>> there is something i want you to know about me. i am not into depriving myself, but i am cheap. you give me a half hour one after another, i'm going to show you how you can be thrifty and live like a king at the same time. >> ever since i can remember, i have been fascinated by money. making it, saving it, studying it. by the time i was 31, i earned enough to retire. so, i embarked on a new mission, helping you take care of your money, so you can save more, spend less and avoid getting ripped off. >> now from his radio studio,

your money expert, clark howard. >> you know what? we, as americans, can do so much more with less and it's rhetoric that we've all heard. maybe we've even talked it ourselves, but now we're walking the talk. and i've got proof in several areas. first, you want video entertainment? you can entertain yourself all you want for $1. i can't guarantee the movies will be good, but red box is booming. those are those fancy vending machines popping up all over the place where you can rent the late release movies. you know what? it's $1 per day. just don't forget about the thing, because it's $1 every day until you remember to return it. video games? i saw recently the rental of video games as an alternative to buying them is up 30% in the last year. again, another cheap way for you to have entertainment at home. and third, if you are in

college, going to college, or know someone who is, how about renting textbooks instead of buying them? probably never heard of that. there is a website called chegg.com where you can learn whether the textbooks you need for school can be rented instead of purchased. think about all the money you'll save. do you have money saving questions you want to ask me? fire away. >> what's going on with your credit card, beth? >> caller: about months ago, i closed one of my credit cards because it went over the limit just $2 and then they started charging me like 31% interest, even though i closed it. so, since i've closed it, they have charged me about $600 in interest. >> wow. >> caller: and they did a negotiation with me.

they said if i paid the $600, they would drop the interest to 0% and i could pay off my $2,500 balance at $50 a month, but i don't know if i should do that. i'm a homeowner. i own a home jointly with a relative and i'm wondering if they could ever put a lien against my home if i don't pay them for a while. >> let me explain how that plays out. >> caller: okay. >> if you have a credit card that goes into charge off and the credit card company wanted to really eat you up, what they would have to do is they would have to hire a law firm to sue you against the unpaid balance of the credit card, get a judgment against you and then having the judgment, a judgment becomes what lawyers call a license to hunt. they go out and try to figure out what assets you have. at that point is when it's possible that they might try to go after the home that you jointly own with somebody else.

>> caller: okay. >> that is a lot of ifs getting to the point where that would happen. here's what you do. you can have one more conversation with the credit card company, and then at that point, i would say no more conversations. you tell them here's my alternative offer. you agree to waive all interest and i will pay you on a payment plan and you will pay off the balance at 0% interest. >> caller: okay. >> now if they don't accept that and here's the offer you make. you either accept this, because i'm offering to pay you 100 cents on the dollar of the principal i owe you, but these are my terms. if you do not accept them, you will get not a single penny from me ever again. >> hello, marty. >> caller: hi, clark. >> how are you doing? >> caller: well, clark, the reason i called is i'm finding

myself in a mortgage dilemma that i'm not even sure is a real serious dilemma. i'm in a five-one arm that is going to mature in april 2012. it is 5.75% on the primary which is $200,000 and a second at $10,200 at 7%. the worth of my house dropped down to about roughly $235,000. everybody is advising me to get out of this arm and get into a fixed rate while the rates are down. i have been talking to lenders trying to figure out and i find myself choking on adding $11,000 into my note for the closing and -- >> closing costs lately have been off the charts crazy. >> caller: yes, sir. >> they have been really, really up there. you said the value of your home has dropped to? >> caller: around 235. >> and the first mortgage is at?

>> caller: $200,400. >> okay. so, your equity is down to 17%? >> caller: yes, sir. >> i think you've got some time. i think there is enough slack in the economy that you're okay to sit tight for a while before you would have to hit any kind of panic button as far as that arm -- you know, when we're looking three years out, that arm going crazy on you, 2012 and beyond. how long do you expect you're going to own this house? >> caller: we have no plans on moving. >> this could be a forever house? >> caller: yes, sir. >> here's your assignment. you told me that your work is still good. you're still making good money as an electrician? >> caller: yes, sir. >> you need to pour every dollar you can into paying down principal on that loan that would create more head room that

would give you the opportunity to refi. the market place took equity away from you. you are now going to have to rebuild that by paying down debt. >> next on clark howard -- >> a collection agency was pretending they were going to put your stepson in jail and were talking to you about the ticket? >> caller: exactly. >> do you know how much they have broken the law? >> i'm with my family in london and we're here why? well, because trips to europe are the cheapest they've been in eight years because of the sick economy, which means you can travel really well. hotels extra cheap and airfares extra cheap. in the heart of london, the london eye. on this side of me is big ben. the most famous tourist attraction in london.

one of my favorite ways to

save shopping in england is go to the 99 p store. everything is 99 pence, roughly $1.65 in today's exchange rates and they have a ton of good stuff in there. lynn is with us. hello, lynn. >> caller: how are you doing, clark? >> great, thank you. except you got one of those phone calls nobody wants. >> caller: sure did. >> tell me about this, if you would. >> caller: my husband and i received a call from a department stating they were calling from a warrant division and looking for my stepson. i said, "why are you looking for my stepson?" they said he owed $271 on a traffic fine. come to find out, this was a traffic ticket he received in 2001. that is correct, my stepson did have a traffic ticket. he went to probation. my husband ended up sell iing h car and paying the traffic ticket off. >> wow! >> caller: right. we explained that to them.

unfortunately we don't have any receipts. i did research and called back and called back. and i come to find out it was a collection agency. >> a collection agency was pretending they were going to put your stepson in jail. >> caller: right. >> and were talking to you about the ticket. >> caller: exactly. >> and do you know how much they have broken the law? >> caller: no, i don't. >> under the fair debt collection practices act, a clegs agency is not allowed to -- a collection agent is not allowed to impersonate a member of law enforcement, number one. number two, a collection agent is never allowed to talk to someone else about another person's debt. >> caller: okay. >> so do you have an answering machine that -- or do you use voicemail? >> i have an answering machine and i have the first call she placed to our answering machine. >> you do? >> caller: yes, i do. >> wow! okay. i want you to call the district

attorney or the solicitor in the jurisdiction where your stepson originally got this ticket eight years ago and offer to play the tape for the d.a. or solicitor. the collection agency operating on behalf of either the court or the jurisdiction is totally in violation of the law, and the district attorney should know that that's going on. how would you like for me to answer your money question? that's easy. all you do is go to cnn.com/clarkhoward and submit a video question to me. you'll see the link right on the home screen. speaking of asking me a money question, carmen has done so about her retirement plan. let's see what's on carmen's mind. >> i'm carmen. >> i'm ray. >> we need a money coach. my biggest concern related to

our finances is having enough money for retirement. i currently have a roth ira through my employer, and my husband and i each have one through the bank. i don't feel i need two because of the fees. i'm being charged a fee from the bank and then i'm being charged a fee through my employer. it's not a large amount of money, but i just think that it's money i can use to save and contribute to one roth instead of two. my question is, do i really need two roths? >> carmen, i love what you've got. it's a special kind of roth that more and more people will have over the next few years as a choice in a 401(k) plan. you can stay in the traditional 401(k) or make the decision you did and go into the roth 401(k). they are wonderful because you put in after tax dollars that will grow tax-free through the years and they will never be taxed again.

plus you are still eligible for whatever employer match your employer chooses to make. that goes in pretax dollars and that portion will be taxed. yeah, there is a fee embedded in a 401(k) plan and a management fee involved in the roth ira you are doing. you do want to do both because it gives you the double opportunity to save. i think it's great. why am i so hot on the roth 401(k) versus the traditional 401(k)? simple. you know what? you have a regular 401(k) and you put the money in. when you go to spend it in retirement, you have much less money than you thought because so much of it gets shaved away by taxes. you do the roth 401(k), a dollar in there is a dollar you get to spend in retirement. essentially, it means when you retire you have about 40% more money that you can spend than you thought you did.

>> next on clark howard -- >> you said you want me to direct you to a legitimate place to buy gold. which means you already know how many snakes there are in the grass who are out there pretending to sell gold or selling gold but ripping you off when you go to buy it.

as you have probably figured out by now, i am a very

opinionated guy, and it's all about you taking control of your wallet. if you go to cnn.com/clarkhoward and scroll down to commentaries, i have a variety of them there for you to see how to take control right now. now we are at the cheap way of seeing the bird's-eye view of london. we are at monument tower. had to walk 311 steps up from the ground. we have a view of the complete panorama of london. very much like the london eye but at one-seventh the cost. plus behind me, if you look over here, we have tower bridge and the tower of london. a beautiful view from up here. all you have to do is be fit enough to walk the stairs. every day when i'm doing research for my radio show, i go to cnnmoney.com.

you should too. poppy harlow is here from cnnmoney.com with some good money tips for you. poppy? >> hey, there, clark. trying to keep your small business afloat in these tough times can be a daunting task, but maximizing your company's website is a cheap and easy way to target your customers. here are three tips to help you do just that. first of all, focus on the content. consider the top three things that a customer would come to your site looking for and highlight those things on your home page. don't bury the information. bring the best stuff right out front. give a measure of free advise elevates your reputation and consider your site's design. slick effects and animations are great for making a splash, most consumers prefer an easy to navigate, clear to manage webpage that, well, they can use easily. for more tips on this, you want to check out

cnnmoney.com/smallbusiness. a lot of stories and tips right there. back to you. >> hi, andy. how are you? >> caller: not too bad. >> andy, tell me what you're thinking of doing. >> caller: i would like to find a legitimate place to buy the actual real gold. >> what if i were to answer your question not the way you asked it? >> caller: go ahead and i will see if it is something that is going to work for me. >> okay. i would much prefer for to you consider, instead of buying the actual tangible gold, that you buy what's known as a gold etf, exchange traded fund, where you will buy actual ownership of gold that will be stored for you off site, not in your possession, but you will have the value of that actual gold.

and with that, what happens is that you buy gold and you buy it with just money. then you buy it from an outfit that stores it for you and when you want to sell your gold, they take your gold and they sell it to somebody else. i know it sounds like i'm talking about some kind of scam or something, but this is completely legit. and then you don't have to deal with the storing of the gold. you don't have to deal with the big rip off they charge you to buy the gold. you don't have to deal with the big rip off when you go to sell it. here's the neat thing. let's say you want to turn that gold back into money, you can do it like that. you can sit down at your computer and, in the blink of an eye, you can sell your shares and in a couple of days, you have your money in u.s. dollars.

do i have great bargain news for you for christmas shopping. if you go back over recent years, the toy market has been really a toy story of two places. you know what they are? walmart, the nation's largest toy seller, and target. it used to be toys r us was the biggest in the game, but they have faded. toys r us is doing something that is great for this time in history. they are going to open hundreds of temporary toy stores around the country. there is plenty of vacant retail space, plenty of people they can hire to work the registers, and it's going to inject new competition into the toy market that we haven't seen in a long, long time. you, as a parent, will be smiling because as we move through october into november, there is going to be deal after deal.

>> next on clark howard -- >> caller: they claim the packaging is inadequate for the items, and i feel like my only recourse is to go to small claims court. >> you should do that because if you sit on your rights, you lose them. you should go ahead and file, but that's not all you should do.

everybody's got to eat. sometimes i like to eat too much. but one thing i don't want you to do is spend too much in the supermarket. i have advice about a gotcha you have to watch for. that's just one thing you're going to learn this half hour that will help you stretch every dollar. >> ever since i can remember, i have been fascinated by money. making it, saving it, studying it. by the time i was 31, i earned enough to retire. so, i embarked on a new mission, helping you take care of your money, so can you save more, spend less and avoid getting

ripped off. >> now from his radio studio, your money expert, clark howard. >> i have to tell you about the tale of two people in a household. if my wife gives me the grocery list, i buy whatever the cheapest is in each thing on the list. but when she goes grocery shopping, somehow magically, we spend a lot more money, because we have organic this, organic that and organic the other. a lot of people really believe in the health claims and maybe they are true, who knows, about organic products. should you believe it? let me tell you something. there is more and more stuff saying organic that truly is not organic. the federal government continually loosened the standards on what can say organic. there is something you should look for before you spend huge amounts of money buying organic stuff. make sure it says on the front 100% organic.

don't buy something that says organic or some organic ingredients. if you're going to spend the big bucks, get the real deal. speaking of the real deal, when something says natural on the package, what does that mean? nothing. it's a marketing term in most cases. you are throwing your money away. you want my opinion on something other than food, i bet. how about your wallet? david, how are you? >> caller: just fine, clark, thank you. >> you are in the midst of doing some building at your house, huh? >> caller: yes, sir. >> i don't know if i'm supposed to congratulate you or send you my regrets. >> caller: what we are doing is we are going to be having a mother-in-law suite built on to our home my mother-in-law is willing to . pay for the room addition so we have something along the lines of a gifting type thing. >> how much money is it going to cost? >> caller: in the ballpark of

$40,000. >> let me tell you how you can play that. >> caller: okay. >> you can do it in a way where there is no gift tax issue at all. >> caller: that's what i was looking for. >> your mother-in-law is allowed to give both you and your wife $13,000 each, each year, without any tax implications at all. >> caller: okay. >> so she can right off the top give you $26,000. done. she has to write two checks, one to you and one to your wife. very important that there be two separate checks. >> caller: okay. >> so then for the remainder, you said it is going to be 40 total? >> caller: about 40. >> she can give you a note for $14,000 with the first interest payment due january 2nd, 2010. then on that day, she can say, oh, i'm gifting you that money. and you're done.

>> caller: okay. >> actually she would have to do seven and seven, wouldn't she? yeah, seven and seven, two different notes. >> caller: right. >> and so the $40,000 can be transferred from her to you and your wife in a very short period of time, completely tax free. but the notes need to say $7,000 loan for -- until january 2, 2010, interest rate of 6% or some -- it has to be something that would feel like a market interest rate. >> caller: right. >> due and payable at that time and then when that time comes, she forgives it and that becomes a gift. john joins us. john, welcome to "the clark howard show." how are you? >> caller: hi, clark. thanks for taking my call. >> my pleasure. what's going on with your wife? >> caller: what's going on is very simple.

back in, i believe it was, '94 and '95, she had a settlement for a credit card debt. and it was settled and there was a settlement drawn up and all, and it was a done deal. now, in '02, approximately, the same company sent a collection agency on her for the same debt that was settled, and i believe that she showed the settlement papers and it was dropped. now just yesterday, a subpoena was dropped here for the same company. >> no way. she was served court papers? >> caller: yes. i'm serious. yes. >> this is very important. very important. you ready? >> caller: yes. >> what happened was a collection agency bought what's known as zombie debt. the bank your wife reached a settlement with 15 years ago, they are reporting her still as not having paid this and some zombie collector paid the bank, a penny or two cents on a dollar

on this debt. even if she had not paid it, it is well outside the statute of limitations to sue. but what the zombie collector does is they file suit against your wife, expecting she is not going to show up in court. then they will get a default judgment from the court, an illegal judgment. it is one that will have full force of law that will then be a judgment against her that will stay on her credit in most states for seven years, and will allow the collector, once they have the judgment, to garnish your wife's wages or empty her checking account. >> caller: oh, my gosh. >> she must answer the court and must, if necessary, appear in court. they are trying to take advantage of the fact that the courts are busy and a lot of people will say, oh, that's not a problem. i took care of that long ago, or

that's too long ago for that to be an issue for me. then they sue you against it, and failure to defend yourself means you lose even on an illegal action. >> caller: unbelievable. >> it is unbelievable and it is an absolute crying shame that this is going on. >> next on clark howard -- >> we are hoping to get some good advice on how to better manage these larger debts.

it's time for money coach. that's where you pose your money riddle to me and i try to give you the best advice i can for your life and your wallet. let's meet ken and lisa. >> my name is ken. >> i'm lisa. we need a money coach! >> our financial situation is pretty stable right now, but the current economy, you never know. we are trying to get a handle on our debts and how we should handle paying those off. our two largest debts right now are our home mortgage and home equity line. one other extra thing is our car. it's really old and has a lot of miles and we are going to be

needing another car. should we be paying more on the principal on our mortgage or should we be throwing as much money into the home equity line as possible? >> i love your question, but it's the wrong one. your mortgage, you don't owe very much on it and not that many years left to pay. your home equity line, a tiny amount of money owed on it. your current interest rate on it is a floating rate, but it's great in the threes, even though that will go up over time. you owe so little that's not a priority. any extra cash you have, you should pop into savings. i know, puny amounts of interest you're earning on your savings, but the purpose is to build up that money so that when it comes time you have to replace that car, you already have a substantial amount of money to be able to pay cash for a used car or make a meaningful down payment on a newer used car or a brand new one. this is always a juggling act.

do you pay off debt? do you build savings? normally, in most circumstances, i talk about savings rates at 2% and amount owed on a mortgage is such that the interest rate is a significant factor. five plus percent. so why would i tell anybody ever to put money in savings instead of towards the mortgage? normally i wouldn't. i would say put your extra dough towards the mortgage balance or any other high-interest rate debt. we know there is a specific goal here. same for you. if you have a goal you are trying to meet, relatively short-term, pop the money in savings instead of paying down debt. what's happening with you, jennifer? >> caller: my husband and i are purchasing a recreational vehicle from a private party. the seller owes a little more on it than he is selling it for. our concern is that how -- we

never bought anything where it has been owed more on it and we talked to his bank and they said we could come into the bank and give him the money and he would pay the remainder at the bank and the bank will sign off the title to him and he would have to be obliged to send the title to us once they receive it. we're just concerned because not doing this before, what's the best way to protect ourselves? >> what i advised people in the past and what is the normal procedure is that you would pay the portion that you are to pay with the check made out to the individual and to the bank that the money is owed to. what is the most important thing for to you do is the bill of sale needs to be a thoroughly thought out bill of sale. in this case, the bill of sale would not only have the vin

number of the rv, the brand name, model, year, almost a narrative following the initial things. >> caller: okay. >> and the bill of sale should have two copies. the two copies should be signed by both you as the buyer and the seller involved. you can do this face-to-face or no? >> caller: yes. >> what i recommend when you do it face-to-face is that you, the seller, and a bank officer sitting down at the desk doing all this paperwork at that time. i would put on the bill of sale, seller agrees to forward title by -- you should designate a method like fedex or u.p.s., that the seller forward the title within -- you should give a certain number of days of when the title is received with lien clear from the bank.

i would say within five days is a reasonable period of time. >> caller: okay. >> for the seller to get out there and get to a fedex or u.p.s. facility and send that to you. >> next on clark howard -- >> where can we possibly check or try to find out if these coins are worth anything? >> that is not an easy thing to do.

you can get tons more money-saving advice from me on the web. all you do is go to cnn.com/clarkhoward. you got a question about credit cards, checking accounts, cars, houses? you name it, go to cnn.com/clarkhoward and that's also the address you visit if you might want me to be your money coach. upload a video telling me your story or fill out the e-mail form and maybe you will be a candidate on money coach. you know what else is at cnn.com/clarkhoward? commentaries from me. i've got a website for you that is chock a block full of money-saving tips. it's cnnmoney.com. here is poppy harlow with some new info for you. poppy? >> rising unemployment is creating an interesting new trend.

according to the census bureau, one of every eight people between 25 and 34 are moving back in with the parents. so if you are a mom or dad and your kid has found their way back into the nest, cnnmoney.com has tips on how to deal with the situation. first of all, don't baby your babies. while your kid is looking for a job, charge some rent if they have any income, and also assign some responsibilities around the house. you can recommend job search websites or helping them network with your friends, and also suggesting they get a temp job while they're looking for a permanent one. don't forget the exit strategy. make sure your child put money aside for moving expenses when they find a job so they can find their own home. you can find more tips at cnnmoney.com all right there in that story. back to you show. >> hello, teresa. how are you doing? >> caller: hi, clark. my brother passed away about ten

years ago and he had old coins in a safety deposit box. i'm trying to find out what is the best route, i mean, where can we possibly check or try to find out if these coins are worth anything? >> that is not an easy thing to do. i'm going to give you how i would do it as a layman. lay person. are you good on the web? >> caller: fairly good, yes. >> there is a website called money.org. >> caller: okay. >> and it is the website of the coin people. and it's like the trade association for coin dealers. they have some consumer information on it, but not -- that's not really their market. what is available on their website is information on where there are going to be coin shows. >> caller: okay. >> and i know a lot of people would say why aren't i saying ebay, ebay, ebay? a lot of people do now sell coins on ebay. but again you don't know what

you have. you don't have a feel for range of value. >> caller: that is true. >> but when there is a coin show you can go with the coins you have from your late brother and you can go to coin dealers who are buying and selling at these shows. and saying -- okay, not for the collection. you want per coin what is this, what's it worth? and you're not going to know from a single dealer what you've got. >> caller: okay. >> but by -- the great thing about shoe leather at a show, you can go booth to booth to booth to booth and show what you've got and then see what value people offer you for it. then you've set in place a competitive marketplace. you can, at that point, get the cards of the people who seem to be on the up and up, who gave you decent offers on your coins. and then you can go test the marketplace on ebay and see what people will pay you for particular coins that may have

turned out to have meaningful value. in the new credit card bill of rights, guess who was left out. small business owners. at the last minute, a provision was put into the law, or basically taken out, that gave the credit card companies permission to do anything they want to if you have one of those business cards. now, remember, with a business card as an entrepreneur, you also sign for personal responsibility, the worst of all possible worlds. because of this loophole in the law, what i recommend is that you turn your business cards in for personal cards, because you were liable anyway, and just pay those personal cards from your business. you could always do that. now it becomes extra smart because then you're protected by the new protections in the credit card law that otherwise you're left high and dry from. and do this quickly.

next on clark howard -- >> we're trying to figure out if -- you know, when she gets to jfk if she should exchange money there. >> no, no, no, no, and no. >> caller: and if she should -- >> no way.