peter barnes had with mr. dudley. tomorrow is release of fed minutes. the plans to continue with its tapering and along with hints how the housing market is doing. liz: it could move the markets. "the willis report" is next. david: good night. gerri: hello, everybody, i'm gerri willis. right now on "the willis report," gm recall scandal grows. millions more cars and some of gm's newest models. consumers win a major privacy battle. sprint hit with the largest ever do not call fine. "willis report cash challenge, a familiar face takes up the challenge. we're watching out for you on "the willis report." gerri: our top story tonight, the housing recovery that wasn't. buyers and sellers are both struggling tonight. so is real estate a real investment? we're looking at state of your housing market with rick sharga,

senior vice president, auction.com, steve moore, heritage foundation and vera gibbons who blogs for zillow. i want to start with you, vera. we have 10 million americans underwater. , they owe more than their house is worth. this is six years after the housing bust. how is this impacting the housing market? >> number is coming down so that's a good thing. zillow expects number of unwater homeowners to drop to 1% in first quarter of 2015. that is problematic. if you're underwater you can't do anything. you're stuck between a rock and a hard place. if you're stuck where you are you can not trade up and buyers can't get in. you can't make a way for those first-time buyers. there also stuck between a rock and a hard place. gerri: rick, i understand folks having hardest problem, people underwater at most the people at bottom of the market. move-up houses where first-time homebuyers would probably make a bid. what is that doing to housing? >> oh, it is tremendous headwind

for housing, gerri. as vera just said, this underwater mortgage problem really affects both buyers and sellers. buyers have nothing to buy because all of this existing home inventory stays off the market. gerri: right. >> and the sellers can't, can't leverage any equity to buy their next house. so really keeps things in stasis for a while. >> i should also point out real quick the buyers, the first-time buyers are more apartment to buy those affordable homes and the affordable homes according to data from zillow are, you know, they're three times more likely to be underwater than more expensive home. so that is problematic. gerri: that is a point i was just making, it is that entry level home that is under the most pressure. steve to you, is housing a good investment? look what's going on. it has been six years. there is no real recovery. a lost young people say they will never buy a home. they're happy to own the cell phone. they will use a uber app on cell

phone and don't want to own anything. are they right? steve? >> sorry. i wasn't sure you were talking to me. look i am so disturbed by this is sorry, gerri, it almost made me fall off my chair. think about where we are in the situation with percentage of people underwater. in some markets nearly 20%. ask yourself this question. how does this happen? how do people get underwater where the price of their mortgage is more than they have put into the house and the answer to that question is, we repeated all of the same mistakes, gerri, we made in 2005, six and seven that led up to the original crisis. gerri: what do you mean? >> so 90% of the mortgages that are being issued now are still being issued with essentially 100% taxpayer guaranties through what institution? fannie mae, freddie mac and fha. fannie and freddie went bankrupt five or six years ago because of these 100% guaranties. the other things we have not

fixed, if you ask me what one thing we could do to fix this housing market, go back to 10, 15, 20% down payment requirements on affordable housing. gerri: are you saying we're heading for another bubble. >> we could be. what happens, gerri, if interest rates start to rise? if we see interest rate shock people will being really underwater especially if we don't see increasing appreciation of housing values. we've got to get back to common sense principle, first of all not 100% federal taxpayer guaranties and number two, get back to normal, you know, requirements for down payments. a lot of these houses that you're talking about and homes, that are underwater, they're three to 4% down payments. if the value of your house falls by 5% you're better walking away from the mortgage. gerri: here's what we know right now. 10 million owners with 20% or less equity. rick, to you, if you don't have much equity, you can't buy a new house because you can't pay the costs of closing. you can't pay somebody to market and sell your house.

rick, what do you say? >> well, i want to go back to something steve just said and make sure viewers don't jump out of the windows of their high-rises. >> good. i like that advice because i'm ready to jump out of a window. >> most of the properties that are seriously upside down are on loans that were issued in '06, 07, '08. we're not seeing, we're still seeing 100% guaranteed to steve's point, we're not seeing 100% financing, we're not seeing 125% financing. we're not doing ninja loans and people don't have jobs and they're not getting mortgages. this is still fallout from the really bad practices that happened in the first part of the 2000s. >> could i make one quick point though? gerri: sure. >> we have to get vera in. >> they're still doing lowdown payment homes on fha loans. >> yep. >> that is ripe for default. >> only thing would i like to add, only thing keeping market somewhat stable.

we had institutional market coming in. they bought up foreclosures and foreign buyers are doing all cash transactions. gerri: that brings up a bigger question. vera i will ask you to weigh on this because the boys are doing at love talking. what saves us inventories are in the toilet. prices are sky-high. thanks to the professional investors who came in and left as soon as prices went up a little bit. rising interest rates. no jobs. the jobs market is terrible. what saves the market. >> right now cash buyers are coming in, placing like new york city, california markets they're jumping in because they have the cash wherewithal to do so. the first-time buyer is shut out of this recovery all together. it is other buyers, luxury buyers, look at sales of homes million dollars plus, those are on the rise, people with money, jobs, inclination, they have the portfolios. they're not game. gerri: steve, nice to have

foreign investors but i don't think foreign investors are buying in indianapolis or kentucky or home haw or illinois -- omaha or illinois necessarily. there is a whole part of the country that these foreign investors don't play in. >> foreign investment is really important factor that drives real estate prices. no question about that. gerri: in some parts of the market. >> even in someplaces you wouldn't expect foreigners to be investing in. if they see a bargain they bill go for it. we've been arguing last five years we need a housing recovery to get the economy going. maybe we have causality reversed. we need economic recovery for people to have jobs to they can buy houses. >> you make a good point. rick, you look at these numbers, seems no way out of the box. i'm a huge fan of real estate but now lot of people say it isn't a good investment, you shouldn't buy a home. what do you say, rick? >> i always believed one of the big mistakes we looked early on people looked as a house to park

their money as opposed to a place to park their car. look at better bet than maybe renting over the long term, it is probably better investment than that. is it better than buying apple's stock 20 years ago, probably not. gerri: if you could pick apple's stock, my friend. not everybody can pick apple's stock. what about a home as a place thaw park your money over time, regularly? it's a store of value? it is a store of money for some americans? even federal reserve says it is not a 401(k), not a pension, not money left from the grandmother, it is their house. is that likely to be true in another 20 years, steve? >> yeah. i think it will be. look i'm bullish on u.s. economy over the long term. so yeah, investing in u.s. real estate i think is still a pretty good investment. there are someplaces like san francisco where price have gone through the roof. but there are a lot of places where there are still a lot of bargains in he will reese it

state. if we get the economy growing at 3, 4, 5% you will see a much bigger many boom in real estates than we've seen long time. >> i'm with steve. if you hang in there long term. we recouped 1.9 trillion in lost value. people's expectations got out of control. if you're thinking long term and getting into the housing market. gerri: look, prices gone up but they're not back to 2006 levels, right? interest rates are higher but you call this high? i don't call this high. if you look at the long-term, rick, isn't it a good deal right now for people to think about it? even, know i think a lot of people can't afford the down payment but isn't it worth considering? >> is froms still haven't come all the way back. interest rates are near historical lows. and the long term perspective i think everybody said so far is, is good. so, if you can get a house, if you can get the financing, now is the real good time to be looking. >> one quick point about this.

gerri: steve, go ahead. >> a little point in my book. gerri: you are shameless. >> wealth of states. what that book is telling us all of the migration of capital and jobs and people is going to these southern states with low taxes. so look, if you want to go to texas or tennessee or florida or place like that that is a place to invest in real estate. gerri: because you're looking long term and potential power of those economies in the south. i vote with you on that. rick, steve, vera, thanks for coming on. great job all. >> thank you. >> thank you. >> thank you. gerri: still a lot more to come this hour, including your voice. during the show we want to you tweet me @gerriwillisfbn. we want you to think what is going on in the show. are we answering your questions? do you have something you want to say? send me an email @gerriwillis.com. at the bottom of the hour i will read your tweets and emails. coming up, gm issuing another recall, no kidding and these cars were just kind, just put out. the details coming up.

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2.6 more strikes or 15.4 million recalled so far this year and it is only may. even more troubling the recalls include brand spanking new redesigned 2015 cadillac escalades. joining me from detroit auto analyst michelle krebbs. thanks for being on the show. >> glad to be here. gerri: i looked at this, i thought all additional recalls coming from gm, it was a cya move, cover your rear end because they are trying to make sure they don't get into more trouble with consumers and regulators but some of these announced today are pretty darn serious. there are fire issues, airbag issues. what do you make of today's recall? is this serious stuff? >> well, some of them are. it is all over the map and i think, you know, the covering your butt is a big part of it. general motors got in big trouble for waiting too long to recall the ones with ignition switch flaws. gerri: right. >> so they, i think they're

looking at every product they have, brand new, old, and do we have any issues and let's get them all cleared up because as you know they're being watched by the feds. gerri: absolutely. >> nhtsa said we've got our eye on you so they're cleaning all that up. gerri: not only do they have the eye on the company but they also levy ad huge fine. >> absolutely. there is a department of justice investigation. so this is ongoing. they will have to keep their nose clean for a while. quite a long time. gerri: is it a question of keeping your nose clean or, just fixing, you know, just trying to do a better job or do they really redo, rethink, build back up from the ground? when you have 15.4 million recalls in the space of six months, doesn't it mean that you need to do something more fundamental? do more heads need to roll? they have already redone some safety systems but should more be done? >> well, they are doing more. you know, they put in a safety

officer. i think they're paying a lot more attention as things get out in the market. as you pointed out earlier the cadillac escalade, brand new to the market, only a couple of hundred of them out there and they're already recalling them. so clearly they are seeing something internally that has them on alert and they're taking action right away on those. gerri: i was just going to ask you about that the cadillac escalade. brand spanking new design of this car. the problem is the passenger airbag won't deploy. now that is very, very concerning. >> may not deploy. we don't know yet. gerri: this is very concerning to me because this is a brand new car. i would think they triple, quadruple check these things before they go out, the brand spanking new ones but i understand there might be a problem in the airbag industry that goes beyond just gm or even this escalade. >> if you look at recalls a lot of them have to do with airbags. what we're seeing is, the auto

industry is trying to achieve economies of scale. so there's, there are a few airbag suppliers. they supply all of the automakers. so you're seeing these giant recalls when one thing goes wrong on one car you see that across the board because they're the same makers. they're also using the same architectures on, you know, for example, the cadillac escalade is built on the pickup truck frame. so they're using vehicles in a more widespread way to get economies of scale. so when one little thing goes wrong, a lot of things go wrong. gerri: clearly. you got that right. michelle, thank you for your time. >> thank you. gerri: and still to come, cash is king. we have a new participant for our cash challenge. she is going to share how she is going credit card-free and the summer unofficially kicks off this weekend. how can you enjoy the sunshine without the bugs? next, how do you do that? how to bug-proof your summer. listen to that. yuck.

gerri: put down the fly swatter and drop the smelly chemicals. we have better way to debug your backyard this summer. we'll be right back. true business-grade internet comes

with secure wifi for your business. it also comes with public wifi for your customers. not so with internet from the phone company. i would email the phone company to inquire as to why they have shortchanged these customers. but that would require wifi. switch to comcast business internet and get two wifi networks included. comcast business built for business. [buzzing sound] gerri: i can hear that. that is pretty cool. play it again. [laughter] the bugs are back. mosquitoes, ticks, fleas, all of them they're at my house. with memorial day weekend right around the corner you're probably looking for effective way to debug your yard so you can have a nice barbecue and not get bitten to pieces. how do you do that?

joining me that, theresa, i'm sorry, i apologize, tricia calvo. "consumer reports" food and health editor. thanks for coming in. here is my big worry. we have big barbecue where somebody is bitten by a mosquito and picks up a disease, what are we at risk for in our own backyard. >> you're at risk for number of different diseases not just irritation and pain of a bug bite but you're at risk for lyme disease, den gay fever perhaps. gerri: what is that. >> den gay fever is a condition popular in other countries but it has been spotted here in the united states. gerri: what happens to you if you get it? >> you get very high fever and a lost joint pain. gerri: that sound pleasant. >> there is also west nile and some other, more common things. lyme disease. gerri: anything can happen in your backyard, that is what i'm here to say. you say you doesn't have to does

yourself with head dust bug spray. >> you don't want to do that, does your seven with bug spray. take some simple and safe effective measures. gerri: what are they? >> that means discouraging the briding of mosquitoes. you want to eliminate any standing water from your backyard. if your kids appeals are full of -- pails are full of water or turned over garbage can covers. keep the lawn mode because it discourages insects, particularly ticks. if you can stay out, don't go out in the backyard from at dusk or at dawn because that's when the bugs are most active. gerri: that is my favorite time at dusk. good to know though. you have got some great ideas for keeping mosquitoes at bay. one i know a fan will help you stay clear. what else. >> put a fan on the deck it really does help. if you also can keep the led lights, not the mosquito bug s&pars but led lights help keep mosquitoes away.

don't wear perfume or after share, something that attracts them. be smelly. >> mentioned stop mosquito breeding. that's a great idea. >> yes. gerri: ticks this is disturbing, ticks are disturbing because you can get sick. wear light-colored clothes. do they care what color chose. >> they don't care. you can spot them if crawling around on you and get rid of them before they bite. >> what else can i do to get rid of ticks? >> when in your backyard or hiking tuck pants into your socks. long sleeves buttoned up so the ticks don't crawl uphes and bit. when you come home, do a tick check. check your hair, back all over to make sure you're tick-free. gerri: talk about bug chemicals and space you might not want to use. >> right. gerri: there is don't do list here. >> yes. deet, which is the common ingredient in most bug space, there are health concerns about it. it can be problematic. but there is a product called lemon eucalyptus oil that is a

little safer. consumer reports tests we found it can be just as effective as deet. if you feel like you need to use deet, use something 30% less deet concentration. gerri: okay. we have sound wave devices, backyard bug s&pars. those are fun. you hear all of them die. >> but they really don't work. you think they're dying. there is no correlation between dead mosquitoes in your bug s&per and reduction of mosquito population in your backyard. gerri: why? because there are some of them? >> there are some of them and there is no strong evidence that they actually help. gerri: great stuff. thanks for coming on. appreciate your time today. now i will feel safer over the memorial day barbecue. >> thank you. gerri: later in the show, sprint gets hit largest with the largest ever do not call fine but will it stop annoying calls at dinner? price shock at the pharmacy. the latest unintended consequence to obamacare. details coming up.

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♪ ♪ gerri: obamacare was supposed to save money for everybody and end the health care cost curve, but if you have filled a prescription lately, you might be wondering. doug holtz-eakin joins me now from washington. so, doug, interesting today, the biggest organization trade group representing the pharmaceutical industry saying, hey, guys, guess what? here's a warning? drug prices are going to go up as much as twice as much out-of-pocket costs for consumers. are you surprised? >> i'm not at all surprised. i think there are two big stories going on here. the first is simply that the whole idea behind obamacare was let's write checks, cover a lot of people and have them go see doctors. doctors write prescriptions, people buy more drugs, and it was inevitable that we're going to see drugs and other parts of the medical services go up in price as a result of this. but the second piece is the out-of-pocket piece.

and quietly, a lot of people, i don't think, understood there were two different deductibles on these policies; one for their typical medical services and the second one for their prescription drugs. so seeing the costs come right out of their pocketbook, not out of the insurance policy. gerri: and that's double jeopardy for people out there. >> yeah. gerri: you know, thought they were going to catch a break here, maybe get some coverage, and now everybody's seeing their costs go up. i think even if you have coverage not even from from obamacare, from your employer, you're seeing your prices go up. i also want to talk about this company called circo that it's supposed to -- and you smile. it's an obamacare contractor. [laughter] they're supposed to be like the final step in the process of getting coverage. they're doing nothing, these people. this isn't, you know, we didn't even hire a u.s. company for this business, we went overseas to give somebody billions and billions of dollars, and now the workers say they're playing trivial pursuit, hangman and wheel of fortune. i'm shocked, but how -- is

nobody watching? is that what's going on? i mean, this story is amazing to me. >> it's the most depressing story. i mean, it is, in fact, the case that the government does have some performance contracts and contractors do great work on those contracts. everything has gone wrong in this. i don't understand the contracting, i don't understand the oversight, i don't understand the fact that taxpayer dollars are going here, and there's an obligation to use them wisely, and to make a reasonable effort. so this has just been appalling for me to see. you know, it's easy to say, oh, the government can't do anything right, but this is bad by the standards of government contracting. someone really ought to figure out why it happened. gerri: well, so in this story that i'm reading, one former employee who chose to remain anonymous discloses she was paid $15 an hour to process one, sometimes two applications. so, yes, they hired a non-american company to do this,

and two, there was no work for these people because, guess what? nobody could figure out obamacare's web site, and it wasn't working. >> right. i mean, if you are the person who's responsible for maintaining and servicing the back end of something that isn't built yet, you're not going to have much to do. and so, you know, it feeds on itself. and i think we're seeing just again and again and again the sort of arrogance and hubris that went into building this health care dot golf has really back -- healthcare.gov has really backfired. gerri: you know, all the bad stuff is coming out now as we start to get all this information slowly leaking out about how things actually did work, and now judicial watch out with a long document detailing exactly how this worked in the early days. and according to that 106-page document, and they got this right from the department of health and human services, on the first full day of operation they received only one enrollment.

all of that hubbub, all the excitement -- >> it was only a billion dollars, what did you expect? [laughter] gerri: oh! but, so, i know, i can't even form late the question -- [laughter] it's just so outrageous that here we are, billions spent, billions more to be spent because, let's face it, this is going to be an incredibly expensive piece of legislation that is only going to hurt the industry and, i believe, hurt the health care of americans. and you can't even process a single, a single application. >> i think there's so many things wrong with this story. i mean, and the one that stands out to me, the one i find most troubling above everything else is people knew this wasn't working, and somehow the information did not get to the president of the united states. that's, that says there's a problem, right? gerri: right. >> the ceo needs to know when there's a problem. the ceo needs to be ready for it, and if he hasn't got systems in place where he gets the information he needs, that's bad for this country. the second thing that really

bothers me about this is there is this presumption that somehow we can build this magic machine to solve this difficult problem. it's never going to work, gerri. this is a really hard problem. think about it, let's take 317 million americans, figure out who's eligible for a subsidy, calculate the correct amount of the subsidy, deliver it to the insurance company of their choice, the policy of their choosing in the state of their current residence in advance every month. that's incredibly hard. and then people's income change, they marry, they divorce can, they move, they get new jobs, they have children, the numbers change every time that happens. you're not going to get some magic calculator. they should have thought of a system that was more manageable, because that's just not going to happen. gerri: well, you know, i think this would be a tough solution for people who were experts at building web sites, right? >> yes. gerri: but these people were not expert at building web sites. and this is what you get, my friends, total mess. [laughter] >> well, i mean, they should build a web site to serve a

function. what exactly is it. they tried to build a web site to serve multiple functions. is this comparison shopping? is this an enrollment process? is this a payment system? gerri: good point. >> it's trying to do too much, and in the end it's not going everything. -- it's not doing everything. gerri: i agree. and now it's time to have your voice heard. our poll question tonight, should the do-not-call list, should it be modernized? later in this show we will hear a consumer advocate's take. steve tweets in: no, solicitors will still figure out a way to bypass the list. dennis posted this: we need a system where violaters are fined $100 and every single dollar should go towards paying off the national debt. we could have it paid off by next year. pretty good idea. and todd says this: yes. it should be every few years or so. here are some of your e-mails. martin writes in: i don't want

to be bothered with promotion calls. most are made at dipper time when you just -- dinner time when you just get home from work. and steve writes in about gm: gm should be part of the government bureaucracy. we bailed them out, and they stiffed the taxpayer for $11.5 billion. so they can continue to pass out bonuses and extravagant salaries and not a smidgen of accountability. sounds like a government agency, he says. to me, they owe every taxpayer a car. i don't think that's going to happen. and denny from georgia writes in about our cash challenge: i do not carry cash. if i carry cash, i spend it, but i do pay for everything with my debit card. danny, thanks. send me an e-mail, go to gerri willis.com. next, cash is king, and we have a new apartment tonight in our cash challenge -- participant in our cash challenge. look at her. and here's your consumer gauge with the numbers that matter to you. we'll be right back.

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does breathing with copd weigh you down? don't wait to ask your doctor about spiriva. ♪ ♪ gerri: "the willis report" cash challenge has taken our participants through some hurdles they didn't expect to go through when deciding to dump the plastic and go cash only. here is an update from our colorado couple, kately and steven. listen to this. >> i just wanted to share with you another great use that i found for cash. and that is for fresh flowers that i buy for my friend. and i don't think she will take checks or credit cards. >> the rental car place, i found out that using a debit card, they want to place a pretty sizable hold on our checking account, so instead of going that route, i decided to use the credit card to hold it until i return the car on sunday, and then i'll pay it all off with

the debit card. >> i totally overwithdrew on our checking account. none of us are perfect. gerri: totally overdrew, it is just not that easy ditching your credit cards. but let's check in with our other favorite couple, delane and dan seal. this is not so easy. i mean, we called it "cash challenge" for a reason. delane, what's been going on this week, and give me a sense of whether you've encountered some challenges too. >> i think one of the challenges is my patient. [laughter] i took $150 to costco thinking i'll just pay, and you pay the cashier, it's quick and easy and fast, but when i went to put the cash on the cash card, it took four different scannings and then i was sent over to customer service, and about 15 minutes later, i finally had my cash on my cash card.

gerri: that's annoying. wow. you know, it's amazing to me how many institutions are just not prepared to deal with people who want to do what you're doing. did you run into any trouble? >> well, we visited a national park this past weekend, and they had a sign right out front that said credit card is preferred method of payment. but they did, they did take cash, and with the road trip brought a little bit of challenge with making sure we could get back on the amount of gas we had in our car before we ran out of cash. gerri: wow. that's -- so there's yet another story about your daughter and online courses. which of you has that story? >> well, i do. my daughter's going to take a summer school class in geometry. as i was looking at the price of it, and before with i went to check out, they're going to ask. so i kind of paused and waited, i'll have to get another cash card, one of those visa payment cards, so it seemed to work the last time i needed to do it, so

hopefully it'll work again. gerri: it's just a little bit tricky even if you're dedicated to it, as i know you guys are. one of the issues for you is keeping the impulse buying under control. do you feel like you're doing a better job at that now? >> i think so. i must admit, i was surprised. even though i was just getting a few groceries, i splurged and bought strawberries, croix santas and chicken salad. i thought, that was not on the list, i really blew it. but we made those sandwiches, and we had a three-hour drive, so that worked out great. gerri: you have a new challenge the two of you are going to take. what's that? >> we were joking about last week's question about who keeps more money in their wallet, and i can probably predict it's always dan because he never spends anything, and i think the money just flows through my hands like water. i think it -- i don't think i can keep it in there longer than 24 hours. there's always something to buy. so this weekend we're going to

go away to estes park and visit another national park in colorado, and i think we're all going to start out with the same amount of money, $30 each, and see who can keep it the longest. gerri: i love that. that's awesome. that's terrific. go ahead -- finish your thought, delane. >> i just was going to say i think it'll be great even for our kids, because they're very conscientious about making sure they have gas, and with a 17-year-old who's always putting money in her car for her new, you know, for gas, i think it'll be great for all of them to see how it goes. our son's a spender like me, so he likes his smoothies and ice cream cones, so we'll see who wins. gerri: dan, last word. >> yeah. i think that the challenge has been going great. i think the biggest challenge for most people would be you do have to plan ahead, and you have to forgo that instant gratification of buying things right when you want them. gerri: well, i want to know what happens on the trip. you guys have to come back and tell me. [laughter] thank so much.

>> thank you. gerri: and now we have a brand new, spanking participant who's actually part of the fox family. she's the morning anchor for ka kasaz, and she is not new at this. >> i'm andrea, this is my husband chris, and we adopted our own cash challenge about three years ago. the only way to get rid of debt and pay it down would be to budget and pay cash for everything, that's what we've done. gerri: wow. are you guys not the most attractive couple ever? joining me now, andrea robinson. do you have kids? they must be beautiful. >> well, you are too kind. you're good for a girl's self-esteem, i tell ya, gerri. we do have two kids, an 18 month old daughter and a little boy, his name's carter, he's 4, and they are the greatest joys of my life. gerri: but they're kids. >> they are kids. gerri: and that can be tough on

your wallet. as a mom, how do you make this work? >> so i make it work, and somehow, some way every month it's been working for now almost three and a half years. and when we started this, we were sick of debt. we were sick of having car payments, student loans, credit card debt. and my husband came to me one day and said, hey, let's get out of debt. and i said, hey, you're crazy. and he said the word, the b word, which is budget in our house. [laughter] and i said, a budget? what are you going to put me on an allowance? and, yeah, we -- i resisted a little bit, but we did it. we adopted a lot of dave ramsey's principles, we're really big students of his. and from that day forward, we sat -- about a week after that when i finally digested, we sat down at the kitchen table and cut up every credit card we had. we had a debit card, but we cut up the credit cards. if you've used them as a way of life, that's scary. that's a crutch in your life. and it was probably one of the best decisions we've ever made as a couple.

and now as parents, because our hope is our future is brighter, of course, and that our children learn how to manage money better than we did. and eventually just think, you know, it's a way of life that our envelopes, here they are right here, are just normal. mom goes to the grocery store and whips out some cash and pays for our groceries every week, and that's just what we as a family do. gerri: that's great. you know, i find this so interesting, and dave ramsey is terrific. do you have any idea how much debt you've actually paid off? >> yeah. we've paid off quite a bit. we were gazelle intents when we started this. we did everything we could. my husband worked a lot of overtime, we cut down our lifestyle dramatically, drastically, and every dollar went towards debt. and in a short amount of time, under a year, we paid off about $80-ish thousand. gerri: wow. >> yeah. but, again, we were gazelle

intelligent, we put the pedal to the metal and never stopped. and right now we're at a place where all of our big debt is gone. we don't do car payments, we never will finance a car ever again. we do use the debit card for purchases online and gas, hauling two kids out of the car every time you get gas here in phoenix when it's 110, it's not the most enjoyable experience. so things like that we use the debit card for. but cash for virtually everything. this is my envelope system that i carry around, my husband and i share it, and everything from vehicle expenses to house expenses to department store spending, birthday gifts, it all comes out of that. we budget every single month. we sit down, we hold a budget meeting together, and we decide where your men's -- our money's going to go. that is what makes paying with cash so much easier. because it can be difficult. gerri: so i'm curious about, because it sounds like you've

been practicing this for three years now, it's really a way of life. >> yes. gerri: how confident do you feel in your gut about your future, the future for your kids and yourself, your retirement? do you feel like, hey, we are okay, we're squared away? >> 100%. i feel we are as good as we'll ever be. it is only going to go up from here. we have a plan, and you know if you don't make plan, if you don't make the choice today to do something for your life, for your future -- not anyone else, but for yourself -- you're not going to have anything by the time it comes time to do those things you always wanted to do, to have experiences in life or to maybe help your kids go to college or one day have the freedom of not having a mortgage. i mean, that's an exciting dream to have, and we want to make it a reality. and for us this is what works. we're not saying it's for everybody, but for us there's something freeing about being able to throw cash down on the table and pay for a meal and leave there knowing in a month

you're not going to get a credit card bill, and you're not going to look at it and say we spent $80 on that? or there's $5,000 that just we had no feeling -- gerri: that'll never happen again. andrea, great story. i'm so impressed. and to do it with a couple little kids and you're working and he's working, it's a lot to manage. impressive story. >> thank you so much for having me on. it's a pleasure to be with you, and we really appreciate it. gerri: thanks so much. well, still to come, my two cents more. and next, a win for consumers. sprint gets smacked with the largest-ever do had-not-call fi. does this mean everybody will get through their dinner without those pesky robocalls? stay with us. i rebalanced my portfolio on my phone. you know what else i can do on my phone? place trades, get free real time quotes and teleport myself to aruba. i wish.

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gerri: ranges paid the largest fine ever for violating the no call list. they failed to honor consumer request to stop calling. but will it mean all of those calls day and night will stop? dear, thank you for being back on the show. so this is a favorite cause of consumer unions. tell me what you guys have done on this. >> absolutely. we have been in close contact with consumers and they have said that they are taking these unsolicited calls, especially the robotic calls that use an auto dial phone call. and so this is an issue that is

not only important to us but also important to the american people. gerri: why does this happen over and over again with the very same company? >> that's a good question. so in this cas-- i: let mphrase tha. this is a huge topic and there are bad guys thatre robo calling another's companies like sprint andhey can't track million list.ommission's it allyhat ifcult?

in this case was ordered to pay $7.5 million. gerri: as the fcc doing a good job enrcing this? and how much money they've gone out of companies, how are they doing enough? >> the fcc has recently strengthened its rules on the which is a great first step in very important. the problem is that as technology develops, they are finding new ways to get around the do not call list. and the challenge is to develop the technology.

gerri: the government is far behind. thank you for coming on. okay, we will be right back is i. is i. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

hi, are we still on for tomorrow? tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow.

gerri: we are flattered time. thank you for joining us and have a great night. neil cavuto is not. ♪ ♪ neil: i am going to get personal with you. do you own a home? chances are for one in five of you, you are underwater on that home. that means that one in five of you owe more than what it is presently worth in that and that is not a good position to be in. on top of the 10 million americans were upside down on their homes, millions more donate another 20% extra cushion they need to try to sell that home with a closing costs and the down pay