Your Life Your Money

AND WE SURE DON'T HAVE A PROBLEM A LOT OF SPENDING MONEY.HOPPING. BUT HOLDING ONTO IT AND LIVING WITHIN OUR MEANS CAN BE A REAL CHALLENGE. HI. I'M DONALD FAISON.

AND IF YOU'RE LIKE ME, DEALING WITH MONEY WAS NOT SOMETHING YOU LEARNED IN SCHOOL. I PICKED IT UP BY TRAIL AND ERROR -- AND I'M STILL LEARNING.

Man

YOU LIVE IN A SOCIETY THAT SELLS EVERY NEW TOY. THAT'S THEIR JOB -- TO SELL YOU A TOY, ONE YOU DON'T NEED. SO, YOUNG PEOPLE HAVE TO MAKE CHOICES. YOU HAVE TO KNOW WHAT YOUR FINANCIAL GOALS ARE.

Woman

WE WANT OUR RESTAURANT TO TAKE US TO OUR RETIREMENT. BUT I HAVE TO BE REALISTIC. AND LIKE, YOU HAVE TO START PLANNING NOW.

Man

I DECIDED TO BREAK OFF INTO MY OWN BUSINESS BECAUSE I PERSONALLY LOVE HAVING CREATIVE CONTROL, AND A CLOSE RELATIONSHIP WITH THE CLIENTS FROM START TO FINISH. WHETHER TIMES ARE GOOD OR BAD, WE ALL NEED HELP MANAGING OUR MONEY. AND IT'S UP TO EACH OF US TO GET IT RIGHT.

Woman

WITH INTEREST, LATE FEES, PENALTIES, I ACQUIRED OVER $30,000 IN DEBT. I'M TRYING TO GET THINGS SITUATED SO I DON'T GO INTO MY LIFE WITH ALL THIS DEBT AND I CAN ACTUALLY HAVE CREDIT -- GOOD CREDIT. BEING IN DEBT, IT'S BAD, BUT STAYING IN DEBT IS WORSE. I STARTED SMALL, AND I WORKED MY WAY UP.

YOU'LL MEET FOLKS JUST LIKE YOU WITH MONEY ISSUES OF THEIR OWN. AND YOU'LL HEAR FROM PEOPLE WITH THE KNOW-HOW TO HELP THEM STAY ON TRACK.

Man

THERE IS NEVER GOING TO BE A GOOD TIME TO GET STARTED ON YOUR FINANCIAL LIFE, SO YOU MIGHT AS WELL GET STARTED TODAY.

Woman

WHEN YOU'RE YOUNG, THE GOOD NEWS IS YOU'RE JUST STARTING OUT AND IT'S REALLY EASY TO GET ORGANIZED RIGHT NOW BECAUSE PRETTY MUCH EVERYTHING IS ONLINE. YOU ALWAYS HEARD, "DON'T SWEAT THE SMALL STUFF," BUT WHEN IT COMES TO YOUR MONEY, YOU HAVE TO SWEAT THE SMALL STUFF.

Faison

IF YOU'RE IN SCHOOL OR WORKING FULL TIME, WE'VE GOT NEWS FOR YOU. BASIC INFO ON BANKING, CREDIT CARDS, TAXES, AND INSURANCE. THIS SHOW IS ALL ABOUT YOUR LIFE AND YOUR MONEY. HAS BEEN PROVIDED BY "YO A GRANT FROM...NEY" I TOOK THAT PAYCHECK AND BOUGHT MYSELF A SHINY NEW JEEP.

MAN, I LOVED THAT CAR. BUT BY THE TIME THE THIRD PAYMENT CAME DUE, I WAS OUT OF MONEY AND HAD TO HUSTLE TO TRY AND HOLD ON TO IT. THE FACT IS, MOST OF US ARE CARRYING DEBT -- AND LOTS OF IT. IT'S NO WONDER WE HAVE MONEY PROBLEMS.

WHEN YOU FACTOR IN INFLATION, THE AVERAGE PERSON MAKES LESS MONEY THAN THEIR PARENTS DID 30 YEARS AGO. IT'S A JUNGLE OUT THERE -- A FINANCIAL JUNGLE. AND IT'S EASY TO GET LOST UNLESS YOU HAVE THE SKILLS TO FIND YOUR WAY.

Woman

I'VE GROWN UP WITH A FAMILY THAT'S ALWAYS BEEN IN DEBT AND ALWAYS HAD TROUBLE WITH FINANCES AND ALWAYS WORRIED ABOUT MONEY. I'VE KIND OF TURNED AWAY FROM THAT AND JUST TRIED NOT TO THINK ABOUT IT. IN HIGH SCHOOL, I REMEMBERED A COUPLE OF SPEAKERS ABOUT, YOU KNOW, MANAGING YOUR CREDIT AND YOUR MONEY AND, YOU KNOW, LOOKING FOR A JOB AND ALL THAT. BUT IT DIDN'T REALLY HAVE A GREAT IMPACT JUST BECAUSE IT WAS THAT ONE TIME.

MY MOM WAS A SINGLE PARENT, SO WHEN SHE DID GET MONEY IN, WE TENDED TO SPEND IT RIGHT AWAY. AND SO I KIND OF GREW UP WITH A MIND-SET OF, WHEN YOU HAVE MONEY, YOU KNOW, GO OUT TO EAT, GO BUY SOMETHING. I REALLY HAVEN'T HAD ANYBODY TO SHOW ME HOW TO MANAGE MY MONEY OR ANYTHING LIKE THAT.

Faison

HERE'S A MAN WHO CAN SHOW YOU A THING OR TWO ABOUT MAKING AND MANAGING MONEY. RUSSELL SIMMONS STARTED OUT HUSTLING ON THE STREETS IN QUEENS, NEW YORK. NOW HE'S A MULTI-MILLIONAIRE. BUT HE LEARNED ABOUT MONEY THE SAME WAY I DID -- THE HARD WAY.

Simmons

WHEN I GREW UP, I ALWAYS WANTED EVERY TOY THAT I SAW. I SEE YOUNG PEOPLE ARE THE SAME WAY TODAY. I MADE SOME BAD CHOICES EARLY ON, BUT I WAS A LITTLE CONSERVATIVE. I WAS LUCKY ENOUGH THAT MY PARENTS TAUGHT ME SOME THINGS.

YOU HEARD ABOUT MANAGING YOUR LIFE KIND OF TRIAL AND ERROR.

Faison

WHEN RUSSELL BEGAN HIS BUSINESS CAREER, HE HAD LITTLE TO GUIDE HIM EXCEPT STREET SENSE AND A KEEN INTEREST IN A NEW MUSIC GENRE THAT WOULD COME TO BE KNOWN AS HIP HOP.

Man

WHEN THE MAJOR LABELS PAID NO ATTENTION TO HIP HOP MUSIC, RUSSELL WASN'T DAUNTED BY THAT. HE SOLD RECORDS OUT OF THE TRUNK OF A CAR -- LITERALLY.

Faison

IN 1984, RUSSELL AND A PARTNER LAUNCHED THE FIRST HIP HOP RECORD LABEL -- DEF JAM. HE WENT ON TO MANAGE SOME OF HIP HOP'S GREATEST STARS, BUT HE DIDN'T STOP THERE. HE BROUGHT HIP HOP INTO THE MAINSTREAM, CREATING TELEVISION SHOWS, FILMS, AND CLOTHING LINES. BUT HE ALSO WANTED TO START GIVING BACK.

RUSSELL WAS DETERMINED TO GIVE YOUNG PEOPLE THE SKILLS TO SUCCEED IN MANAGING THEIR MONEY.

Simmons

FINANCIAL LITERACY IS NOT TAUGHT IN SCHOOLS. AND IT'S NOT NECESSARILY HANDED DOWN FROM GENERATION TO GENERATION. SO, WE GOT TO SUPPLEMENT FOR THAT.

CHEERING

Simmons

LUDACRIS!

Faison

RUSSELL CO-FOUNDED THE HIP HOP SUMMIT ACTION NETWORK, WHICH PUTS ON THE GET YOUR MONEY RIGHT SEMINAR ON PERSONAL FINANCE. IT BRINGS TOGETHER STARS OF THE HIP HOP WORLD, MUSIC INDUSTRY EXECS, AND FINANCIAL EXPERTS TO HELP YOUNG FOLKS LEARN THAT MANAGING THEIR MONEY IS AN ESSENTIAL LIFE SKILL. ONE OF MY FINANCIAL MISTAKES IS BEING WILD WITH THE MONEY. SAVE YOUR MONEY, LIVE WITHIN YOUR MEANS.

Chavis

HE'S KNOWN AS THE GODFATHER OF HIP HOP -- RUSSELL SIMMONS!

CHEERING

Simmons

IF YOU'RE HERE, YOU'VE ALREADY TAKEN THE FIRST STEP. YOU KNOW, YOU'RE TAKING STOCK IN YOURSELF, TAKING RESPONSIBILITIES FOR YOURSELF.

Chavis

TODAY'S SUMMIT WILL BE THE 78th SUMMIT THAT WE'VE HAD IN EIGHT YEARS. WHEN WE FIRST STARTED THE HIP HOP SUMMIT, WE FOUND OUT WE HAD UNDERESTIMATED THE READINESS -- THE THIRST AND HUNGER OF YOUNG PEOPLE FOR THIS MATERIAL.

Woman

THE GOOD NEWS FOR PEOPLE WHO ARE STARTING OUT IS THAT IT ACTUALLY ISN'T ALL THAT COMPLICATED TO GET YOUR FINANCES IN ORDER. YOU KNOW, I JUST STARTED... THIS IS ALL ABOUT GETTING YOU ON THE RIGHT PATH NOW BEFORE YOU MAKE ALL THE MISTAKES THAT YOUR PARENTS MADE OR THEIR PEERS MADE.

Man

I GREW UP WITH A RUSTED SPOON IN MY MOUTH. I WAS POOR. I'M THE FIRST GENERATION OF MONEY IN MY FAMILY. I STARTED WITH HARD WORK.

I STARTED WITH GETTING MY MIND RIGHT. I GOT ASSIGNED TO NOONTIME MUSIC WHEN I WAS 19, AND GOT MY FIRST $40,000, THE ONLY SMART THING I DID WITH THAT $40,000, I WENT TO THE BANK AND OPENED A BANK ACCOUNT. THE MOST IMPORTANT THING IS DISCIPLINE. YOU HAVE TO KNOW THE DIFFERENCE BETWEEN NEEDS AND WANTS.

Woman

THE LOUIS VUITTON, THE GUCCI PRODUCTS, THAT'S NOT REALLY WHAT IT'S ABOUT. LIFE IS ABOUT BEING ABLE TO CREATE A FOUNDATION FOR YOURSELF.

APPLAUSE

Man

ON MY JOURNEY TRYING TO BECOME YOUNG JOC...

LAUGHTER

Man

IT DAWNED ON ME THAT BECAUSE I DIDN'T HAVE, I HAD NO CHOICE BUT TO BUDGET.

Chavis

FINANCIAL LITERACY AND FINANCIAL RESPONSIBILITY IS NOT SOMETHING WE SHOULD TAKE LIGHTLY. IT MAY NOT ONLY SAVE YOUR LIFE, IT WILL HELP YOU LIVE A BETTER QUALITY OF LIFE.

Woman

HANG AROUND PEOPLE WHO KNOW MORE THAN YOU AND GET IN GROUPS OF PEOPLE WHO ARE LIKE-MINDED SO THAT YOU GUYS CAN ELEVATE TOGETHER.

Simmons

YOU COME HERE NOW FOR INSPIRATION. YOU SEE THAT THE ARTISTS HAVE TAKEN THESE STEPS. YOU SEE THAT YOU HAVE EXPERTS HERE TO TEACH YOU. AND YOU FIND OUT IT'S EASY.

THIS INFORMATION CAN'T GET LOST -- IT'S EVERYWHERE.

APPLAUSE

Simmons

IT DOESN'T MATTER HOW RICH YOU ARE, YOU NEED TO BE ABLE TO AFFORD YOUR LIFESTYLE, SO THAT'S SOMETHING WE HAVE TO TEACH YOUNG PEOPLE. THE SUMMIT HAS GIVEN MANY PEOPLE THEIR FIRST STEPS. THEY COME OUT EMPOWERED, CONNECTED, FEELING LIKE THEY CAN GET THEIR FINANCIAL SITUATION IN ORDER. GET THEIR HOUSE RIGHT OR THEIR MONEY RIGHT.

Faison

YOU, TOO, CAN GET YOUR MONEY RIGHT. BUT THOSE FIRST STEPS ARE UP TO YOU. IT SEEMS LIKE A LOT TO DEAL WITH, BUT YOU'RE ABOUT TO MEET SOME FOLKS WHO ARE DOING IT AND PROFITING FROM THE POWER IT GIVES THEM. WHEN I MOVED OUT TO L.A., I WAS REALLY ON MY OWN FOR THE FIRST TIME.

MY MOM WASN'T AROUND TO HELP ME OUT. I WAS RUNNING FROM ONE AUDITION TO THE NEXT, DOING COMMERCIALS TO PAY THE RENT. WHEN YOU'RE REALLY INTO THE DAILY GRIND, IT CAN BE HARD TO KEEP UP WITH YOUR FINANCES. THE TRICK IS -- MAKE YOUR MONEY WORK FOR YOU, NOT THE OTHER WAY AROUND.

MIN LWIN HAS A JOB AT AN ENGINEERING FIRM IN CHICAGO. HE'S ON HIS OWN FOR THE FIRST TIME, AND MANAGING HIS OWN MONEY. IT'S UP TO HIM TO MAKE SURE HIS SALARY COVERS ALL HIS EXPENSES.

Lwin

I'VE BEEN WORKING FOR THREE MONTHS. THE FIRST PAYCHECK CAME ABOUT A WEEK INTO IT. I WAS LIKE, "WOW, THIS IS NICE." I GRADUATED COLLEGE, AND I WANTED SOMETHING TO REWARD MYSELF. SO, I GOT A 46-INCH LCD.

IT WAS ABOUT $2,000. MY MOM WAS DEFINITELY WORRIED. "WHY ARE YOU SENDING SO MUCH MONEY ALREADY?" ONCE I TURNED IT ON, YOU KNOW, I HAD THE CUBS GAME ON -- MY DAD WAS LIKE, "YEAH, THIS IS PRETTY COOL." I DON'T NEED LIKE, NEW EVERYTHING, ALTHOUGH I HAVE A NICE, NEW TV. ONE OF THE BEST THINGS TO THINK ABOUT WHEN YOU'RE YOUNG, WHEN YOU'RE RIGHT OUT OF COLLEGE OR STILL IN COLLEGE IS THAT YOU WANT TO BE DELIBERATE ABOUT YOUR SPENDING.

YOU WANT TO BE DELIBERATE ABOUT YOUR SAVING. I HAVE NO PROBLEM WITH PEOPLE SPENDING WHAT THEY MAKE. YOU KNOW, WHEN YOU HAVE YOUR FIRST JOB, YOU WANT TO REWARD YOURSELF. THE PROBLEM COMES IS WHEN YOU'RE SPENDING MONEY THAT YOU DON'T HAVE.

Faison

BOTH MIN AND HIS GIRLFRIEND, TERESA, ARE ON TIGHT BUDGETS, SO THEY NEED TO MAKE EVERY DOLLAR COUNT.

Singletary

ANY TIME YOU GO SHOPPING TO DO ANYTHING, I MEAN, EVEN TO BUY A PACK OF GUM, YOU SHOULD ASK YOURSELF, "IS THIS A NEED OR IS THIS A WANT?" WHEN I GO SHOPPING, BY THE TIME I GET TO THE COUNTER, I HAVE ASKED MYSELF THIS QUESTION FOR EVERY ITEM -- ABOUT 50% OF MY CART, I HAVE PUT BACK. I MEAN, THE TELLERS HATE ME. BUT IT REALLY DOES HELP KEEP YOU IN CHECK. I DIDN'T HAVE ANY FURNITURE WHEN I CAME IN.

I GOT A FUTON -- IT WORKS AS A COUCH AND A BED, WHICH IS KIND OF NICE. A COUPLE OF TABLES, SHELVES, YOU KNOW, THINGS ON SALE. EVERYTHING'S MORE EXPENSIVE IN THE CITY, SO RENT IS ABOUT $710 A MONTH. AND UTILITIES, ABOUT $20.

CELL PHONE IS ANOTHER $50 A MONTH. I'M LIVING ON MY OWN, SO NO MORE ROOMMATES. I CAN'T SPLIT ANY OF THE EXPENSES LIKE CABLE AND INTERNET. AND I'M PAYING THE FULL, YOU KNOW, $100.

I BUY A MONTHLY PASS ON THE METRO -- THAT'S ABOUT $63 A MONTH.

Faison

SO, HOW CAN YOU FIGURE OUT HOW MUCH MONEY IS COMING IN, AND HOW MUCH IS GOING OUT? CHECK THIS OUT. FIRST STEP -- KEEP TRACK OF EVERYTHING YOU SPEND MONEY ON -- FROM CAR PAYMENTS TO CAPPUCCINO. ONCE YOU'VE DONE THIS FOR AT LEAST TWO WEEKS, YOU'LL HAVE A GOOD IDEA AT WHAT YOUR TOTAL MONTHLY EXPENSES ARE.

THEN SUBTRACT THE TOTAL FROM YOUR MONTHLY INCOME. IF YOU GET A NEGATIVE NUMBER, YOU'RE SPENDING MORE THAN YOU'RE TAKING IN, AND YOU NEED TO MAKE SOME CHANGES. YOU ALSO NEED TO DISTINGUISH BETWEEN WHAT YOU WANT AND WHAT YOU CAN AFFORD.

HORN HONKS

Faison

THE FIRST THING I DID WHEN I GOT MY OFFER LETTER FROM WORK -- I MADE AN EXCEL SPREADSHEET. AND I SAID, "OKAY, THIS IS THE AMOUNT OF MONEY I'M GETTING, AND THESE ARE THE EXPENSES THAT I'M GOING TO ANTICIPATE. I DECIDED, YOU KNOW, I WANTED TO SAVE LIKE $10,000. AND TO REACH THAT GOAL, THEN I'VE HAVE TO TRY TO KEEP, YOU KNOW, MY WEEKLY EXPENDITURES TO A CERTAIN AMOUNT.

BUT THE PROBLEM IS, IT'S REALLY HARD TO ANTICIPATE EXPENSES. IT'S NOT LIKE YOU'RE SPENDING THE SAME AMOUNT EVERY WEEK. EVERY PENNY OUGHT TO HAVE A PURPOSE.

Kobliner

WHEN YOU HAVE THAT FIRST JOB, SUDDENLY YOU'RE BUYING COFFEE. YOU'RE BUYING WATER EVERY DAY. YOU COULD EASILY SPEND $1,000 A YEAR ON WATER, WHICH YOU CAN GET FOR FREE. I HAVE A BUDGET FOR MYSELF, AND I JUST DON'T GO BEYOND WHAT I CAN.

I MEAN, OBVIOUSLY, I'D LIKE TO HAVE CERTAIN THINGS THAT I PROBABLY CAN'T HAVE. WE'RE ON A BIWEEKLY PAY, SO I GET A COUPLE HUNDRED DOLLARS EVERY TWO WEEKS. AND THAT USUALLY GOES STRAIGHT TO GROCERIES, GAS. HIS BIGGEST EXPENSE IS HIS GIRLFRIEND, SO...

YEAH, AS YOU CAN SEE. YEAH, HE GOT ME A NICE GIFT TODAY. YOU WANT TO SPEND NO MORE THAN 20% OF YOUR MONTHLY TAKE-HOME PAY ON DEBT PAYMENTS. PAY NO MORE THAN 1/3 OF YOUR TAKE-HOME PAY ON HOUSING COSTS.

YOU WANT TO SAVE 10% OF YOUR TAKE-HOME PAY. THAT'S THE GOAL. AND IF YOU COULD DO MORE, EVEN DO MORE.

Faison

TO HELP HIM MANAGE HIS MONEY, MIN LOOKED FOR A BANK. AND THERE WERE PLENTY TO CHOOSE FROM -- BOTH ONLINE AND TRADITIONAL -- WITH A WIDE RANGE OF SERVICES AND CHARGES. I THINK WHEN YOU LOOK FOR A BANK, YOU OUGHT TO LOOK AT IT JUST LIKE YOU'RE LOOKING FOR A MATE. YOU HAVE TO LOOK AT YOUR BANKING HABITS, AND CHOOSE AN INSTITUTION THAT MEETS THE THINGS THAT ARE IMPORTANT TO YOU -- JUST LIKE WHEN YOU GO OUT ON A DATE.

LAUGHS

Lwin

WHAT I WAS LOOKING FOR WAS INTEREST RATES, AND MAYBE ANY KIND OF BENEFITS OR BONUSES. FIRST GOAL WAS TO PAY OFF THE STUDENT LOANS. AND TO DO THAT, YOU KNOW, I WANTED TO TAKE MY PAYCHECK AND PUT IT INTO AN ACCOUNT WHERE I WAS GETTING A GOOD INTEREST RATE. I FOUND SOME ONLINE BANKS AND FOUND A PRETTY GOOD SAVINGS ACCOUNT, CHECKING ACCOUNT, THAT ARE TIED TOGETHER.

Kobliner

IT'S VERY IMPORTANT FOR PEOPLE TO REALIZE A BANK ACCOUNT IS A GOOD PLACE TO START YOUR FINANCIAL LIFE. YOU WANT TO FIND A BANK THAT DOESN'T CHARGE YOU IN ORDER TO KEEP A CHECKING ACCOUNT THERE WITH A LOW MINIMUM. I'M OLD-FASHIONED. I DON'T WANT TO DEPOSIT MY MONEY, MY CASH, INTO A MACHINE.

I WANT TO HAND IT TO SOMEONE AND GET HER NAME, SO IF IT DOESN'T ENTER MY ACCOUNT, I CAN COME BACK AND SAY, "GLADYS, YOU DIDN'T DEPOSIT MY MONEY."

LAUGHS

Lwin

THE THING WITH THE ONLINE BANK IS YOU CAN'T REALLY WRITE PAPER CHECKS. YOU COULD SEND CHECKS TO PEOPLE, BUT TO WRITE A CHECK QUICKLY -- THAT OPTION WASN'T AVAILABLE. THERE'S A BANK, YOU KNOW, REALLY CLOSE TO MY HOUSE HERE. SO NOW I HAVE A CHECKING ACCOUNT WITH THIS BANK, AND A CREDIT CARD.

AND THE COMBINATION OF THE TWO GIVES ME MORE REWARDS.

Kobliner

YOU PROBABLY WANT TO FIND A BANK THAT HAS A LOT OF ATMs IN YOUR NEIGHBORHOOD -- EITHER WHERE YOU WORK OR WHERE YOU LIVE. AND THAT'S BECAUSE BANKS OFTEN CHARGE YOU, ON AVERAGE, ALMOST $2 TO USE ANOTHER BANK'S ATM EVERY TIME YOU GET MONEY. I WOULD SAY YOU SHOULD WANT TO USE YOUR ATM, SAY, ONCE A WEEK. BECAUSE YOU DON'T WANT TO GO TO THE ATM EVERY DAY -- TAKE OUT $20 HERE, $40 THERE.

YOU CAN REALLY LOSE TRACK OF YOUR MONEY SO QUICKLY.

Faison

MOST CHECKING ACCOUNTS COME WITH AN ATM CARD OR A DEBIT CARD THAT ALLOWS YOU TO ACCESS THE CASH YOU DEPOSIT INTO YOUR ACCOUNT. LIKE A CREDIT CARD, YOU CAN USE A DEBIT CARD TO MAKE PURCHASES, BUT YOU'RE NOT BORROWING MONEY FROM A BANK OR A CREDIT CARD COMPANY. YOU'RE JUST WITHDRAWING IT FROM YOUR OWN BANK ACCOUNT. BUT BE CAREFUL NOT TO SPEND MORE MONEY THAN YOU HAVE IN YOUR ACCOUNT.

IF YOU DO, IT'S LIKE BOUNCING A CHECK, AND THE BANK IS LIKELY TO CHARGE YOU A BIG OVERDRAFT FEE.

Lieber

THE BIGGEST THING THAT TRIPS YOUNG PEOPLE UP WITH BANKS IS THE FEES. THERE ARE FEES FOR HAVING TOO LOW OF A BALANCE, THERE'S FEES FOR USING TOO MANY CHECKS. SO THAT'S WHAT YOU WANT TO LOOK FOR -- AN INSTITUTION THAT IS GOING TO CHARGE YOU THE LEAST AMOUNT OF MONEY TO HAVE A RELATIONSHIP.

Faison

IF YOU'RE LIKE A LOT OF PEOPLE THESE DAYS, YOU PROBABLY DO SOME OF YOUR BANKING ONLINE. YOU CAN HAVE YOUR PAYCHECK DEPOSITED DIRECTLY INTO YOUR ACCOUNT -- SAVING YOU THE TROUBLE OF GOING TO THE BANK, AND GIVING YOU ACCESS TO YOUR MONEY A LOT SOONER. YOU MAY ALSO BE ABLE TO HAVE REGULAR MONTHLY BILLS, LIKE PHONE OR CABLE, AUTOMATICALLY DEDUCTED FROM YOUR CHECKING ACCOUNT. THAT WAY, YOU NEVER MISS A PAYMENT.

EVEN IF YOU'VE GOT THE BEST BANK IN THE WORLD, IT'S STILL GOING TO BE UP TO YOU TO MANAGE YOUR MONEY WISELY.

Lwin

I THINK THE MOST IMPORTANT THING IS, YOU HAVE TO KNOW WHAT YOUR FINANCIAL GOALS ARE. I HAD A GOAL OF HOW MUCH I WANTED TO SAVE. I'LL PROBABLY HAVE ABOUT, MAYBE $700 TO $1,000 SAVED PER MONTH. PRIORITIES LEAD TO PROSPERITY.

IF YOU PUT YOUR PRIORITIES FIRST, THEN YOU WILL PROSPER. I'M ONLY 22, AND I STILL AM TRYING TO GET A FEEL FOR EXACTLY WHAT I WANT TO DO. BUT I HAVE A GENERAL PLAN FOR MY LIFE.

Faison

MIN IS WORKING HARD TO KEEP HIS FINANCIAL ACT TOGETHER, BUT HE KNOWS THERE ARE PLENTY OF WAYS TO MESS UP. FOR INSTANCE, ANY TIME YOU SPEND MORE THAN YOU'RE TAKING IN, YOU'RE PROBABLY MAKING UP THE DIFFERENCE BY GOING INTO DEBT. AMANDA McCORMICK, A SENIOR AT FLORIDA STATE IN TALLAHASSEE, CAN TELL YOU ALL ABOUT IT. SHE'S DEEP IN DEBT.

McCormick

I GO TO FLORIDA STATE UNIVERSITY, FOURTH YEAR, CREATIVE WRITING AND SOCIOLOGY MAJOR. I COMPLETELY SUPPORT MYSELF, SO, I CAME INTO COLLEGE WITHOUT ANY MONEY. I DIDN'T HAVE A JOB. FINANCIALLY, DIDN'T EXACTLY CUT IT, AS FAR AS BILLS WERE CONCERNED.

SO, NOWHERE ELSE TO TURN, I FINALLY GOT MY FIRST CREDIT CARD, WHICH WAS A $2,000 CREDIT LIMIT. ACTUALLY HAS FLORIDA STATE DECOR ON IT. THEY SENT IT TO ME IN THE MAIL. I ACTIVATED IT IN 45 SECONDS.

SPENT MONEY ON IT 20 MINUTES LATER. THINGS I SPENT THE $2,000 ON -- FOOD, TRANSPORTATION, RENT FOR MY STUDENT DORM, BOOKS -- JUST BARE NECESSITIES THAT I NEED TO BE A SUCCESSFUL STUDENT IN COLLEGE. AT THIS POINT, I WAS USING THE CREDIT TO HELP ME SURVIVE. OVER ABOUT SIX MONTHS, BETWEEN FIVE CARDS, I SPENT LESS THAN $4,000.

WITH INTEREST, LATE FEES, PENALTIES, I ACQUIRED OVER $30,000 IN DEBT. I HAVE MAYBE $5,000 DEBT, THAT'S IT. THAT'S NOT BAD. RIGHT?

THAT'S GOOD. OH, GOD, NO ONE'S GOING TO WANT TO MARRY ME AFTER THIS! I HAVE A LOT OF DEBT. IT'S ABOUT $5,000.

DEBT THAT YOU'RE RACKING UP ON YOUR CARDS -- IT'S ONLY GAINING INTEREST. AND IT'S JUST GOING TO PUT EVEN MORE STRESS AND ANXIETY IN YOUR LIFE. PEOPLE DON'T UNDERSTAND THAT THIS IS A LOAN, AND IT'S A VERY, VERY EXPENSIVE LOAN. USE A CREDIT CARD, YOU GET YOUR BILL -- YOU PAY IT OFF IN FULL.

THAT'S GOING TO KEEP YOU OUT OF TROUBLE.

Faison

MOST PEOPLE DON'T PLAN TO GET INTO TROUBLE WITH THEIR DEBTS.

McCormick

SITUATIONS WOULD OCCUR, LIFE WOULD HAPPEN, AND I WOULD HAVE TO USE THAT MONEY TO FIX MY CAR, OR WHATEVER IT IS. LIKE, THINGS HAPPEN ALL THE TIME. I WOULD MAKE VERY SPORADIC PAYMENTS ON THE CARDS. BUT THEY WEREN'T REALLY CONSISTENT, BECAUSE I NEEDED THAT MONEY FOR OTHER THINGS.

AND YOU COME OUT OF WORK, AND YOU HAVE 12 MISSED CALLS FROM CREDITORS. "WHY HAVEN'T YOU CALLED ME BACK, MISS McCORMICK?" "WELL, I'M SORRY. "I WAS AT WORK FOR THE PAST THREE DAYS STRAIGHT, TRYING TO MAKE MONEY." HI, I'M AMANDA. I'LL BE TAKING CARE OF YOU.

I'M A SERVER AT APPLEBEE'S. I LIKE THE JOB A LOT. IT'S MORE FAST-PACED, SO IT'S MORE MY STYLE. I WORK ABOUT 30 TO 35 HOURS A WEEK.

COME AND MAKE MONEY. THAT'S ALL I TRY TO DO. I'M A HUSTLER.

LAUGHS

McCormick

THIS IS PRETTY MUCH MY ONLY SOURCE OF INCOME BESIDES GRANTS AND SCHOLARSHIPS THAT I'VE GOTTEN THROUGH SCHOOL.

Faison

AMANDA'S SITUATION IS NOT THAT UNUSUAL. MOST YOUNG PEOPLE USE CREDIT CARDS, SO IT'S IMPORTANT TO PICK THE RIGHT ONE. WHEN YOU'RE COMPARING CREDIT CARD OFFERS, YOU WANT TO GET THE LOWEST INTEREST RATE POSSIBLE, AND YOU DON'T WANT TO PAY ANNUAL FEES. BUT WHEN YOU GET A CARD, YOU MIGHT FIND YOURSELF SLAPPED WITH ALL KINDS OF FEES THAT YOU NEVER EXPECTED.

CREDIT CARD COMPANIES, IN THAT LITTLE, FINE PRINT THAT YOU DON'T READ, RESERVE THE RIGHT TO CHANGE THAT INTEREST RATE AT ANY TIME. GIVEN THE PITFALLS OF CREDIT CARDS, IT'S NO SURPRISE THAT SOME EXPERTS ADVISE YOUNG PEOPLE TO AVOID USING THEM ALTOGETHER.

Singletary

THERE WAS A STUDY OUT AT M.I.T. THAT SHOWED THAT WHEN YOU USE CREDIT, YOU TEND TO SPEND ANYWHERE FROM 30% TO 100% MORE THAN IF YOU USED CASH. IF YOU CAN, STARTING OUT IN YOUR LIFE, AVOID USING CREDIT. IT IS A TRAP.

IT IS A GAME YOU CANNOT WIN. FOR THE BIG THINGS, PUT IT ON A CREDIT CARD, BUT YOU BETTER DARN WELL BE ABLE TO PAY IT OFF THAT NEXT MONTH. EVEN IF YOU PAY JUST $10 MORE THAN THE MINIMUM MONTHLY PAYMENT, YOU COULD SIGNIFICANTLY REDUCE THE NUMBER OF YEARS YOU'RE PAYING IT BACK AND THE AMOUNT OF INTEREST YOU'RE PAYING BACK.

Faison

IF YOU'RE HAVING PROBLEMS PAYING OFF YOUR CREDIT CARD, DON'T PANIC. THERE'S LOTS OF HELP AVAILABLE.

McCormick

TODAY I'M GOING TO SEE A CONSUMER CREDIT COUNSELOR. AND BASICALLY, WHAT THEY DO IS THEY HELP YOU ALLEVIATE YOUR DEBT YOURSELF. SO, YOU WANT TO GET YOUR BILLS PAID OFF, AND THEN TRY TO GET YOUR CREDIT SCORE TURNED BACK AROUND, THEN? IS THAT WHAT YOUR OBJECTIVE IS?

YES. IT WAS YEARS AGO, BEFORE I BECAME A CREDIT COUNSELOR, THAT I WAS INVOLVED WITH HELPING STUDENTS GET CREDIT CARDS. WE'D HAVE 10 PEOPLE AT A TIME SIGNING UP FOR FOUR AND FIVE CARDS. WHEN THE UPPERCLASSMEN CAME, IT WAS A WHOLE DIFFERENT STORY.

THEY WERE AVOIDING ME LIKE THE PLAGUE. AND AS I TALKED TO THEM, I LEARNED THAT MOST OF THEM WERE ALREADY IN CREDIT CARD DEBT. AND I WAS JUST SO UPSET BY THAT, I HAD TO QUIT THAT JOB. WHAT ARE THEY SAYING YOU OWE NOW?

UH, OVER $30,000. SO, THAT'S QUITE A SUBSTANTIAL AMOUNT OF MONEY -- YES, MA'AM, IT IS. OKAY.

Palmer

I HAVE PEOPLE COME IN, I SAY, "YOU GONNA BE WRITING A CHECK FROM YOUR GRAVE. YOU'RE NEVER GOING TO GET THIS PAID OFF." THOSE COMPANIES ARE GOING TO WANT A MINIMUM PAYMENT OF ABOUT 3% TO 3.5% OF THE BALANCE. THAT'S GOING TO RANGE SOMEWHERE IN THE NEIGHBORHOOD OF ABOUT $700 A MONTH. THAT'S OBVIOUSLY NOT A POSITION I'M IN RIGHT NOW.

I MEAN, I'M A STUDENT. SO, WHAT ARE MY OTHER OPTIONS? I WISH THAT YOU'D BEEN ABLE TO GET IN TO US A LITTLE SOONER, BECAUSE TYPICALLY WHAT WE CAN DO FOR PEOPLE, WHEN THEY'RE STILL WITH THE ORIGINAL CREDITORS, THEY WORK VERY WELL WITH US. AND THEY REDUCE THOSE INTEREST RATES SIGNIFICANTLY.

AND THEN WE PUT THAT INTO ONE MONTHLY PAYMENT. TYPICALLY, THAT PAYMENT IS LESS THAN...

McCormick

WHEN YOU ARE IN DEBT, WHEN ANYONE IS IN DEBT, IT'S LOOMING OVER YOU. YOU KNOW THAT YOU OWE SOMETHING TO SOMEONE. YOU KNOW THAT IF YOU WERE TO DROP DEAD, ONE OF YOUR LOVED ONES IS GOING TO OWE SOMETHING TO SOMEONE. IT FOLLOWS YOU EVERYWHERE.

Faison

I FEEL FOR AMANDA, BECAUSE I KNOW HOW CREDIT CARDS CAN GET YOU IN TROUBLE. I HAD TO GET RID OF MY CREDIT CARD EARLY ON TO KEEP FROM RUNNING IT UP. BUT CREDIT CAN BE A GOOD THING WHEN USED PROPERLY. IF YOU'RE A STUDENT LIKE AMANDA, OR A COLLEGE GRAD, CHANCES ARE, YOU COULDN'T HAVE GOTTEN YOUR EDUCATION WITHOUT THE HELP OF STUDENT LOANS.

TUITION IS AT LEAST 2 1/2 TIMES WHAT IT WAS WHEN OUR PARENTS WENT TO COLLEGE. SO, EVEN IF YOU HAVE A JOB WHILE YOU'RE IN SCHOOL, A STUDENT LOAN MAY BE THE ONLY WAY YOU CAN PAY YOUR BILLS.

Man

TYPICALLY, MOST STUDENT LOANS ARE GOING TO BE DUE SIX MONTHS AFTER YOU ARE NO LONGER A FULL-TIME STUDENT. THE PAYMENTS ARE GOING TO START THEN. IT'S ABOUT $5,000.

Faison

PETER BIELAGUS IS A FINANCIAL COUNSELOR WHO TRAVELS THE COUNTRY, TALKING TO STUDENTS ABOUT MONEY MATTERS, AND HE'S AN EXPERT ON STUDENT LOANS.

Woman

AND IN THE STUDIO WITH US THIS MORNING, WE HAVE PETER BIELAGUS, WHO IS A FINANCIAL GURU.

Bielagus

FOR THE PAST COUPLE DAYS, WE'VE BEEN AT GEORGIA SOUTHERN UNIVERSITY HERE IN STATESBORO, GEORGIA. AND I'VE BEEN VISITING CLASSROOMS, TEACHING CLASSES OR FRESHMEN ORIENTATION CLASSES. START BEFORE YOU NEED TO START. IF YOU FORGET EVERYTHING THAT I AM GOING TO SAY, I WANT YOU TO REMEMBER THIS ONE THING.

THERE IS NEVER GOING TO BE A GOOD TIME TO GET STARTED ON YOUR FINANCIAL LIFE. SO YOU MIGHT AS WELL GET STARTED TODAY.

Faison

PETER SPENDS A LOT OF TIME DURING HIS CAMPUS VISITS COUNSELING STUDENTS ONE ON ONE. MOST STUDENTS PETER MEETS HAVE QUESTIONS ABOUT THEIR STUDENT LOANS. ALWAYS DONE A GOOD JOB. DO YOU KNOW IF YOU WERE ABLE TO GET SUBSIDIZED LOANS, OR UNSUBSIDIZED?

ACTUALLY, I HAVE A MIXTURE OF BOTH. SUBSIDIZED STUDENT LOANS ARE THOSE LOANS WHERE THE GOVERNMENT IS PAYING THE INTEREST WHILE YOU ARE IN SCHOOL. AN UNSUBSIDIZED LOAN IS WHEN THE PAYMENTS ARE DEFERRED, BUT THE INTEREST STILL KEEPS ACCRUING. SO YOU GRADUATE AND THAT $10,000 HAS GROWN TO $14,000.

ONE OF THE THINGS THAT I MIGHT SUGGEST IS, FIND OUT, WHAT ARE THE MONTHLY PAYMENTS GOING TO BE ON THOSE LOANS? WHEN YOU GO TO APPLY FOR YOUR FIRST JOB, IF THEY OFFER YOU A SALARY OF "X," YOU NEED TO KNOW, WELL, QUITE FRANKLY, THAT SALARY IS NOT GOING TO COVER WHAT I'VE TAKEN OUT.

Singletary

IF YOU COME OUT OF COLLEGE AND YOU FIND THAT YOU'RE NOT MAKING ENOUGH, A LOT OF THE STUDENT LOANS NOW GIVE YOU OPTIONS. YOU CAN DO A DEFERMENT, YOU CAN DO A FORBEARANCE. THEY EVEN HAVE SOME THAT ARE INCOME-SENSITIVE, SO THAT YOUR PAYMENTS ARE BASED ON HOW MUCH INCOME YOU'RE MAKING.

Faison

BETWEEN STUDENT LOANS AND CREDIT CARDS, MANY YOUNG PEOPLE LEAVE COLLEGE OR TRADE SCHOOL WITH SIGNIFICANT DEBT. THAT DEBT CAN AFFECT THE REST OF THEIR LIVES BECAUSE IT'S REFLECTED IN SOMETHING CALLED A CREDIT SCORE. THAT SCORE MAY BE ONE OF THE MOST IMPORTANT GRADES YOU'LL EVER RECEIVE.

Woman

I DON'T KNOW WHAT A CREDIT SCORE IS. I'VE SEEN COMMERCIALS FOR IT. BUT I THINK IT DEPENDS ON HOW MUCH OF A LOAN YOU CAN GET? BUT I'M NOT SURE.

UH, IT BASICALLY CAN TELL PEOPLE HOW GOOD OR BAD YOUR CREDIT IS. THAT'S BASICALLY ALL I KNOW ABOUT IT. I THINK THE SCORE THAT YOU WANT TO HAVE IS LIKE 700. I HAVE NO IDEA WHAT MY SCORE IS, BUT I KNOW IT'S PROBABLY NOWHERE CLOSE TO THAT.

CREDIT SCORE AND CREDIT HISTORY. I KNOW THAT WHEN YOU USE YOUR CREDIT CARD, YOU TO REPAY WHAT YOU USE? WHEN YOU DO IT ON TIME, THAT AFFECTS YOUR CREDIT SCORE.

Faison

YOUR CREDIT REPORT CONTAINS A HISTORY OF EVERY CREDIT RELATIONSHIP YOU HAVE. CREDIT CARDS, DEBIT CARDS, STUDENT LOANS, CAR LOANS -- YOU NAME IT. WHEN YOU PAY YOUR BILLS ON TIME OR REDUCE YOUR CREDIT CARD BALANCE, YOUR CREDIT SCORE GETS BETTER. IF YOU MISS A PAYMENT OR MAX OUT ON YOUR CREDIT CARD, YOUR SCORE GOES DOWN.

YOUR CREDIT SCORE LITERALLY SETS THE INTEREST RATE ON ANY MONEY THAT YOU BORROW. MAYBE TOMORROW, YOU AND I BOTH GO TO BUY THE EXACT SAME CAR ON THE EXACT SAME DAY. BECAUSE OF MY TERRIBLE CREDIT SCORE, I WILL PAY $7,000 MORE IN INTEREST TO BUY THAT CAR, THAN HE WILL, SIMPLY BECAUSE OF THIS ONE NUMBER. ONE OF THE BEST THINGS THAT YOU CAN DO IS TO CHECK THAT CREDIT REPORT EVERY YEAR FOR THE REST OF YOUR LIFE.

THERE ARE THREE COMPANIES THAT KEEP TRACK OF YOUR CREDIT HISTORY. YOU'RE ENTITLED TO GET A FREE COPY OF YOUR CREDIT REPORT ANNUALLY FROM EACH COMPANY, SO YOU CAN SEE WHAT THE LENDERS WILL SEE WHEN YOU APPLY FOR A LOAN OR A CREDIT CARD. IF YOU DECIDE TO USE A CREDIT CARD, REMEMBER TO COMPARE OFFERS CAREFULLY. PAY YOUR WHOLE BILL ON TIME TO AVOID PENALTY CHARGES, AND CHECK YOUR CREDIT REPORT AT LEAST ONCE A YEAR.

YOUR FINANCIAL FUTURE IS RIDING ON IT. SO MAKE SURE IT'S RIGHT. BABY BABY THE SITUATION THAT'S MY GIRL, D. WOODS, FROM ATLANTA.

I FIRST MET HER WHEN SHE WAS A MEMBER OF DANITY KANE -- THE PLATINUM-SELLING POP GROUP THAT GOT ITS START ON THE TV SERIES "MAKING THE BAND." NOW SHE'S TRYING TO MAKE IT ON HER OWN. SHE'S ALREADY GAINED FAME, BUT SHE'S STILL WORKING ON HER FORTUNE.

Woods

I'VE BEEN A PART OF THE ENTERTAINMENT WORLD SINCE I WAS VERY YOUNG. I STARTED OFF IN DANCE SCHOOL WHEN I WAS ABOUT THREE YEARS OLD. MY SISTER AND I GOT INTO THEATER. I GOT INTO RECORDING MUSIC.

I DIDN'T EVEN THINK ABOUT REALLY GETTING PAID FROM IT. IT WAS JUST WHAT I WANTED TO DO FOREVER. DANITY KANE WAS FORMED ON A REALITY SHOW CONTEST. THOUSANDS OF GIRLS TRIED OUT, AND I WAS ONE OF THE FIVE GIRLS THAT WERE CHOSEN.

OUR DEBUT ALBUM DEBUTED AT NUMBER ONE ON THE BILLBOARD CHARTS, WHICH WAS TOTALLY UNEXPECTED -- BY SOME -- BUT IT WAS WHAT I MEANT TO DO FROM THE VERY BEGINNING. IT TAKES A LOT OF MONEY TO SUPPORT A POP GROUP, ESPECIALLY BEING FEMALES, BECAUSE THERE'S THE GLAM SQUAD, THERE'S THE WARDROBE, SO IT GETS REALLY EXPENSIVE. AND, YOU KNOW, THE RECORD LABEL EITHER HAS TO PAY FOR IT OR WE PAY FOR IT OUT OF OUR POCKETS. I'VE SAVED, JUST TO BE ABLE TO CONDUCT BUSINESS, SINCE THERE'S A LOT OF THINGS I HAVE TO PAY FOR MYSELF.

LAUGHS

Faison

BEFORE JOINING DANITY KANE, D. WAS TRYING TO MAKE IT ON HER OWN IN NEW YORK CITY. BUT SHE WAS HAVING TROUBLE MAKING ENDS MEET.

Woods

SO I DECIDED TO MOVE BACK HOME TO ATLANTA. I WAS LIKE, "HMM, "BUT THEN WHO WANTS TO LIVE AT HOME? "MY MOTHER'S GOING TO BE IN MY FACE. SHE'S ALL IN MY BUSINESS." BUT SOMETIMES YOU JUST HAVE TO MAKE THAT SACRIFICE.

IT WAS A REALLY GOOD DECISION, BECAUSE IT TOOK A LOT OF PRESSURE OFF ME. IT WAS DEFINITELY GOOD FOR ME TO SAVE, BECAUSE I WAS ABLE TO GET THE CAR THAT I REALLY WANTED. I CALL HER, "MIRNA THE MERCEDES." ONCE I DID START MAKING MONEY, ME AND MY MOTHER DECIDED TO REFINANCE THE HOME. AND SO I'M PAYING PART OF THE MORTGAGE.

SO IT'S LIKE I HAVE EQUITY IN THIS HOUSE, AS WELL.

Faison

BY JOINING FORCES WITH HER MOM, D. WAS ABLE TO BEGIN SAVING.

Woods

MY MOTHER DEFINITELY SAT ME DOWN WHEN I GOT MY FIRST BIG CHECK, AND SHE SAID, "LOOK, "TAKE THIS AND PUT IT OVER HERE. FORGET THAT YOU EVEN HAD IT." AND IT DEFINITELY CAME IN HANDY, BECAUSE IT WAS A BIG DRY SPELL, AND IT WAS SCARY.

Faison

TODAY, SHE HAS THREE DIFFERENT BANK ACCOUNTS, WHICH KEEPS HER ORGANIZED AND MAKES IT EASIER FOR HER TO BUDGET AND SAVE.

Woods

FIRST, I HAVE A CHECKING ACCOUNT. AND I HAVE A SAVINGS ACCOUNT ATTACHED TO THAT CHECKING ACCOUNT. BUT THEN, I HAVE ANOTHER SAVINGS ACCOUNT, AND THAT'S AT A CREDIT UNION. THEN I HAVE A CD, WHICH I CAN'T TOUCH, AND THAT GAINS MORE INTEREST.

THIS JACKET IS CUTE.

Kobliner

A CD, OR CERTIFICATE OF DEPOSIT, IS LIKE A SAVINGS ACCOUNT, EXCEPT THAT YOU PROMISE THAT YOU'LL KEEP YOUR MONEY IN THERE FOR A SET, LONGER-PERIOD AMOUNT OF TIME. MAYBE A YEAR, OR EVEN AS LONG AS FIVE YEARS. AND YOU GET, USUALLY, A HIGHER RATE ON A ONE-YEAR CD THAN YOU WOULD GET FROM A BANK SAVINGS ACCOUNT.

Woods

I GUESS THE CONCERN IS JUST HOW TO, NUMBER ONE, GET THE MONEY BEFORE YOU CAN SAVE IT. BEING IN THE ENTERTAINMENT INDUSTRY, IT'S NOT A SECURE INCOME. SOMETIMES, YOU'LL MAKE A LOT OF MONEY IN THE MONTH OF NOVEMBER, AND YOU WON'T MAKE ANY MONEY UNTIL FEBRUARY. 5, 6, 7.

WITH YOUR 1, 2... THAT'S THE BEAUTIFUL THING ABOUT HOW I WAS TRAINED, BECAUSE MY INSTRUCTORS ALWAYS INSTILLED IN ME TO BE A WELL-ROUNDED ARTIST. SO I GO FROM BEING A RECORDING ARTIST TO BEING A CHOREOGRAPHER TO BEING AN ACTRESS TO BEING A WRITER -- ALWAYS THINKING OF WAYS TO KEEP WORKING. I AM TAKING OVER THE WORLD.

LAUGHTER

Kobliner

IN TOUGH ECONOMIC TIMES, PEOPLE REALLY NEED TO HAVE A SET SAVINGS CUSHION FOR THEMSELVES, OF MONEY. AND THE KEY IS TO SAVE THREE MONTHS' WORTH OF LIVING EXPENSES IN THAT FUND.

Faison

WHILE IT MAY TAKE YOU A WHILE TO BUILD THAT FUND, REMEMBER THAT YOUR SAVINGS WILL BE EARNING YOU MONEY. THE BANK PAYS YOU INTEREST FOR THE USE OF YOUR MONEY WHILE IT'S DEPOSITED. THE INTEREST RATE MAY BE JUST 2% OR 3% A YEAR, BUT IF YOU JUST STASHED IT AT HOME, YOU'D ACTUALLY BE LOSING MONEY, SINCE THE COST OF EVERYTHING IS GOING UP, AND YOUR MONEY WOULDN'T BE GROWING.

Woods

WHEN IT COMES TO SEEING MY INTEREST GROW, AND KNOWING THAT I'M SAVING, AND KNOWING THAT I'M BUILDING EQUITY, IT DOES FEEL GOOD. YOU KNOW, YOU SEE THOSE STORIES ABOUT PEOPLE WHO WERE ON TOP OF THE WORLD AT ONE POINT, AND THEN IT'S LIKE, "WHERE ARE THEY NOW?" THEY'RE BROKE OR THEY DIED IN DEBT. I DEFINITELY DON'T WANT TO BE ONE OF THOSE STORIES. SO I'M JUST GOING TO KEEP SAVING.

Faison

D.'s GOT HER ACT TOGETHER. BUT A LOT OF US HAVE A HARD TIME THINKING LONG-TERM WHEN WE'RE YOUNG. I LIKE TO GO OUT, SO I SPEND MOST OF MY MONEY, AND I DON'T REALLY SAVE ANYTHING. I DEFINITELY PUT A LOT OF MONEY AWAY FOR ANY TYPE OF EMERGENCIES, ESPECIALLY WITHIN A SAVINGS ACCOUNT.

MY MOM TELLS, LIKE, "DO YOU WANT TO LIKE SPEND THAT PAYCHECK ON COFFEE, OR DO YOU WANT TO SAVE IT FOR LATER?" SO...I USUALLY CHOOSE THE COFFEE, THOUGH.

LAUGHS

Faison

I'M NOT SAVING ANY MONEY RIGHT NOW. I'M LIVING BASICALLY PAYCHECK TO PAYCHECK. THOSE WHO DO START SAVING EARLY ARE PUTTING TIME ON THEIR SIDE.

Woman

MY NAME IS MARIA LUISA CORTEZ. AND I'M CURRENTLY A CO-OWNER OF A MEXICAN RESTAURANT CALLED EL MAGUEY Y LA TUNA. IT'S A FAMILY-RUN RESTAURANT. WE'VE EXISTED SINCE 1992.

Faison

MARIA WORKED IN THE CORPORATE WORLD, BUT WAS DRAWN BACK TO THE FAMILY BUSINESS, WHERE SHE PUT ALL HER SKILLS TO WORK.

Cortez

THIS IS A TRADITION THAT WE DO EVERY MORNING, LIKE, OUR FIRST CUSTOMER, WE GO LIKE THIS. TODAY, WE HAVE OUR FIRST SALE, AND THEY PAID US WITH A HUNDRED. PRETTY GOOD. THE MISSION OF THE RESTAURANT IS TO BE THE NUMBER-ONE MEXICAN RESTAURANT HERE ON THE LOWER EAST SIDE.

IT'S VERY RARE FOR SOMEONE MY AGE TO KNOW THESE TRADITIONAL DISHES. THE MOLE SAUCES -- THAT'S WHAT WE HAVE TO OFFER TO THE LOWER EAST SIDE AND TO NEW YORK CITY. MY MOM DOES THE MOLES THE TRADITIONAL WAY.

SPEAKS SPANISH

Cortez

OUR CHILES, WE DO NOT USE CAN OR PRESERVATIVES. WE GRIND THEM, WE ROAST THEM, WE HAVE CERTAIN MACHINERY FROM BACK IN THE DAY -- CON EL MOLINO.

SPEAKS SPANISH

LAUGHTER

Cortez

WE WANT OUR RESTAURANT TO TAKE US TO OUR RETIREMENT. WHEN YOU'RE WORKING WITH PEOPLE THAT WANT TO RETIRE, YOU START THINKING LIKE, WHAT THEY DID RIGHT AND WHAT THEY DID WRONG. MY MOM JUST SHOWED ME WHAT SHE'S GOING TO BE GETTING FOR SOCIAL SECURITY, AND HONESTLY, IT'S VERY LITTLE. I'M NOT GOING TO DEPEND ON SOCIAL SECURITY.

I WANT TO BE IN A BETTER SITUATION.

Faison

WHEN CONSIDERING RETIREMENT, IT CAN PAY TO TALK TO AN EXPERT. MARIA SAT DOWN WITH A FINANCIAL ADVISER TO DISCUSS HER OPTIONS AND LEARN MORE ABOUT SAVING FOR HER FUTURE. SO I'M NOT ONLY THINKING ABOUT MYSELF. I GOT TO THINK ABOUT MY MOM AND MY DAD -- THINKING ABOUT HOW THEY'RE GOING TO RETIRE FROM THIS BUSINESS.

UNDERSTOOD. THERE ARE TWO APPROACHES. ONE APPROACH IS TO OPEN UP A RETIREMENT PLAN THROUGH YOUR BUSINESS. ALTERNATIVELY, YOU CAN ESTABLISH AN I.R.A.

ACCOUNT. AN INDIVIDUAL RETIREMENT ACCOUNT, OR I.R.A., IS A PRIVATE SAVINGS PLAN SET UP WITH A BANK, BROKER, OR OTHER FINANCIAL INSTITUTION. LIKE ALL OTHER RETIREMENT PLANS, I.R.A.s ALLOWS INDIVIDUALS TO SET ASIDE MONEY EACH YEAR THAT WILL EARN INTEREST TAX-FREE.

Kobliner

WHEN MONEY'S ABLE TO GROW WITHOUT YOU HAVING TO PAY TAX ON IT, IT GROWS EVEN FASTER.

Singletary

MY FIRST DAY ON MY JOB, I WENT TO MY BENEFITS OFFICE, AND I SET UP SO THAT AUTOMATICALLY, A CERTAIN PERCENTAGE WAS TAKEN OUT OF MY PAYCHECK BEFORE I SAW IT, EVERY SINGLE PAYCHECK.

Faison

ANOTHER GREAT WAY TO SAVE, IF YOU WORK FOR A COMPANY THAT OFFERS ONE, IS A RETIREMENT PLAN THAT MAYBE CALLED A "401(k)." IF YOUR JOB OFFERS ONE, YOU SHOULD ABSOLUTELY TAKE ADVANTAGE OF IT. FOR EVERY DOLLAR YOU CONTRIBUTE TO IT, YOUR COMPANY MAY MATCH IT IN FULL OR IN PART. THINK THERE'S NO SUCH THING AS FREE MONEY? WRONG -- THIS IS IT.

Singletary

YOU SHOULD START SAVING FOR RETIREMENT THE DAY YOU GET YOUR FIRST JOB. IF THEY HAVE A RETIREMENT PLAN, JOIN IT THAT DAY YOU START. WHEN YOU START IN YOUR 20s AND START TO SAVE LONG-TERM. EVEN STARTING AT 23 COULD MAKE A HUGE DIFFERENCE BETWEEN STARTING AT 33.

YOU CAN END UP WITH TENS OF THOUSANDS OF DOLLARS MORE, JUST BY STARTING EARLY.

Faison

ALL OF THESE INVESTMENT OPTIONS FEATURE A LITTLE BIT OF MAGIC CALLED, "COMPOUND INTEREST." HERE'S HOW IT WORKS. LET'S SAY WHEN YOU'RE 23, YOU START SAVING 50 BUCKS A MONTH IN A TAX-SHIELDED ACCOUNT THAT EARNS 7% INTEREST. AS INTEREST GETS ADDED TO THE ACCOUNT EACH MONTH, YOUR MONEY GROWS. SO THE NEXT TIME AROUND, YOU'RE GETTING 7% OF A LITTLE MORE MONEY -- INTEREST ON YOUR INTEREST.

BY THE TIME YOU'RE 65, COMPOUND INTEREST WILL TURN YOUR MONTHLY INVESTMENT OF $50 INTO $154,000. BUT START SAVING EARLY. IF YOU WAITED UNTIL YOU WERE 33 TO START, YOU'D ONLY END UP WITH ABOUT $72,000. MARIA HAS A LOT TO CONSIDER AS SHE HELPS HER PARENTS PREPARE FOR RETIREMENT, AND PLANS HER OWN.

Cortex

I WOULD LIKE TO RETIRE AT 55. I WOULD LIKE TO LIVE IN MEXICO. I WANT TO GO BACK AND FORTH TO NEW YORK, BECAUSE I WANT TO SEE MY FAMILY. I SEE MYSELF RELAXED IN MY SUMMER HOME IN MEXICO.

Faison

I DIDN'T GET SERIOUS ABOUT SAVING FOR RETIREMENT UNTIL I TURNED 30, BUT I WISH I HAD STARTED SOONER -- NOT JUST FOR MYSELF, BUT FOR MY KIDS. KIDS GIVE YOU SOMETHING TO THINK ABOUT BESIDES YOURSELF. BUT HOW CAN YOU PROVIDE FOR THEM IF YOU GET SICK OR AREN'T ABLE TO WORK? YOU GOT TO HAVE INSURANCE -- WHETHER YOU'RE A PARENT OR NOT.

YOU'RE ABOUT TO MEET A WOMAN WHO'S BEEN THROUGH LIFE'S UPS AND DOWNS. SHE'S A SINGLE MOM WITH TWO KIDS AND A GOOD JOB. BUT SHE'S SEEN THE OTHER SIDE OF LIFE. SO NOW SHE'S READY FOR WHATEVER COMES HER WAY.

MEET ROCHELLE JAMES FROM MY HOMETOWN -- NEW YORK CITY.

James

WE'RE AT THE SOUTH FERRY TRAIN STATION, WHICH IS UNDERNEATH STATEN ISLAND FERRY. WHAT WE'RE DOING IS BUILDING A WHOLE BRAND-NEW STATION. I CAN POINT TO SEVERAL BUILDINGS ACROSS NEW YORK CITY, AND SHOW MY FAMILY, MY FRIENDS THAT I WORKED THERE, THAT I PUT THE LIGHTS IN, AND I'M VERY PROUD OF THAT.

Faison

ROCHELLE IS AN ELECTRICIAN WITH A UNION JOB THAT GIVES HER MANY FRINGE BENEFITS, MOST IMPORTANTLY, HEALTH INSURANCE.

James

WE HAVE AN EXCELLENT MEDICAL PLAN THAT COVERS MY WHOLE FAMILY. MY DAUGHTER'S EIGHT YEARS OLD. THANK GOD, SHE'S HEALTHY. BUT, YOU KNOW, SUPPOSE SHE HAD ASTHMA, OR SUPPOSE SHE HAD SOME KIND OF AILMENT THAT WOULD HAVE NEEDED SPECIAL CARE -- OUR UNION PROVIDES EXCELLENT HEALTH CARE, SO, I WOULDN'T HAVE TO WORRY ABOUT IT.

Faison

THINGS WEREN'T ALWAYS SO GOOD FOR ROCHELLE.

James

I DIDN'T COME FROM A POOR BACKGROUND, BUT BECAUSE OF UNFORTUNATE CIRCUMSTANTIATES, I DID END UP AT THE VERY BOTTOM. WHEN MY MOM PASSED AWAY, I FELL INTO LIKE A DEPRESSION STATE.

Faison

AT 22, WITH A NEW BABY AND A YOUNGER SISTER TO SUPPORT, ROCHELLE WAS SOON FACING FINANCIAL DISASTER.

James

I TOOK DEAD-END JOBS JUST TO MAKE A LITTLE BIT OF MONEY TO GET AHEAD. SO IT WAS VERY FRUSTRATING, AND IT SEEMED LIKE THERE WAS NO HOPE, BUT I KEPT PUSHING.

Faison

ROCHELLE NOT ONLY NEEDED A HIGHER-PAYING JOB, BUT ONE WITH GOOD BENEFITS. SHE FOUND OUT ABOUT AN INNOVATIVE PROGRAM CALLED "NONTRADITIONAL EMPLOYMENT FOR WOMEN," OR NEW, WHICH TRAINS WOMEN TO COMPETE FOR SKILLED JOBS IN CONSTRUCTION AND OTHER BLUE-COLLAR TRADES. AFTER SUCCESSFULLY COMPLETING THE PROGRAM, SHE'S NOW A JOURNEYMEN ELECTRICIAN.

James

I AM ON MY WAY TO SECURITY. I WON'T SAY THAT I'M FULLY SECURE YET. I HOPE TO STAY WITH THIS COMPANY -- THEY'RE MAKING IT HAPPEN -- AND BUILD THIS WONDERFUL RELATIONSHIP, AND MAKE A LOT OF MONEY. PRETTY GOOD.

THANK YOU. KEEP UP THE GOOD WORK. THANK YOU. MY PAYCHECK.

I GET PAID, UH, $47 AN HOUR. SO, IT'S A NICE CHECK AT THE END OF THE WEEK. IT FEELS GREAT. I FEEL INDEPENDENT FINANCIALLY.

AND, UH, WHEN THERE'S OVERTIME, IT'S EVEN BETTER. SO I ENJOY WORKING, AND I ENJOY PAYDAYS. THE UNION IS LOCAL UNION NUMBER 3, IBW, WHICH STAND FOR INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS. MAYBE ONE DAY THEY'LL CHANGE IT TO, "BROTHER AND SISTERHOOD." OUR UNION PROVIDES EXCELLENT HEALTH CARE.

HEALTH CARE SHOULD BE A NECESSITY, NOT AN OPTION.

Kobliner

YOU KNOW, IT'S AMAZING TO ME -- WITH ALL THE TALK IN OUR COUNTRY ABOUT HEALTH INSURANCE, 20 MILLION PEOPLE, AGE 18 TO 34, STILL DON'T HAVE IT. IT'S A HUGE PROBLEM. IDEALLY, YOU GET IT FROM YOUR JOB, BUT IF YOU DON'T HAVE A JOB THAT GIVES YOU HEALTH INSURANCE, SEE IF THERE'S SOME ORGANIZATION YOU CAN JOIN TO GET HEALTH INSURANCE. WHATEVER IT IS, YOU WANT TO MAKE SURE TO HAVE HEALTH INSURANCE.

Woman

I GO TO THE DOCTOR LIKE EVERY TWO WEEKS TO A MONTH, SO I REALLY NEED TO HAVE MY HEALTH COVERAGE. I'M NOT EXTREMELY CONCERNED ABOUT NOT BEING ON A HEALTH PLAN. I'D LIKE TO GET A JOB THAT ACTUALLY HAS INSURANCE BENEFITS, HIGHER SALARY. I CURRENTLY DO NOT HAVE HEALTH INSURANCE, WHICH IS VERY SAD.

I DID, A FEW MONTHS AGO, AND I'M IN THE PROCESS OF SHOPPING, BECAUSE IT'S VERY EXPENSIVE.

Faison

WHEN YOU'RE YOUNG AND HEALTHY, IT'S HARD TO IMAGINE THAT A SERIOUS ILLNESS OR ACCIDENT COULD BRING YOU DOWN. HEALTH INSURANCE ISN'T CHEAP, BUT THE COST OF NOT HAVING IT CAN BE VERY EXPENSIVE. IF YOU'RE UNINSURED, YOU CAN END UP WITH THOUSANDS OF DOLLARS IN MEDICAL BILLS.

SCREAMS

Faison

IF YOU CAN'T PAY THEM, YOU COULD LITERALLY LOSE EVERYTHING. INSURANCE IS COMPLICATED, WITH ALL THOSE APPLICATIONS AND FORMS, BUT YOU CAN FIND A LOT OF EXPERT HELP ONLINE. IF YOU HAVE DEPENDENTS, LIKE ROCHELLE, YOU ALSO NEED PROTECTION IF SOMETHING SHOULD HAPPEN TO YOU.

James

LIFE INSURANCE IS VERY IMPORTANT. MY CHILDREN ARE GOING TO BE DEPENDING ON MY SAME INCOME IF I DIE. I HAVE $350,000 WORTH OF INSURANCE. IT'S STILL A LITTLE LOW.

BUT I FIGURED, AS TIME GOES ON, AND THE MORE MONEY THAT I MAKE, I CAN INCREASE MY INSURANCE. SO, IF ANYTHING HAPPENS TO ME NOW, IN 20 YEARS, MY CHILDREN WILL BE FINE. SIMPLY, BECAUSE I'LL GET ON THE INTERNET AND LIKE SAY...

Faison

ROCHELLE IS INTENT ON HELPING OTHER WOMEN BECOME ECONOMICALLY SELF-SUFFICIENT. SO SHE SERVES AS A MENTOR IN A FINANCIAL LITERACY CLASS SPONSORED BY FINANCIAL WOMEN'S ASSOCIATION OF NEW YORK THAT SHE WENT THROUGH JUST A FEW YEARS AGO.

Woman

MOST OF THE WOMEN IN THIS CLASS ARE UNION EMPLOYEES. THEY WILL GET THEIR HEALTH INSURANCE THAT WAY. THEY HAVE COME TO BE TRAINED. SO THAT WILL BE LOOKING AT THEIR CASH FLOW, LOOKING AT THEIR GOAL LIST, AND FIGURING OUT HOW WE CAN GET THEM THE HELP THAT THEY NEED.

LET'S GIVE SOME EXAMPLES OF WHAT NEEDS MIGHT BE. I'LL SAY THE FIRST ONE COULD BE FOOD, MEDICAL, SHELTER. LET'S GO TO OUR WANTS -- JEWELRY, CAR, EATING OUT. AND THEN WE HAVE TO DECIDE, WHAT ARE WE GOING TO SACRIFICE IN ORDER TO GET OUR WANTS?

Diamond

THE BIGGEST REASON PEOPLE GO BANKRUPT IS BECAUSE THEY HAD A HEALTH EMERGENCY, AND THE BILLS WERE SO OVERWHELMING THAT THERE'S NO WAY THEY COULD POSSIBLY PAY THEM. THE FACT IS, WE ALL NEED TO HAVE HEALTH INSURANCE. BECAUSE YOU CANNOT JUST GO FROM EMERGENCY TO EMERGENCY, AND EXPECT TO GET ANYWHERE. THANK YOU ALL, FOR BEING HERE TONIGHT.

Faison

BUT, OF COURSE, THERE'S A LOT MORE TO INSURANCE THAN JUST MEDICAL COVERAGE AND LIFE INSURANCE.

James

RENTER'S INSURANCE IS THE ONLY THING THAT I DON'T HAVE, THAT I'M REALLY CONSIDERING. BECAUSE I'VE TAKEN MY HARD-EARNED MONEY AND BOUGHT CERTAIN THINGS FOR MYSELF, CERTAIN TOYS, AND IF SOMETHING HAPPENS TO IT, YOU KNOW, HOW AM I GOING TO REPLACE IT? THAT'S THOUSANDS OF DOLLARS DOWN THE DRAIN.

Kobliner

IT DOES MAKE SENSE TO GET RENTER'S INSURANCE, BECAUSE IT COVERS YOU FOR ANY DAMAGE THAT HAPPENS, AND THE TRUTH IS, IT'S NOT THAT EXPENSIVE.

Faison

ROCHELLE HAS TURNED HER LIFE AROUND, AND NOW SHE IS SERVING AS AN INSPIRATION TO OTHERS. HER PHOTO WILL BE SEEN IN NEW YORK CITY'S SUBWAYS, ENCOURAGING OTHER WOMEN TO GET THE TRAINING THEY NEED TO COMPETE FOR SKILLED JOBS. I REALIZE NOW, HOW IT IS OUT HERE -- HOW HARD IT IS TO MAKE A LIVING AND TAKE CARE OF A FAMILY. SO, WHATEVER YOU HAVE TO DO, GET UP.

IF YOU HAVE TO GO AND SELL SHOELACES JUST TO MAKE SOME MONEY FOR THAT DAY, TO EAT -- DO WHAT YOU HAVE TO DO. DON'T SIT AROUND AND FEELING SORRY FOR YOURSELF. THAT'S THE ONE THING I DIDN'T DO. I DIDN'T SIT AROUND, AND I DIDN'T BEG.

I WENT OUT AND I WORKED, EVERY DAY, UNTIL I GOT TO THIS POINT. IT'S A LOT EASIER TO PLAN YOUR FINANCES WHEN YOU'RE GETTING A REGULAR PAYCHECK. BUT A LOT OF PEOPLE CHOOSE THE FREELANCE LIFE, OR THEY RUN THEIR OWN BUSINESSES, AND THE INTERNET HAS MADE IT A LOT EASIER TO DO THIS. BUT BEING YOUR OWN BOSS BRINGS WITH IT A LOT OF FINANCIAL RESPONSIBILITIES.

THAT'S WHAT TIM BOUCHARD OF BUFFALO IS FINDING OUT.

Bouchard

COMING OUT OF SCHOOL, I GOT THE NORMAL, PROFESSIONAL OFFICE JOB. I WAS HIRED BY A WEB DESIGN FIRM TO TAKE ON DESIGN WORK AND HELP COMPLETE THE PROJECTS. AFTER PICKING UP TRICKS OF THE TRADE, I DECIDED TO BREAK OFF INTO MY OWN BUSINESS, BECAUSE I PERSONALLY LOVE HAVING CREATIVE CONTROL AND A CLOSE RELATIONSHIP WITH THE CLIENTS FROM START TO FINISH. I SET UP MY OFFICE IN THE SUN ROOM OF MY APARTMENT.

MY COMPANY'S NAME IS SHARPCUT MEDIA. IT OFFERS WEB DESIGN AND CONSULTING SERVICES TO A LOT OF SMALL BUSINESS CLIENTS. THE OFFICE FURNITURE CENTER IS THE MOST TRAFFICKED, FOLLOWED UP BY BGI INTERIORS. EVERYTHING SHOULD BE, IN MY EYES, COLORFUL AND STAND OUT -- VIBRANT, BUT NOT GAUDY AND OBNOXIOUS.

RIGHT NOW, I'M IN A BUILDING PROCESS -- BUILDING MY CLIENTELE, BUILDING MY RELATIONSHIPS WITH LOCAL BUSINESSMEN. AND AS THOSE PROGRESS, MY PRICES CAN PROGRESS. NO PROBLEM, YOU KNOW WHERE TO FIND ME.

Faison

WHILE TIM ENJOYS THE FREEDOM OF BEING HIS OWN BOSS AND THE POTENTIAL FOR A GOOD INCOME, HE'S FOUND THAT GETTING NEW BUSINESS IS A JOB ALL IN ITSELF.

Bouchard

ONE OF THE DOWNSIDES TO BEING SELF-EMPLOYED ARE THAT WORKFLOW IS NOT ALWAYS CONSISTENT. I SPEND ABOUT 20% OF MY WEEK SEARCHING OUT NEW JOBS.

Faison

MANY OF TIM'S JOB LEADS COME FROM FRIENDS AND COLLEAGUES, AND HE IS OFTEN ABLE TO RETURN THE FAVOR BY PARTNERING WITH THEM ON PROJECTS.

Man

WHAT I DO IS MARKETING DESIGN, ILLUSTRATION, BROCHURES, SMALL BUSINESSES WHO NEED LOGOS -- WHATEVER BUSINESS COMES MY WAY, PRETTY MUCH. I MEAN, IS THERE A LIMIT ON HOW MANY DESIGN CONCEPTS THAT I CAN ACTUALLY POST ON THERE? NO, AS LONG AS --

Bouchard

TO HAVE SOMEONE ELSE TO COLLABORATE WITH, LIKE MIKE, IS A GREAT RESOURCE TO HAVE, AND IT OFFERS THE CLIENTS MORE OPTIONS, AS WELL.

Faison

ANOTHER THING TO CONSIDER WHEN RUNNING YOUR OWN BUSINESS IS HOW MUCH IT WILL COST TO OPERATE ON A DAY-TO-DAY BASIS. YOU CAN'T MAKE MONEY WITHOUT SPENDING MONEY. SO A LOT OF THE THINGS, LIKE COPY PAPER, PENS COST YOU MONEY, AND YOU HAVE TO TAKE THAT INTO CONSIDERATION. SOME OF THE MORE COSTLY THINGS OF RUNNING A BUSINESS ARE MAKING SURE THAT YOU HAVE THE LATEST TECHNOLOGIES AND THE LATEST PROGRAMS.

YOU DO GET SOME TAX BREAKS, LIKE DEDUCTIONS FOR EQUIPMENT, MILEAGE, BASIC NECESSITIES, THAT YOU NEED TO PERFORM YOUR BUSINESS TASKS ON A DAILY BASIS. WHILE YOU CAN CLAIM TAX DEDUCTIONS FOR YOUR BUSINESS EXPENSES, YOU ALSO HAVE TO KEEP CAREFUL RECORDS FOR THE IRS. THE GOVERNMENT EXPECTS YOU TO PAY YOUR TAXES AS YOU EARN YOUR INCOME. IF YOU WORK FOR A COMPANY, YOUR TAXES ARE USUALLY WITHHELD FROM YOUR PAYCHECK.

SAME THING WITH SOCIAL SECURITY AND MEDICARE -- THAT ITEM CALLED "FICA" ON YOUR PAY STUB. AND IF YOU HAVE A MEDICAL PLAN AT WORK, YOUR PORTION OF THE PREMIUM IS ALSO WITHHELD. BUT IF YOU'RE SELF-EMPLOYED, LIKE TIM, YOU GET TO ENJOY THE FREEDOM TO MAKE YOUR OWN HOURS AND BE YOUR OWN BOSS. BUT WHEN YOU GET PAID FOR YOUR WORK, THERE'S USUALLY NOTHING WITHHELD.

YOU HAVE TO TAKE CARE OF ALL THAT YOURSELF.

Bouchard

A LOT OF PEOPLE THINK YOU GET A CHECK FOR $1,000, AND YOU CAN RUN TO THE MALL AND BUY WHATEVER YOU WANT. BUT A LOT OF THAT MONEY SHOULD BE SAVED FOR TAXES, FOR HEALTH INSURANCE, FOR BUSINESS COSTS. IF YOU DON'T PREPARE YOURSELF FOR THAT, YOU MIGHT OWE A FEW THOUSAND DOLLARS AT THE END OF THE YEAR, AND THAT'S A BIG EXPENSE TO PULL OUT OF NOWHERE. IT'S A PAY-AS-YOU-GO TAX SYSTEM -- MEANING, THE GOVERNMENT WANTS THEIR MONEY AS YOU EARN YOUR MONEY.

IF YOU HAVE NOT PAID ENOUGH INTO THE TAX SYSTEM BASED ON YOUR INCOME, YOU ARE PENALIZED FOR THAT. THE IRS DOES NOT PLAY. THEY WILL COME AFTER YOU, AND THE PENALTIES FOR NOT PAYING ARE STIFF. I HAVE A 30% RULE.

I AT LEAST MAKE SURE I TAKE 30% TO 35% AND SAVE THAT SPECIFICALLY FOR TAXES. I'D TAKE ANYWHERE FROM 15% TO 20% TO SAVE TOWARDS BUSINESS EXPENSES AND HEALTH INSURANCE.

Faison

WHILE ROCHELLE JAMES GETS HEALTH INSURANCE FROM HER JOB, IF YOU'RE SELF-EMPLOYED LIKE TIM, YOU HAVE TO DO IT YOURSELF.

Lieber

IF YOU'RE ON YOUR OWN, IF YOU DON'T HAVE EMPLOYER-PROVIDED HEALTH INSURANCE, ONE THING YOU CAN DO FOR YOURSELF IS BUY SOME KIND OF POLICY THAT TAKES CARE OF YOU IN A CATASTROPHE. SO YOU'RE STUCK WITH THE FIRST $1,000 IN BILLS, OR THE FIRST $5,000 IN BILLS. THOSE WON'T RUIN YOU, PROBABLY.

Kobliner

IF YOU DON'T HAVE A JOB THAT GIVES YOU BENEFITS, SEE IF THERE'S SOME ORGANIZATION YOU CAN JOIN. IF YOU'RE AN ACTOR -- MAYBE AN ACTORS' ORGANIZATION, OR A WRITER -- A WRITERS' GUILD.

Faison

TIM JOINED THE BUFFALO NIAGARA PARTNERSHIP -- A KIND OF REGIONAL CHAMBER OF COMMERCE THAT HELPS OUT COMPANIES AND SELF-EMPLOYED FOLKS LIKE HIM WITH THINGS LIKE HEALTH INSURANCE AND MORE. WHAT HEALTH INSURANCE PLAN? BACK TO THAT. THE COMMUNITY BLUE.

UM, I HAVE A LOW ENOUGH DEDUCTIBLE THAT IT'S PRETTY MUCH PERFECT FOR WHAT I'M DOING. HAVE YOU HEARD ABOUT THE HIGHER DEDUCTIBLE HEALTH SAVINGS ACCOUNT PLANS? NO. WHAT THAT DOES IS IT LOWERS YOUR PREMIUM BY THE AMOUNT, GENERALLY, OF THE HIGHER DEDUCTIBLE.

SMALL EMPLOYERS, FREELANCERS, ARE A BIG PART OF OUR MEMBERSHIP, BECAUSE WE OFFER THEM GREAT OPTIONS IN THEIR HEALTH CARE, FOR INSTANCE. WE OFFER THEM GREAT OPPORTUNITIES TO NETWORK WITH OTHER COMPANIES, TO CONNECT WITH JOB OPPORTUNITIES, AND TO LEARN ABOUT DOING BUSINESS. MOST SELF-EMPLOYED PEOPLE CAN USE REGULAR, SOLID FINANCIAL ADVICE. YEAH.

YEAH. TIM IS LUCKY, BECAUSE HE GETS PERSONAL ASSISTANCE... FROM HIS DAD. DONALD BOUCHARD IS A FINANCIAL PLANNER.

WE SAW HOW MUCH YOU'RE SAVING FOR YOUR HEALTH, AND YOUR DENTAL, WE'VE PAID YOUR ESTIMATED TAXES. BUT YOU REALLY SHOULD BE SAVING 10% OF YOUR INCOME FOR RETIREMENT. I'M 19 YEARS OLD -- I HAVEN'T THOUGHT ABOUT RETIREMENT YET. I HAVE THE 401(k) THERE, WHICH IS INVESTED IN VARIOUS STOCKS, AND I ALSO HAVE MY OWN PERSONAL SAVINGS ACCOUNT.

IN TERMS OF RETIREMENT, NOW I'M PUTTING MONEY TO THE SIDE, YOU KNOW, EVERY CHECK. NO MATTER IF IT'S $20 OR $15 -- I'M JUST MAKING SURE I'M PUTTING SOMETHING INTO MY SAVINGS. YOU KNOW WHAT, I HAVEN'T REALLY THOUGHT ABOUT RETIRING. I'M 22 YEARS OLD.

IT'S SOMETHING THAT SHOULD BE ON PEOPLE'S MINDS. YOU WORK FOR SOMEONE -- THEY HAVE A PENSION AND A 401(k) PLAN. BUT WHEN YOU'RE SELF-EMPLOYED, YOU HAVE TO PRODUCE YOUR OWN PENSION. NO ONE'S GIVING IT TO YOU.

HE'S RIGHT. NO ONE IS GIVING IT TO YOU WHEN YOU'RE IN BUSINESS FOR YOURSELF. BUT IF YOU'RE ITCHING TO DO YOUR OWN THING, RESEARCH YOUR OPTIONS CAREFULLY. GIVE IT A TRY.

Tim

FOR ANYONE THAT'S THINKING ABOUT FREELANCING, THE NUMBER-ONE THING IS, WILL YOU BE ABLE TO SUPPORT YOURSELF? IF YOU DON'T HAVE AN IDEA OF WHAT YOUR BUSINESS PLAN IS, YOU HAVE NOTHING TO BUILD ON. YOU NEED THE CORNERSTONE -- FROM THERE, YOU CAN BUILD THE REST OF THE BUSINESS AND HIT THE GROUND RUNNING. WHETHER YOU'RE SELF-EMPLOYED OR YOU'RE WORKING FOR SOMEBODY ELSE, EVERYBODY COULD TAKE A PAGE FROM TIM'S BOOK.

WE ALL NEED TO GET A GOOD HANDLE ON OUR FINANCES BEFORE IT'S TOO LATE. REMEMBER THAT CAR OF MINE I TOLD YOU ABOUT? WELL, I GOT MY MONEY RIGHT JUST IN TIME TO KEEP THE BANK FROM TAKING IT BACK. I KEPT IT FOR YEARS, AND I RAN THAT BAD BOY INTO THE GROUND.

I LEARNED FROM MY MISTAKES, AND YOU CAN, TOO. EVEN BETTER -- GET GOOD ADVICE WHEN YOU'RE STARTING OUT. JUST BE REAL WITH YOURSELF.

LAUGHS

Tim

DON'T THINK THAT YOU HAVE TO, LIKE, LIVE LIKE PEOPLE IN THE VIDEOS OR ON TELEVISION, OR EVEN THE PEOPLE NEXT DOOR TO YOU.

Lwin

YOU KNOW, SOMEONE'S GOT A NEW iPHONE OR A NICE NEW LAPTOP -- WHEN YOU SEE THEM, YOU'RE LIKE, "WELL, WHY CAN'T I HAVE THAT? LIKE, THAT'S REALLY COOL. I WANT THAT." SOMETIMES, YOU KNOW, YOU GOT TO LOOK AT YOUR OWN SITUATION, AND SAY, "WELL, MAYBE, YOU KNOW, IF I SAVE UP A LITTLE BIT, "YOU KNOW, WORK A LITTLE HARDER, THEN I CAN HAVE THAT A LITTLE LATER." YOU SHOULD ASK YOURSELF -- IS THIS A NEED OR IS THIS A WANT? AND THEN WEIGH IT AGAINST YOUR FINANCIAL FUTURE.

Faison

THOSE SUPPOSED NEEDS HAVE LED US DEEPER INTO DEBT THAN ANY GENERATION BEFORE US. IT'S TIME FOR US TAKE CONTROL OF OUR FINANCIAL LIFE AND LIVE WITHIN OUR MEANS.

Simmons

NO MATTER HOW RICH YOU ARE, YOU NEED TO BE ABLE TO AFFORD YOUR LIFESTYLE.

McCormick

DON'T SPEND ANY MONEY THAT YOU DO NOT HAVE. YOU NEVER KNOW WHAT'S GOING TO HAPPEN. YOU COULD GET FIRED FROM YOUR JOB TOMORROW. AND WHAT ARE YOU GOING TO DO?

YOU'RE GOING TO BE IN DEBT. THAT'S WHAT GOING TO HAPPEN.

Lieber

THE LAST THING YOU WANT IS A BIG PILE OF CREDIT CARD DEBT WEIGHING YOU DOWN WHEN YOU'RE JUST STARTING OFF IN LIFE. SO IT'S BEST TO SAVE FOR THINGS BEFORE YOU BUY THEM. BUT I'VE GOT NO PROBLEM WITH BUYING THEM ONCE YOU'VE SAVED.

Faison

MAKING A HABIT OF SAVING IS ONE OF THE MOST IMPORTANT THINGS WE CAN DO -- NOT ONLY FOR THE GOOD TIMES, BUT FOR THE TIMES WHEN WE'RE OUT OF WORK, OR SICK, OR FINALLY READY TO RETIRE. YOU CAN'T JUST SPEND YOUR MONEY AND HOPE, "GEE, AT THE END OF THE MONTH, MAYBE I'LL HAVE SOMETHING LEFT OVER TO SAVE." THE TRUTH IS, SAVING SMALL AMOUNTS EVERY DAY, EVERY WEEK, EVERY MONTH, CAN REALLY ADD UP, AND IT'S VERY EMPOWERING. SAVING IS THE MOST IMPORTANT THING WE DO. IT'S HARD TO SAVE, BECAUSE YOU THINK YOU NEED TO LIVE CHECK TO CHECK.

NUMBER ONE -- STAY AWAY FROM CREDIT CARDS. DEFINITELY LEAVE THE CREDIT CARD AT HOME. YOU HAVE TO DO YOUR NEEDS FIRST, YOUR WANTS SECOND, AND THAT'S THE WAY LIFE GOES. NEVER TRY TO LIVE ABOVE YOUR MEANS.

YOU DON'T HAVE TO HAVE ALL THESE REALLY NICE THINGS TO BE HAPPY. SPEND YOUR MONEY WISELY, I GUESS, WOULD BE THE BEST ADVICE I COULD GIVE.

Singletary

WE'RE GOING TO HAVE TIMES OF PLENTY AND TIMES OF FAMINE, AND YOUR ROLE NOW IS TO SET YOURSELF UP, THAT YOU CAN RIDE, NO MATTER WHAT HAPPENS. YOU GET ON THE RIGHT PATH NOW, I TELL YOU, AT THE END OF THAT ROAD, YOU'LL BE SO PROSPEROUS. WE'VE GIVEN YOU A LOT TO THINK ABOUT, 'CAUSE THERE'S A LOT TO TAKE CARE OF, BUT IT'S REALLY ALL ABOUT TAKING CARE OF YOURSELF. NOBODY ELSE CAN MAKE YOU FINANCIALLY SECURE -- NOT YOUR PARENTS, NOT YOUR BOSS, NOT THE GOVERNMENT.

BOTTOM LINE IS, YOU NEED TO MANAGE YOUR MONEY, OR YOUR MONEY'S GOING TO MANAGE YOU. FOR MORE INFORMATION ON EVERYTHING YOU'VE HEARD ABOUT IN THIS HOUR, CHECK OUT OUR WEBSITE. AND, YES, THERE WILL BE A TEST. IT'S CALLED, "LIFE." AND OTHER PBS PROGRAMS, "YO U VISIT pbs.org.NEY," TO ORDER, VISIT shopPBS.org IS AVAILABLE ON DVD.

OR CALL US AT 1-800-PLAY-PBS. I OWE MONEY -- LOTS OF MONEY.

LAUGHS

Singletary

MOST OF THE TIME, I'M LEARNING FROM MY DAUGHTER. SHE'S MORE FRUGAL THAN ME. SHE'S ONLY 11. JUST 'CAUSE YOU HAVE A CREDIT CARD DOES NOT MEAN YOU HAVE MONEY.

LAUGHS

Singletary

MANAGING MONEY IS NOT WHAT I'M GOOD AT. I'M VERY GOOD AT SPENDING MONEY.

LAUGHS

Singletary

I LIVE LIKE A MONK. I DON'T REALLY INDULGE IN MUCH. IT'S NOT REALLY SEXY TO PUT AWAY MONEY, TO SAVE, AND I THINK THAT IT'S REALLY RESPONSIBLE, THOUGH. I'M TRYING TO BE A LITTLE UNSEXY.

YOU KNOW, I MEAN, I'M NOT A ROCKEFELLER, BUT I DON'T HAVE ANY FINANCIAL PROBLEMS, BECAUSE I DON'T HAVE ANY CREDIT PROBLEMS. SAVE IT. SAVE. SAVE IT.

SAVE. SAVE IT.

Man

1, 2, 3. SAVE IT.

LAUGHTER

Man

HAS BEEN PROVIDED BY "YO A GRANT FROM...NEY"