make him the devil. That makes him human and we haven't train that out of him yet like we have in other industry like in the military or in aviation.

WEIR: I'm afraid -- I can see your shaking your head and we loved to continue this, unfortunately we got to move on. But please come back. I'm ...

PRONER: Thank you.

WEIR: ... sure your story won't go away. Mitchell Proner, Mario Vittone much obliged.

When we come back, a crisis of a different kind, what is happening in Eastern Europe? President Obama sending army paratroopers to Poland just across the boarder from Ukraine, will that get Vladimir Putin's attention? I'll ask two generals next.

(COMMERCIAL BREAK)

WEIR: Welcome back to CNN Tonight, I'm Bill Weir.

And it was another day of sobering news out of Ukraine, where armed and masked pro Russian militias were suppose to give back the government buildings they've occupied after an Eastern troops was forged in Geneva last week. But they show no signs of leaving.

And take a look at this video. It is reportedly from the YouTube page of the City of Gorlovka and it shows a man who appears to be a local politician named Vladimir Rybak attempting to enter city hall and re- raise the Ukrainian flag. Instead, he was roughly turned away, later disappeared, and Ukraine's acting president now claims his lifeless body was found showing signs of torture.

CNN's Fred Pleitgen is in Kiev now, live with more. Fred, this was one of two bodies they say was found. What's the story?

FRED PLEITGEN, CNN CORRESPONDENT: Well yeah, these bodies apparently, Bill, were found in a river near the town of Slaviansk which of course is one of those places that's actually held by this pro-Russian protesters. And as you said, they apparently saw signs of torture on these bodies. And this was really only one of several incidents that happened today that really escalated the situation there in the East of Ukraine further. The other thing that also happened is that pro- Russian protesters took over another police station in the east of the country. That brings the towns in the East of Ukraine where these pro-Russian protesters have taken over government buildings to 12.

And also, and another pretty big incidence, a fire was apparently opened on a surveillance plane of the Ukrainian air force that was flying over one of these towns. Apparently, the plane sustains bullet molds and that's causing the Ukrainian government now to say that they are going to relaunch an anti-terror operation that was actually put on hold. They say they want to send military units into that area. It's not clear, however, how harsh, how forceful these military units are going to try and go in to get these protesters out of those places because at the same time, of course Bill, you have a whole Russian army or a large parts of the Russian army on the other side of the Ukrainian border at anytime apparently poised (ph) to enter Ukraine and possibly invade that area as well. Bill.

WEIR: The last time they sent troops in there, they ended up handing over the keys to the armed personnel carriers and watching these guys do donuts (ph) in the middle of the street.

Fred Pleitgen, thank you. And now, let's bring in two men who know more about military maneuvers and just about anybody. A Major General James "Spider" Marks, Former Commanding General of the U.S. Army Intelligence Center. Also General Mark Kimmitt, Former Assistant Secretary of State for Political-Military Affairs.

General Kimmitt, let's start with you because we talked about -- we were doing this story last week and you are pretty adamant in your belief that American troops should be going in to answer this aggression. Can you stand by that?

GEN. MARK KIMMITT (RET.), FMR. ASST. SECY. OF STATE, POLITICAL- MILITARY AFFAIRS: Well, I do. And I don't say that we should be answering the aggression. What I'm saying is that we have to be showing a visible sign of deterrence so that President Putin understands that if he makes a decision to invade Ukraine, he not only is facing the sovereign country of Ukraine, but the United States of America and its European allies.

WEIR: How would you order that or what would it look like and are you -- don't you have fears of escalation?

KIMMITT: Well, I think, I have more fears of current escalation. The fact that what we're seeing on the ground now could lead to provocation that could be used as an excuse by Putin to go ahead and do that invasion which would take probably no more than three to five days to complete. And at that point, he then has brought Ukraine back into the Russian orbit.

WEIR: General Marks, what are your thoughts? Do you agree with this?

MAJ. GEN. JAMES 'SPIDER' MARKS (RET.), CNN MILITARY ANALYST: Well, I agree with Mark. Let's definitionally (ph) make sure around the same page here. Russia has invaded Ukraine. Crimea has been annexed. And arguably, I think our intelligence is very clear that what we see taking place in Eastern Ukraine is instigated and being carried out by Russian forces. So, the invasion of Ukraine in essence is ongoing right now.

And I think what's important to Mark's very point is the United States has to demonstrate resolve. I don't think it's time for the United States to put forces or boots on the ground, but we can increase our naval attack presence in the Black Sea, we can increase our air force presence -- all NATO members can increase air force presence in exercises on the ground in Europe. But I think it's also important for a very strong message to be made to Putin right now that says, look, you've got complete authority to have this exercise if you will North of the Ukrainian border in your sovereign territory. But it's a strategic message that you're sending that's completely destabilizing. If he could disarm those guys, get those forces to pull back, that would be a good first move so that we could deescalate and then the Ukrainians hopefully could take care of what's taking place inside the country.

WEIR: And General Kimmitt, it was announced today, Vice President Biden was there in Kiev. They announced that $50 million aid package, lot of 11 million for the upcoming elections to help for that. But also, this idea that paratroopers are going to send them in the Poland, Lithuania, Latvia, Estonia, are these half measures in your estimation?

KIMMITT: Well, I think there's symbolic measures. We're talking about a hundred paratroopers into each of those countries. And in fact, I'm concerned that the wrong message will be sent that we're willing to put American troops into the NATO territories but we're not willing to put troops into friendly territories such as Ukraine.

We made a mistake in 1950 when we said we will defend up to the Japanese waters and the Russians interpreted that as us giving away South Korea. And as a result, the Russians and the Chinese invaded South Korea. So for us to say we'll protect Estonia, we'll protect Latvia, Poland, (inaudible), what it says implicitly is what we want to protect and what it says we won't protect Ukraine.

WEIR: And let me (inaudible) another story, Major General Marks, we just got a word. We're getting more details on these Yemenis Special Forces operation against that Al-Qaeda jamborees. I saw the YouTube video ...

MARKS: Right.

WEIR: ... and it looks like U.S. special forces actually piloted the Russian-made helicopters, that's according to our -- report of Barbara Starr of the Pentagon, piloted the helicopter that flew Yemeni commandos to the raid on that Al-Qaeda stronghold. This -- yeah, we're talking about the video last week and what the response would be to this. What are your thoughts on this -- it seems like a successful operation.

MARKS: Well, the reports that we've got in the open source certainly are very successful. The fact that there were Yemeni commandos that were on the ground. Number one, they were trained, number two, they are available, and number three, they were able to be inserted, and if the United States did the insertion, what that tells you is they were trying to get their hands on some key leaders so they could bring them back and exploit them. In addition to the drone strikes that took place which clearly were intended to kill some key leaders as well. I think this is a very good sign. Clearly, Barbara has got great reporting and great access. So, I would certainly give her report a great credit and it was of success.

WEIR: All right. Major General Spider Marks, General Mark Kimmitt, thank you both for your expertise.

We come back ...

MARKS: Thanks Bill.

WEIR: ... he is one of America's favorite money gurus, Dave Ramsey and his daughter, the one he raised to be an equally brilliant with the dollar. One hands up (ph) for raising your kids. No more allowances. How your little ones can achieve financial peace and take care of you in your elder years. When we come back.

Good to see you guys. Welcome. Come on up. Good to see you Dave. Come on over.

(COMMERCIAL BREAK)

WEIR: If heaven forbid, you had to pull together a thousand bucks for an emergency, could you? Well, if not, you are not alone. Almost two-thirds of Americans are in similar straits almost a quarter of the adults in this country have no savings at all. And if that's you, chances are, you can throw some blame at your money ignorant folks. But money guru Dave Ramsey wants to break that cycle in his proof that he practices what he preaches. He's here with his beautiful daughter, Rachel Cruze and their first book together is "Smart Money Smart Kids." Dave, Rachel, great to have you here.

DAVE RAMSEY, HOST, "THE DAVE RAMSEY SHOW": Well, thank you.

RACHEL CRUZE, CO-AUTHOR, "SMART MONEY SMART KIDS": Thank you.

RAMSEY: Thanks for having us.

WEIR: I've always listened to you on the radio. I've been a fan but I didn't know your story. I didn't realize until I read this. And when she was born, you went bankrupt?

RAMSEY: Yeah. The year she was born, we hit bottom. We have started with nothing. My wife Sharon and I and -- just climb and scratched our way out, start buying real state, but I got rich, at least (inaudible) for many are Tennessee standards. I ended up with about $4 million worth by the time I was 26 years old ...

WEIR: Nice. RAMSEY: ... almost her age and -- but we've borrowed too much money. The bank got sold to another bank. They called our notes which with the two and a half years of our lives losing everything we own.

WEIR: Wow.

RAMSEY: So, the year she was born, we filed and at the bottom.

WEIR: And that was to come to Jesus moment sort of financially and redo it religiously a way at the same time and I know it was biblical principles. What is your first memory of money as a thing in your home?

CRUZE: Sure. I mean, well, early memories of going to like consignment fails, right to buy clothes and not going to a store, not going out to eat, staying at home, and hearing the word "no" a lot. So that's why were money became a thing is that -- is here I know we're not going out to eat. No, we can't go buy this. So, we learned very early on that money is finite.

WEIR: Little bit of discipline there.

CRUZE: Yeah.

WEIR: So what's interesting is, I'm telling you Dave, this is very smart because this is a parenting book. This guy (ph) does a money book.

RAMSEY: Yeah.

WEIR: And because you later say, we don't have a debt crisis. We have a parenting crisis in this country and talked about limitations and stuff. So school me, I got a little 10-year old. He gets an allowance ...

RAMSEY: Good.

WEIR: ... but that's not good you would say. An allowance sends the wrong expectation.

RAMSEY: I just don't like the word. Allowance kind of sounds like you're not good enough so I have to do something for you. It kind of feels like welfare or something. Instead, we called it commission. It's still the same thing. You got paid ...

WEIR: Yeah.

RAMSEY: ... for doing chores, right?

WEIR: Chores, right.

RAMSEY: Well, we just called it commission, work get paid, don't work, don't get pay. I'm now 54-year old to don't know that.

WEIR: It's a basic (inaudible).

CRUZE: One for us, we learned that money comes from work and money doesn't come from mom and dad's back pocket.

WEIR: Right.

CRUZE: And so, by doing that with your kids, they do associate work and money.

WEIR: And so, early on, when she was little, you would take the $1 commissions and make is visual, right? Put them in a jar say this is -- and it's instantaneous pay, don't wait till pay (inaudible) on Sunday when they're that young because you want to set that reward.

RAMSEY: And when we're talking about, any of these things are age appropriate, work included, we're not going to send a four-year old with the salt mines. You know, these kids are going to ...

WEIR: So faster.

RAMSEY: This kid is going to pick up three toys and mom and dad picks up the rest of the toys and he's the best room cleaner on the planet.

WEIR: Right.

RAMSEY: And so, you get the dollar right then because they are very, you know, they're not going to wait till the end of the week, right then ...

WEIR: Sure.

RAMSEY: ... you want it up. So it takes up more room and you put it in that jar and you lay it build up. So when you got a toys with them, you know you got something to -- you got some money to take with you.

WEIR: But they were getting little older to understand, you got the three envelopes, you got your spend, you save, and you give envelope, right?

CRUZE: That's right. Exactly. Yes. So when your kids get paid and they, you know, this is around six to 13 years old then you do that one night a week so they learn delay gratification, they don't get paid instantly and then your building these three muscles if you will with money. You're teaching to give first save seconds then third.

WEIR: I love the story where you had your first checking accounts when you get little older and now you got to learn how to manage finances, you bounced a couple checks.

CRUZE: Yes.

WEIR: And what did he make you do?

CRUZE: Yes. I bounced a check. So he made me go down to the bank and apologize to the executive bank branch manager for lying to him because I told him I had money in his bank to spend and I didn't and (inaudible) three checks then they found. So, I lied.

WEIR: What a lesson.

CRUZE: I know.

WEIR: I don't see you one (ph). Did you called the bank guy first?

RAMSEY: No.

WEIR: You just dropped her out to the bank?

RAMSEY: Her mom took her but she have bounced the check since, it worked.

CRUZE: That's right, that's right. Lesson learned.

WEIR: And you helped them get a car but not the whole thing?

RAMSEY: And we told them that ahead of time. You know, we'd start telling them about 10 years old. We'll pay for half your car. We called it for a one-day (inaudible), right? And some parents can do that, some can't. But whatever the lesson, we're learning to set goals that are bigger, save longer as we get older. And I'll tell you, I have it, but I had to pay for my first car and you drive a car differently when you pay for it.

WEIR: Your son saved so much money when you let him buy an expensive car and have given the extra money as a disaster relief.

RAMSEY: He did.

WEIR: You're doing it right.

Stay with us. When we come back, I'm going to talk about something all parents want to know. The five secrets of paying for college without borrowing a ton.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RAMSEY: OK, count it down. A $142,000 at 29 months paid off. Let's hear a debt-free scream.

UNIDENTIFIED MALE: Three, two, one. We're debt free.

UNIDENTIFIED FEMALE: We're debt free.

UNIDENTIFIED MALE: We're debt free.

UNIDENTIFIED FEMALE: We're debt free.

UNIDENTIFIED MALE: We're debt free.

UNIDENTIFIED FEMALE: We're debt free.

(END VIDEO CLIP) WEIR: The emancipation yell and the famous Dave Ramsey debt-free scream. We're back with one of America's favorite money meta-analysis (ph), daughter Rachel Cruze. Their new book is "Smart Money Smart Kids." Trying to raise kids that never have to yell debt free because you don't want them to get there in the first place and a lot of that has to do with boundaries. You talked about, in the book, everything from the car to your wedding budget, you know ...

CRUZE: Yes.

WEIR: ... for how much you could spend. But also college and this is crazy. I mean, look at the statistics. The average college debt in 2014 in United States of America, $33,000, that's twice with the credit card debt. So usually, people have that on top of the credit cards. What's going on?

RAMSEY: Well, you got to keep in mind, that's that average which that means that a whole bunch of people have zero, so a lot of people that rich one (ph) I meet are carrying $60, even a $120 with the credit -- college debt and it just gotten out of control.

WEIR: But first, let me start with you think is an obligation for parents to send their kids in college.

RAMSEY: In paying for their kids for college?

WEIR: Yeah.

RAMSEY: If you can. It's something -- it's a wonderful gift but it's not an obligation. I mean, we worked with a lot of single moms. 52 percent of them live below the poverty level. And if they feed their child and give them clothing and housing, that's their obligation. They did a great job. So kudos to that single mom who's working two jobs to pull that off and I'm not going to throw a guild (ph) trip on her about, it's her obligation for college. But, it's -- our parent's obligation to do the best they can for their kids in every way. That's called being a good dad or good mom.

WEIR: I didn't pay off my student -- my last student loan until I've figured it out today reading these 16 years after graduation.

RAMSEY: Yeah.

WEIR: And I was, you know, doing OK in television at that point. But the way I justified it at the time was that's what student loans are for. So I can get a degree, get a great job, and this is a, you know, this is the cost of this. But, you guy say no, that's the wrong way to think about it.

CRUZE: So it's kind of been normal mindset if you will, but you see how much money, you know, when you make that first income, how much goes out that student loan payment. And then the credit card, I mean, average college students, (inaudible) cost to $5,000 in just credit debts at the college student. So it's all, you know, your paycheck leaves when in your debt. And when you don't have any payments, it's amazing how much you can give, you can save, you can invest with your income.

WEIR: Well, give me some tips, I mean, one of them is be reasonable. Some go to a private school out of state if the local college ...

RAMSEY: You can't afford.

WEIR: ... that you can't afford them.

RAMSEY: Go to where you can afford. That's why we kind of say student loan problem is a bit of a parenting problem because it's my job as a dad to guide my 18-year-old son, my 18-year-old daughter. And say, son, you know, don't go a $100,000 in debt or $60,000 in debt when you can go to this school over here and it then cost you many, I mean, no debt. You can -- it does cost you but you can work in a way through that -- the family can help you, we can get you through this one with no debt, and the difference of where you go to school, it's very difficult to find any research that says that's why people succeed.

WEIR: So pick a school again, nobody asks. Don't ever ask.

CRUZE: Right.

RAMSEY: I've gone through a lot of doctors. I never asked them where they graduated from or lawyers even.

WEIR: Yeah. But that does mean that you should sort of pick a school based on the kind of financial aid package you could get?

RAMSEY: That or instate -- and some states are now paying for the community college. The first two years, you can do that, the college choice, the spectrum of price is astronomical. Now again, if you have the money, I don't care where you go.

WEIR: Yeah.

RAMSEY: It doesn't matter. But if you don't have the money, don't go in debt, make better choices and moms and dads, they've got to love their child enough to say no. This family is not going there.

WEIR: Do you think if you haven't gone broke, you would be as savvy as you are now? Would you need that?

RAMSEY: Oh, I've definitely not.

WEIR: (Inaudible).

RAMSEY: But, you know, pain is a thorough teacher but it's not my recommended method.

WEIR: Avoid if you can. Well, before we would let you go, when we come back, 10 Things Americans Waste Money On. I wonder how many of this. I am buying an hourly basis. Stay with us Dave Ramsey and Rachel Cruze.

(COMMERCIAL BREAK) WEIR: And we're back with Dave Ramsey, his daughter Rachel Cruze. And one more list to go over. 10 Things Americans Waste Money On. Credit card interest, yeah, we get that. ATM fees, annoying. Appetizers. I can have the pot stickers.

RAMSEY: You can have anything you want to have. It's just a matter of where you -- what you're going to do with your money. You don't have to stop and think. And a lot of this applies to when someone's really working to get out of debt. They're on a tight budget, really.

WEIR: OK.

RAMSEY: Some things are straight up waste and none of us want to do them. Other things are just things you got to tighten up in order to win.

WEIR: You got designer baby clothes.

RAMSEY: Yeah.

CRUZE: Yeah.

WEIR: Also known as "glorified stain gatherers."

CRUZE: Yeah, right, right. Unused gym memberships, yeah, premium cable packages, daily coffee trips. Now, you're cutting to the question.

RAMSEY: All of us, all of us got that one, right?

WEIR: We're at it, we're at it.

RAMSEY: Yeah. We are.

WEIR: What do you say to somebody who watches this and think there's just no way I could do that debt -- "I'm debt free scream." You know, I'm underwater. The job just pays so much. What do you say?

RAMSEY: You know, anybody can do this stuff. It's just a matter of how long it takes and how much work you're going to do and how deeply you're going to cut. It's a pretty simple form, divides your income versus your outgo. And people can (inaudible) stuff. We've had people with all incomes over the 25 years I've been doing this and we've had parents that aren't perfect to raise kids. As a matter of fact, all of us that are parents aren't perfect to raise kids and you can raise money smart kids doing that.

WEIR: And do you think you're going to pass this on to your -- his grandchildren going forward?

CRUZE: Yeah, I think I have to. (Inaudible) Absolutely. Because, you know, I -- as like mom and dad set me up well, where I had a solid foundation under me that I could as an adult go out of my own and win. So, that's our hope with this book as the parents can give their kids that solid foundation as well. WEIR: Yeah. The radio show, books, speaking tour, you're doing a speaking tour, you feel like -- what is the most gratifying part of your job?

RAMSEY: I enjoy all of it. The whole thing is just to get to meet folks like, you know, in a book signing, we get to run in these folks and they say, gosh, you know, we went to your class and it cost us to save our marriage or it gave us hope, and you know, we don't think we could win. We thought we were down and out.

WEIR: Yeah.

RAMSEY: And we don't have a magic beans or anything, we just show people step by step what to do and they believe it and then they go do it.

WEIR: It is a plan. A budget.

RAMSEY: Yeah.

WEIR: Played (ph) gratification, who knew? America.

Rachel Cruze, Dave Ramsey, great to meet you guys. Thanks ...

CRUZE: Thank you

WEIR: ... so much.

RAMSEY: Thank you.

WEIR: The book is called "Smart Money Smart Kids." And that's it for us tonight.

CNN's Special Report: The Mystery of Flight 370 with Don Lemon answering all of your present questions starts right now. See you tomorrow.