hi i'm joseph berardo at magnacare we believe that all citizens need to be informed about the healthcare issues that affect their lives. that's why we're proud to support the programming produced by the caucus educational corporation and their partners in public television tackling out finances next on caucus new jersey funding for this edition of caucus new jersey has been provided by new jersey's credit unions banking you can trust felician college virtua njm auto insurance homeowner's insurance and more with a focus on safety and financial stability horizon blue cross blue shield of new jersey community education centers and by new jersey sharing network dedicated to saving lives through organ and tissue donation promotional support provided by the star ledger powering nj.com and by the new jersey business and

industry association and it's monthly magazine new jersey business [music playing] [music playing] welcome to caucus new jersey i'm steve adubato you know during these very uncertain economic times many are facing extraordinary financial challenges here in the studio to help us get our finances under control we have michael drulis exeutive director of the new jersey coalition for financial education lourdes cortez president and chief executive officer of the north jersey federal credit union kim cole education outreach coordinator at novadebt and finally bill klinger associate professor of business at raritan valley community college i want to thank all of you for joining us we have to get our finances under control do we not? by the way throughout this program you're gonna see some very important websites that will

help you get your finances under control. by the way how many americans do you think watching this show at least on the east coast watching us what percentage do you think do not have their finances under control? what do you think? i would say quite a few i don't know the exactly what that percentage... do you think it's close to half of people watching our segment? more than half no yeah i think so you think more than half the people watching are saying terry our floor manager you agree with me? 20 years you're going like this cause you're included i know and you're saying yes you think most people watching are saying i don't have my finances under control? absolutely because? well with the economy i mean i think with the downturn in the economy it really hasn't helped the consumer and i think that from my perspective from a financial institution i think we haven't done a real good job in trying to really promote the products and services that we can offer to you know

help them create a budget see where their spending habits are is the budget the thing? is that really the... is that really the thing? so many people so many people re... i see people smiling right here so is the biggest reason why so many people do not have that they do not have their finances under control is because they don't have a budget you're saying no already no my panel is seriously disagreeing with me but i it's difficult to keep a budget i mean we've all tried maybe at some point and it's the textbook way to do it but it's very difficult to implement and it's a lot of discipline and people don't do it but that doesn't mean it's not important? well there's other ways there's another way to do it i think and on a show that a panel you had in march they talked about pay yourself first mm hmm that means you watch our show on a regular basis? oh all the time you are clearly a very aware viewer of broadcasting [laughter] go ahead so we said pay yourself first right so the idea is when you get that paycheck put that money aside for yourself first

automatically have it deducted put it in the bank or your credit union or write yourself a check five percent two percent ten what? we should be thinking at least ten percent at least ten percent at least ten? if you want to be... current people are talking about fifteen percent twenty percent if you really want to be happy well how does that throw out the budget i don't understand then if you can live within you set that money aside and then within whatever you have left right but in order to do that though you need to look at where you're spending your money which is a budget of sorts yeah well you know a lot of people yeah i think the word budget has a negative connotation does it freak people out? yeah i think so i think so i think that maybe if you called it kimberly and i were talking about earlier on another word for budget? yeah like spending plan yeah spending plan [laughter] debt free plan what's in a name? let me ask you something you've told our producers that there are three basic things you need to have this spending plan some people

call it the other thing the b word i'm not gonna use um what do you think we need? put it together you gotta start with your priorities what's important to you? to your original question people today are more in control of their retirement and their finances ever before it's been turned over to us to determine where we're gonna be and how we're gonna get there and we want to take our priorities but we also look at what the society deems important decide what your priorities are and then from there set your goals mm hmm if you have your priorities and your goals give us an example so if your priority is to your children's college education planning absolutely that becomes your priority at what expense in a finite amount of money coming in can you make that happen so you have your priorities you have your money coming in and your money going out and once you know those three things on a regular basis you can determine what's going to make you happy but you have to decide what's important that's priorities you know it's so interesting i

i was watching one of these so called reality shows the other day and i'm embarassed to admit that i was watching it for research purposes [laughter] because that's what we do so and i watch this woman who's on one of the reality shows complaining that and she had she's living in this very extravagant home and she was saying you know i don't understand why we don't have money to send our kids to school and i'm thinking wait a minute and she's talking about her louboutins which are what do you think go for a couple hundred bucks? oh yeah easily more than that? yeah you're making a face considerably more than that a couple hundred bucks yes 3-4 hundred? up probably 8 or 9... yeah okay she talked about her louboutins she talked about this $10,000 table she wanted all these things and then she was complaining they don't have money to send the kids and by the way they have all kinds of other financial issues. here's my point if sending those kids to school was the top priority what should she be doing? well on her feet? [laughter] exactly i mean you know there's plenty of shoe stores that she could get reasonable shoes and i agree with michael i

really do believe that you have to have your priorities in order and you know it's okay if the louboutins are your priority but then something else has to go then you cannot sit there and say i can't send my children to school and who was she complaining to by the way? who is someone upset with if you're buying a nearly $1000 pair of shoes and by the way it's not just about that goofy reality show it's about everyone of us who talks about our kids are a top priority send them to school and then we do this other thing we do that enough that we can't actually do that right bill? right and then we go hey who do i complain to here? yes you have no one really to complain to. my wife and i got married we had a priority of saving our first kitchen table was a folding card table with matching folding chairs my officemate came over for dinner she was so embarassed [laughter] [laughter] she took us to a friend and we got their old pieces but it's a priority call right it's back to the priorities i

agree 100% with that you have to make saving in your future your children's future a priority and take as much pride in that as you do granite countertops right what's wrong with granite countertops? nothing if you save for your future if you save for your children's future granite tops countertops are fine someone says by the way the friends who watch this on a regular basis you know who you are and i try not to out you and embarass you this way but some of you have said you have to have granite counter tops and then complain that you can't do other things bill's talking to you right now [laughter] [laughter] he's talking to you right now and some of you who also joined country clubs [laughter] on top of the granite counter tops who can't do other things bill's talking to you right now you're saying they should have a cardboard kitchen table at least [laughter] [laughter] [laughter] no but seriously and in all seriousness some of our friends who do this and they complain about it u really... it's a finite amount of money? is it not? yes

but doesn't that go back you're contradicting yourself because you said you don't need a budget what you do if you pay yourself first there's sort of a budget and you say i'm gonna set aside 15 percent of my money now that's gone now i figure out how to live within the rest of that money right i can figure out how much i'm willing to pay for cable i want to figure out how much i'm gonna pay but live within the rest and i may not know exactly how much i'm spending on food or going out to eat but i live within the rest after i've set aside that money first ot it is it like a food journal? it could be i mean but it just like a food journal scares people to look at what they've done their financial... [laughter] if i want to lose ten pounds i gotta yeah but what... look what you ate i can't i can't look at that n't look at it but it's the fear drives people in their direction and to be able to put the fear aside and look at... well you go online and see what your transactions are and on a daily basis make that decision about how you want to spend your money don't beat yourself up too much if it doesn't go your way because it's a long race

and that's why you set those priorities that are long term priorities and you work towards them hmm i think it's human nature to get discouraged easy and when so much is on the line sometimes it's just easier not to look now when you talk about debt alright so let's assume for whatever reason or reasons a lot of people watching you have so much debt that it's all consuming. it's... there's not just an economic issue it's beginning to affect the relationship the marriage stress and pressure with kids it's consuming your work all kinds of things right best ways to manage pay down however you want to say deal with your debt your thoughts? um i think cause i know there's no one way to do this right right there's many ways to skin the cat um one of the things that i wanted to bring up is you know talk to a financial advisor if there's a misconception that you need to have money to invest to speak to a financial advisor and that's not necessarily the case

you can sit with someone that can take a look at what your finances are right and put you on track as far as what you're goals are in the future you know how much money do you want to save for college tuition sure or any major big purchases so you know my thing i think to get back on track you could sit down with a financial advisor take a look at the interest rates on the credit card that you're paying and see if doing a debt consilidation loan would be you know an opportunity but you may not know how to do it yourself and novadebt is a nonprofit yes yeah correct explain that uh basically as a non profit first of all we will help people whether they can pay or not pay us um describe what your organization is and does what our organization essentially does is we provide free financial counselling and education as well as housing and counseling bankruptcy to anybody in need

so if you find yourself in a position where you are in that mounting debt scenario you can speak to one of the certified financial counsellors that our organization or organizations like ours and they will walk you through kind of what your financial picture currently is and what steps you need to take in order to achieve the goal to... where does your money come from? well as a... you're a non profit i know [laughter] i know it i mean seriously like we're a non profit we have to raise money right yes how do you do it? well fortunately because of the services that we do provide particularly the housing counselling that we provide we do receive from federal grants oh you do such as from hud and agencies such as that that definitely helps support our cause as well you know we're i would like to thin that we're mostly grant funded you know we're out there you know looking for grants you know but i'm curious about something are there certain

people at certain ages that wind up with certain problems connected to debt that are the product of their ages meaning the so called millenials now give me the official definition of a millenial. a millenial is what? what do we got age wise? mid 20's? yeah what's the average is that the same as generation x gen x? gen x is more end of your 30's beginning of you 40's yes okay fine so they get those two groups and then you have older people mm hmm baby boomers baby boomers who wind up in debt are they in debt for different kinds of reasons? absolutely yeah what are you thinking about you get the i'm trying to figure out the bubble what it's saying yeah what do you got? i think a lot of it is a factor of when we grew up in the influences on us at the time the savings rate in the us has gone down from 10 - 13 percent in the 70's and the 80's 50's 60's and 70's to less than half of that right now and i think the people that

grew up in the depression and the war they saved aluminum foil they saved green paint they did things and that was ingrained in them it's a gut thing. baby boomers? less so you know children today the millenials and all gotta have it gotta have it it's much more consuming now it's a less delayed gratification kind of thing so they wind up so say someone 26 28 winds up with a massive debt situation right and it's not just from school it's from the credit card that they got when they were at in college because someone was on the campus saying hey got a good deal for you you don't need any cash here's the deal kid didn't think it through now the kid owes $8,000 now the kid's credit's at risk what's that kid's options? i think you have it right here go to a credit union go to a kim's outreach station but you can't do it yourself it's very hard to pull it off

yourself cannot cannot you need professional experience i think there's that expectation that i can work harder earn more but you can't beat compound interest it's always explain... you can't... gonna work... sorry for interrupting you can't beat compound interest explain that so the way the interest is calculated on the credit card i owe you a grant that's it i just work and i'll pay a grant t it's not really a grant is it? not really a grant what is it really? when you look at the bottom of that statement and it talks about how that money gets compounded and it just moves faster that maybe someone can explain compound interest etter than i can but it's a race to beat compound interest and you can't you just... you don't you're not gonna have that earning capacity accellerate that quick wow you also need to know when to ask for help don't wait until you get to the point where you're barely living paycheck to paycheck know when to ask for help well i'm gonna just throw this one then because we had friends recenetly my wife said to me oh so and so's gonna declare bancruptcy and i said oh really? and she i'm sorry for doing this she said that's not gonna be so

terrible and i said why isn't it gonna be so terrible? cause you know they can just start over again and i said really? they can? said so you think they can just start over again? i said i don't know if it works that way i think once you declare bankruptcy people know it cause you just t's not just that you don't have to pay the creditors i think people know it and it has a significant serious detrimental impact you want to start a business you want to buy a home? you want to borrow atever it is i think it's like a government who has like junk bond rating that can't borrow money. i don't want to say am i right? but am i right? mm hmm yup lourdes why are you making a face? she's right... because part of the... no she's not right i mean it's... is significant to i'm not saying it shouldn't and if you have to file for bankruptcy that's what ou should do but it's a big deal it is a big deal but what happens is that financial institutions and credit card companies

make it seem easy for the simple fact you file bankruptcy two months down the road you will get a solicitation for another credit card from the same financial institution how can that be? it's... it is i've seen it you are a clean slate clean slate yeah cause you can't file for another seven years... right... and stastics show that if you go into this after bankruptcy you will pay on time yes because you are looking to overcome that bankruptcy and so you will pay and they're going to charge you 30 percent interest that's going to be... absolutely woah why 30 percent because i experienced bankruptcy? that's your penalty yes absolutely that's the risk so wait a minute hold on one of the wait a minute one of the things that happens when you file bankruptcy is you pay a higher rate of interest on what you borrow? absolutely that's the risk now can you buy a house after bankruptcy? sure you could buy a house after bankruptcy but what? by my mortgage may be at 4.32% your mortgage may be at 9% or 10% interest um

wow cause you're a greater risk? right you're a greater risk the higher the rates because those who file for bankruptcy greater risk yes right not insignificant? no not insignificant um but an option for some? and sometimes the best option i just want to be clear yes you talked to a financial planner you talk to a professional if that's the best option that's the best option but it's not insignificant i'm sorry go ahead look at it this way i think it's um while it is an option for some it troubles me that people are going around and saying i just filed for bankruptcy i mean i have a visceral reaction to that you like to be honest? mm hmm and what bothered me was not a big deal not that someone was filing for bankruptcy what bothered me was come on. and also i will also tell you what bothered me was from an ethical point of view i thought to myself wait a minute what about all the people what about the plumber what about the contractor what about the people that owed who now they don't have to pay or whatever they pay i don't kn... pennies on the dollar i don't even know what they pay if anything

i thought there's something to that no? there's a learned behavior so when someone goes right to bankruptcy they haven't gone through to see where their finances are they haven't gone through the steps to talk to the professionals to learn where they may... where they went yeah and then when you get to the end of the road and everyone agrees listen that's the only option now you come at it with a different perspective sure but to start there to think it's just gonna be ok it's false what about the idea of second mortgages to pay off debt? no? this is probably where we're all going to have a different opinion share your view i am not an advocate for taking a second mortgage to pay off unsecured debt big credit cards the reason for that is that when you borrow equity from your home you always run the risk of something happening down the line and you being in a position where you're not able to pay it back and of course the end result being default on a mortgage which can lead to forclosure

if you default on the credit card debt well it's not in your best interest as a creditor there's a good chance that you're not going to lose your home over it. so because i think my dealings tend to be with individuals that are experiencing financial difficulties we always kind of choose the path where it's safest you don't like the 2nd mortgage i don't i don't like using it what do you like? i... go ahead i'll come back to you no um well i would like to back up a little bit earlier and say how do people get in debt and have to do a second mortgage? i think um a good rule of thumb is don't borrow money for anything that goes down in value what? give us an example tv. don't finance the tv don't finance the tv? don't finance the... what are you gonna do pay cash? don't finance the car if you can't pay for it don't buy it oh come on don't buy it don't finance a car? don't buy it countless thousands...

tens of thousands of people watching are you kidding so how would they pay for the car? sam walton. you know what sam walton... the founder of walmart, you know what car he drove? all his life? 1985 ford pickup. he could have bought a car company but he bought... but he drove a ford pickup an old one and so you're saying buy what you can afford you say? a little oversimplified to buy what you can afford um i think when people run into credit card problems it's easy to get that check from that second mortgage to say ok this is now i can sleep tonight but did you go back and look at how you got to where you were? that learning process will determine what you do when everything starts the next day and you got those cards paid off which now you have very large lines yup that have nothing on lines of...? credit got it and nothing on em so now you know i know when i went through a lot i deserved to start to replace the tv that i couldn't get the last three months and so there's a place for it but it becomes

much more expensive once you bury that debt into your mortgage payments put's things in perspective lourdes add something well i think that as long as you don't exceed you know from a financial institution we will not loan 80 percent more than 80 percent of the loan to value so you know before you file bankruptcy before you stststststststststststststststsr credit cards if you have the equity and the home you can take the 2nd mortgage and it could possibly be tax deductible you would have to check with your accountant but you know um you're not totally against the idea? no i'm not totally against it and by the way rebuilding it by you're right there are different points of view on this rebuilding your credit right credit unions help in what way? in a number of different ways we have products we... there's a product that we call borrow and save hmm and it's not only to reestablish a credit if we file bankruptcy but it's also to help you create credit if you don't have credit um we also help with

financial literacy we actually partner with kimberly's her non profit? yes and um we... teaching? teaching we also have on our... about finance? right we also have financial literacy programs modules on our website and they're not only for you know the gen x or the millenials or the baby boomers there are also modules for kids in grammar and high school cause you got to get them young and teach them yeah the vale of the dollar learning how to save last question beore we get out of here um why is money such an emotionally charged issue that so many of us have a hard time talking about it? you know what i'm talking about? yes it's a cultural thing other a couple minutes let's go countries cultures brazil talk very openly about their incomes and things like that we just don't and i think

it's taboo isn't it? it is it's tacky some people say it's tacky you talk about your money talk about your money issues talk about what you have what you don't have what you want what you're looking for money you're just talking about money it's tacky taboo right? i don't think so i think but in a lot of people's minds it is i think what you're doing here with this show talking about it us all speaking and people watching what we're doing with the coalition where there's a thousand points of interface when it comes to talking about money you don't have to talk about your money you can talk about other people's scenarios but just hearing the stories what other people have done inspires you to manage your money a little bit better. i think the fear is always there. what's interesting i meet more 20 year olds and younger who don't have credit cards who are on check cards only on a cash basis they're scared to death what they saw their parents go through that's a good thing that we're seeing right? it's a fantastic thing cause of the education we're all doing it's all coming together so i think we're gonna see a change in behaviors those who are where we are the way we were raised that's what it's gonna be and it's not like if you ignore this and you build up this debt

and you have this sincere look i'm not gonna make too much of this and you don't know what i'm talking about it doesn affect people's relationships it really does rigjt one of the number one causes of divorce absolutely say that again? one of the major i think it's number two on the list of causes for divorce in this country money issues? yeah money issues we deal with it it's funny we often talk about how we are well we are emotional counsellors and financial counsellors because of how impactful let me just say this this is an important topic it is not just about money it's about what money means in our lives and you have all done a tremendous public service and i want to thank you for putting money in perspective thank you so much the preceding program has been a production of the caucus educaitonal corporation celebrating over 25 years of broadcast excellence and thirteen for wnet njtv and whyy funding for this edition of caucus new jersey has been provided by new jersey's credit unions felician college virtua njm

horizon blue cross blue shield of new jersey community education centers and by new jersey sharing network transportation provided by air brook limousine serving the metropolitan new york new jersey area caucus new jersey has been produced in partnership with tristar studios this program has been made possible in part by the kessler foundation [music playing] [music playing]

captioning sponsored by macneil/lehrer productions >> woodruff: islamic state militants on the verge of capturing a key town near turkey, despite ramped up u.s. air-strikes. and the harrowing story of a young girl escaping the group's brutal treatment of women. good evening, i'm judy woodruff. >> ifill: and i'm gwen ifill. also ahead this tuesday, the supreme court weighs whether muslim inmates have the religious right to grow beards behind bars. >> woodruff: plus, a portrait of a young man like you've never seen before and the artist who transforms the national mall in washington into his canvas. >> my idea is to change the reasons why portraits are made.