TODAY | October 14, 2013
>>> back now at 7:41, richard engle was here earlier saying this is a huge national security issue for the u.s. around the world because the deadline to pay the country's bills is now just three days away . no deals in sight. so a lot were left wondering what a possible default would mean for their savings and sharon specializes in finance and jean chatzky. is there a way to insulate myself for what could be coming down the pike? what's the answer?
>> this is not a time to rush and sell investments but it's a time to make sure you build up enough cash on hand. this could be a big one.
>> we're hearing about a lot of financial firms spending money in preparation for a potential default but when you think about your stock portfolio, what's the best advice right now?
>> think long-term. we all know the market is going to be in for a rough ride today, maybe over the next couple of days. if you have money in stocks you need in the next five years it doesn't belong there. it never belonged there. but if you're thinking long-term you have time to ride this out.
>> which is sad but also maybe encouraging because we went through this two years ago with washington. we continue to ask about the impact of the default. the big issue is the bond market . it has to do with rising interest rates because it's about paying bills.
>> well, the rising cost that you're going to have for the u.s., it's going to impact everything that you are going to be borrowing as well and that includes credit cards . you could see a significant impact on your credit card rate and if you're already paying 15%, that's the average, you'll see the rate start to go up. that's going to hit your monthly bill. it's always the time but now is the time to pay down the credit card debt .
>> it has to do with the confidence people have in treasuries. the mortgage rates are going to go up and the car loans are going to go up. you want to pay down as much of the short-term debt as you possibly can.
>> we talk about home mortgages being so important. as we come over here, unemployment is still so high and i talked to christine, head of the imf over the weekend on "meet the press." major bankers talking about this could usher in a recession like that.
>> and what does that do? that paralyzes companies and caused them to not want to hire. we could see an impact on job growth . if you're important enough to have a job right now you need to focus on that job and make sure you stay marketable and employable and realize it may take longer to find a job.
>> absolutely. makes the short-term savings really important because if this actually does happen, we could start to feel the effects in social security payments, in tax refunds very quickly. those things will be delayed.
>>> all right, jean, sharon, thank you very much. we'll watch