police stopped a man who was writing on the walls of the station. you see the commotion happening on the left. people start to spread. the crowd finally starts getting hustled out. two officers ended up dead and the gunman finally wrestled to the ground facing charges. betty will be at the back at the top of the hour. we head to gerri willis and "your bottom line." hello i'm gerri willis and this is the show that saves you money. the latest in health care reform what, the proposals mean to your bottom line plus breaking out the truth-o-meter and winterizing your home, it's not too early to get ready for the cold weather ahead and save big one. and when to financially bail out your kid on campus, when it's appropriate and whether they should go it alone. "your bottom line" starts right now. it's been one year since the collapse of lehman brothers which helped push the economy

into a tailspin. this year seemed endless but some good has come out of all of it. valuable lessons about spending and saving and what we need to work on when it comes to personal finances. here to help us today two of our favorite people, ryan mack, president of optimum capital management and lynnette khalfani-cox, welcome to both of but >> thank you for having me. >> lynnette, what are the lessons we've learned here? >> we can't take risks we shouldn't be taking, overextending yourself with credit and debt, "leverage" as they say on wall street. for consumers one of the big lessons i'm glad to see we've learned we've got to save and get back to basics and we're seeing that reflected in the numbers. people are, in fact, saving more, after so many years, where the savings rate was flat to negative and that's a good thing. >> that's definitely a good thing. what would you say? >> savings is one of the top key

issues, when individuals say emergency fund and making sure that it's that much more important, 9.7% unemployment rate, a lot of people losing their jobs, six to nine months of living expenses is imperative. if it costs you $2,000 to support yourself in a given month you need to save $12,000, seems like a whole lot of money. make mohills from your mountains. divide it up aand get that emergency savings. >> it takes small steps and you'll get to your goal. >> exactly. >> i think there are still some lessons out there we probably haven't learned and still struggling with that and one of them has to be about credit cards and credit scoring and this is still such a tough topic for so many people. lynnette what, would you say about credit scoring? this is a mist troy so many people. >> right, i think that consumers haven't yet gotten used to the fact that we're in an entirely new credit landscape and i think this is going to be a changed environment for years, if not decades to come. and so one of the things i think people need to do is to recognize that, yes, we're in

this short term period where banks are raising interest rates, tacking on additional fees, slashing credit lines, but you need to be vigilant about every aspect of your credit. every single transaction is what i'm telling people, every single transaction counts. pay that library bill on time. pay those, you know, student loans and mortgages and credit cards, et cetera, but don't forget about the small things, too, like your cell phone or your utility bill because you don't want something seemingly small to ding your credit rating and hurt you down the road. >> they're pulling in credit card lines, credit card issuers are raising interest rates, this is hurting a lot of people, people want to start their own business and finance it by credit cards. >> right. >> i want to talk to you about 401(k)s and to do that, i want to show people, some numbers folks out there some numbers about what's gone on with 401(k)s. we've had a rebound this year on average 401(k)s are up about 12% this year. it's cold comfort for people who had major losses last year.

what do you stye people trying desperately to save for retirement now? >> in your 401(k) plan it's crucial to understand you've been talking about the time dollar cost averaging is crucial and those individuals who bailed out in january, february, even all the way up into march, thinking they would not tie the market they've missed almost 54% return on the s&p 500 on the way back down, so those individuals who bailed out, they now know the difference between real and paper losses. they locked in some of the losses so have a long-term strategy. make sure you're allocating assets appropriately. if you're 25 and maybe you might have a 90% stocks, 10% bond asset allocation but if you're 55, that shouldn't be necessarily the allocation that's appropriate for you. so looking at your 401(k), at least once a year to make sure you have the appropriate asset allocation moving forward is the best thing to do. >> windfall opportunity really for a lot of first time home buyers to buy but my guess is people will make mistake overbuying. lynnette what do they need to know? >> if you can take advantage of the $8,000 tax credit before

december 1st, do so, close on the mortgages, if you're close to doing that. realize that it's not just about principle, interest, taxes and insurance. so many homeowners think i can afford the mortgage because the bank said so and these are the costs i have to pay. think long-term about maintenance, repairs, upkeep, decorations, furnishings. >> insurance. >> all of those things contribute to the overall cost of owning a home and so don't just be taken in by the fact that oh i have to pay "x" amount in principle and interest for the loan. >> cautionary words about the tax credit, what would you say. >> we have to make sure the driving decision in all of our decisions is not because we're getting a tax credit or a tax deduction on trt we're paying on our homes but we want to buy homes. have we looked and researched and figured out exactly how much home can we afford? have we done due diligence getting our fico scores to 750 or higher. let me go out and get this new

home because i can get $8,000. you might not be ready to purchase a home now and might not be the right time for you. renting can be good if you're renting with a purpose and saving your money diligently and getting yourself prepared to purchase a home responsibly. >> it's a bigger deal than you think and costs a lot of dough. thanks for your help today and of course we remind people, the recession may be close to over but you've still got to be careful with your money. all this health care news can be confusing. there's this plan and that plan, and that's why we're here. we're going to separate fact from fiction when it comes to your bottom line. readying your home for the winter month ahead. it's not too soon to save big money, next. m is shown to regrow hair in 85% of guys. i'll check it out and i'm like, nice. (announcer) rogain foam. stop losing. start gaining. wouldn't it be great if it were easy to spot the good guys ? you know, the guys who do a super job. introducing the superguarantee. go to superpages.com to find a business with the superguarantee.

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health care, a new line from senator max baucus. let's get the latest from eamon javers, financial correspondent from politico in washington. >> thanks for having me. >> people are struggling to get their arms around this bill and it's hideously complicated, over 200 pages. let's talk first about how it's different from what president obama talked about in prime time just the other night. >> well, the key difference is sort of one that everybody expected to see. president obama has said he

favors the so-called public option in health care. that's a government-run program that would exist side by side with private insurance companies. obama thinks that's the way to go. senator max baucus on the hill, however, ditched that idea, and instead comes up with something else all together called public cooperatives, which would be non-profit health care companies that would be an alternative to the private industry, that's a big difference in tone and largely done because most think the public option simply can't get through the senate. there's not enough votes to do what the president wants to do. >> i want to talk about co-ops. the price tag, the president said any plan would have to not impact the federal deficit. can that possibly be true? we already have critics out saying no way. >> well, we are going to raise taxes to pay for this under the bill. the taxes would go, taxes and fees would go to different industry groups within the health care industry, so pharmaceutical companies, insurance companies, hospitals, all would pay new taxes and fees

to finance this thing. the $856 billion number is the amount of government outlays that would be incorporated into this plan, but what both baucus and obama are saying is that it would be deficit neutral, net-net it costs the taxpayers nothing to do this, because of those fees, and also because of savings, they say, they can find in the current system. there's a lot of waste, fraud and abuse, for example. there's a lot of economies of scale they can get so they say they're going to save money and cost you nothing to do this. >> right, i guess the devil will be in the details. >> as always. >> we'll see if it works. >> right. >> co-ops, this is probably what a lot of americans will end up using at the end of the day, these non-profit exchanges really where you would go and choose some kind of health care, if you don't have one, from an employer, right now. >> right. >> what does that look like? >> what the bill lays out is a system of exchanges where you can go online and look and see, compare price and level of

coverage and all the different details of health care, which are so complicated to have that all in one place to compare and do some shopping, it could be helpful for americans, and one of the options they would consider would be these non-profit pools of insurance whereby people could get insurance not from a private for-profit company, which is charging extra money to make that additional profit margin but from a non-profit that would insure a large group of people, designed to put pressure on the for-profit companies to lower their costs of health care and provide some competition, some cheap competition so that more americans can afford their health care insurance. >> fascinating stuff. can't wait to see what's going to happen. i'm sure we'll have you back to talk about that. >> more coming. >> one note to viewers about these co-ops, all of these changes, open enrollment is coming up soon, you'll be choosing your new health care plan you'll not have to worry about these issue this is fall because this is a long way off. thank you so much >> thanks a lot. now thaw know the latest from washington when it comes to the make or break issue of

health care, time to check in with politifact and their truthometer. angie holin is the health care writer for politifact. thanks for joining us. great to have you here. >> thanks for having me. >> let's get right down to this. you have great stuff that we really want to get to. the first statement comes from the president, president obama, who says, preventative care saves money. okay, can we save money by having everybody take a lot of different tests? >> we rated this statement false, and it sounds counter-intuitive. [ buzzer ] it does sound counter-intuitive. common sense if you catch something early you save money but when you're talking about health care reform and talking about testing everybody in the country, many studies have shown that it's not a cost saver. you have to account for the money you're going to spend to test everybody, so we rated this false. >> all right, the second statement also from the president, who says if you already have health insurance or

your job or medicare or medicaid or the va, nothing in this plan will require you or your employer to change the coverage or the doctor you have. true or false? >> we rated this true. and the reason for this -- [ dinging ] -- is that the plan goes out of its way to leave a loft the current health care system in place. so employer-provided insurance stays in place, medicare stays in place. there will be new consumer protection regulations, people who get insurance through work, those plans are going to have five years to come into compliance, but there is nothing in the bill that will force immediate change. >> all right, next statement from rush limbaugh what w.h.o. says the government is going to have the right to get into your bank account with the health care bill and make transfers without you knowing it. that sounds scary. is it true? >> we rated this barely true. there is a clause in the bill

that talks about creating standards for electronic transfers, and having to do with billing and payments. everybody we talked to said the intention here is to bring the health care system into the 21st century when it comes to ecommerce, similar to the way you might pay your utility bill online. there are no new writes for the government to take people's money. barely true. >> okay, so next statement comes from america's health insurance plans, and this is really written by the companies themselves, so this is the insurers talking, they say "every survey shows strong satisfaction with private coverage." in other words, if it ain't broke don't fix it. >> we rated this half true, and the reason for this is that the insurers have a point. surveys show that people who have insurance are either very satisfied or somewhat satisfied, and we docked them for that somewhat satisfied, and also because these surveys include

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winter will be here before you know it. here with tips and tricks to save you some heat and some cash this winter is our good friend, lou man fredini, home improvement expert and ace hardware's helpful hardware man. so good to see you. >> nice to see you too. >> the weather is getting cold. my windows what, a mess. what can i do to keep the heat in? >> remember this, windows and doors are your areas of greatest loss in a home. even after you put brand new windows in, it's natural obviously because of the glass. if you can, if it's within the budget, replacing your windows it's a terrific time because of the federal tax credit. >> there's free money to be had here. >> there's all kinds of that and it's up to $1,500. you need to stick with major manufacturers because not all of them qualify. there's certain criteria the windows have to have in order to meet it. you can't just go out there and get it. it's the "u" factor.

>> is that what i'm looking for? >> a 0 .30 "u" factor with i is the solar heat loss it has. >> i figure they're advertising for that. >> you have to manufacturers. if windows are not in your budget, you want to do something to cut those drafts. what i've done is prep this particular window. this is a brand-new window, you would never do this with a new one, but i put double-sided tape and i'm putting on a window film. >> you're putting plastic wrap on your windows. >> plastic wrap around the windows. this plastic wrap, i know it doesn't look like much right now. >> no. >> but once you tape this on and you use a hair dryer. >> let me get the hair dryer. >> i need it over here. >> okay. >> you turn on the hair dryer and what's going to happen it's going to is thshrink this so yo don't see it. it will tighten up so much you won't be able to see the edges. by cutting the drafts in your

windows, you can increase the energy efficiency of the drafty window by up to 70%. >> that's huge. why buy new windows? >> well, the problem is the look and the operation. if they don't operate, you might want to put that on your budget. >> let's get to doors. what do i do? >> same thing. weather stripping you can buy, go around the window or door. they make window kits that are larger for patio doors. keep in mind, when you do this and put it over the door, you're not going to be able to open the door. in an emergency, of course, you can rip through the plastic. caulking is another thing. >> old-fashioned but it works and it's cheap. >> the greenest problem in the new millennium of using caulking around windows and doors. it's one of the most effective ways to eliminate drafts in your home. >> i wish we could get some out, but unfortunately we can't today. furnace filters. this, again, is a really cheap way to make sure your furnace is

operating as efficiently as possible. these things not a lot of money. >> i don't want you to send the money on this. this is a 99-cent blue filter. they don't do anything for the indoor air quality of your home. you want to upgrade to either pleated filters, then you can go up even higher. these are all really good filters that do a nice job of trapping particulates in the air. but you have to change them regularly because when they get clogged the furnace works harder, uses more energy and it's also very important, too, gerri, to have your furnace inspected and cleaned by a licensed professional on an annual basis. it will cost you about $100, ben but then you'll have the peace of mind that over the winter months it won't clunk out on you in the middle of february and you have to get an expensive service call. >> i want to talk about my lawn because it's been an issue this year. i know there are things i can do at the end of the year to make it better for spring. >> winter and the fall is the best time to take care of your

lawn. rake up all the leaves and get rid of the thatch. then you'll put a winnerizing fertilizer. there are several didn't ones. the bigger bag is actually a natural product full of iron. it's actually made -- it comes from milwaukee county sewage. >> you don't have to buy things that are going to hurt the environment. you can buy things that are green. >> by doing that fertilization in the fall, it will promote healthy root growth and in the spring your lawn will come back more healthy, do a little spot seeding and start on the four-step program and you'll be the envy of the neighborhood. >> i have to figure out how to get you to my house. that's the next thing. thank you so much. >> my pleasure. still ahead, a helping hand when it comes to money. a college budget checkup every parent and child should watch. rogaine?

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you just dropped off your son or daughter and college and said your good-byes. you probably have a lot of worries. one of the biggest has to be whether they're going to rack up a ton of credit card debt. only 15% of college freshmen pay their balance each month. college seniors are graduating with $4,100 of credit card debt

and $23,000 in student loan debt. personal finance expert and the author of "get a financial life," beth, great to see you again. >> great to see you, gerri. >> i think the big worry out there is you don't even know as a parent what you're on the hook for. you have to know what that big number is. >> absolutely. no matter how much you prepare and give your kid all the lessons you think you can give them, you're still going to have to help. that's why it's so important to be specific and give them concrete advice. >> and know what they're spending to be able to track it. >> absolutely. you have to have a budget. know what they're spending their money on. is it beer, is it books, what is it. and that's very important. you might want to encourage them to get a job because a recent study showed that kids who have a job in college who work fewer than 20 hours actually have a slightly higher gpa than those who don't have a job. >> makes sense to me, i have to tell you. >> keeps you organized. >> the social life can be so expensive depending on whether you're in a fraternity or a vor

rr ti, the clothing bow yao buy, the beer you buy. how do you weigh that in? >> the national average for how much people spend, kids spend on their personal expenses is about $2,000 a year. but if you belong to a fraternity or a vor report ti, that can easily tack on $2,500 extra. you have to coordinate with that with your kids wp are you paying that or are they? food, the budget, dorm life is usually included in the price. if they're racking up pizzas every nigh, you have to talk about, wait, why are you doing this and let's make sure that that's an expense that the kid covers, not the parent. >> yeah. those conversations have to take place. i want to talk about credit cards for a second because you have a really interesting perspective on should kids in college have credit cards. now, as you know, the law is changing. >> right. >> pretty soon they're not going to allow credit card issuers to be on campuses marketing these products. what do you say? >> right. unless the parent co-signs or the kid can prove they have

income. how a kid is going to have enough income while they're in college is another story. don't get a credit card until junior or senior year. some people say rush and get one now before the rules change in february. i think freshmen and sophomores don't need credit cards. i think they get into a lot of trouble. the average freshman leaves with $1,000 in credit card debt. we have to re-educate young people that shouldn't be using, you shouldn't be getting into debt in college. >> and we want to tell people, too, that, you know, if your college student is banking, watch out for the fees. those atm fees are horrible. >> horrible. and overdraft fees showed that people 18 to 24 are paying $1 billion annually in overdraft fees. >> yeah. that is a scary prospect. well, we appreciate your help. thanks so much for the good advice. >> plimy pleasure. >> i know parents will really appreciate it. thanks for spending part of your saturday with us. "your bottom line" will be back next week on cnn.