Finances in a ‘New Normal’ World

I love the phrase that Bill Gross of Pimco, one of the world’s largest money managers, has coined for the world: “the new normal.” It seems as though the whole world was impacted by this past year’s financial crisis – can you think of anyone who wasn’t? And while the stock market has had a “melt up” recovery, I don’t think that any of us consumers will spend the way we used to “back when.” The new normal has brought very different financial times.

As a result, having a financial plan for your family has never been more important. If we look at our homes and apply proven business skills- as Household CEOs – being profitable is just as important as it is in corporate life. There are only two ways to be a profitable entity, reduce your expenses or make more money. If you are like me, and want to be operating in the black with stock rising, we need to have better financial accountability. Gone are the days where we can operate with the faith that all would be fine.

Cash flow Projections - If a cash flow projection works in a company, and we household managers are essentially running small businesses, why wouldn’t we want to have the same kind of planning? It sounds silly, but in the old world, I didn’t do this myself. I simply went about my life trying to spend a reasonable amount of money running my household and family. I tried not to over spend on unnecessary items and trusted that everything would net out in the end. Can you imagine a CEO running a company that way? Neither should we! Write it all down and know how much your household spends. I used to use a software program that made a pie chart of my spending, but when it was such an ugly picture, I literally stopped using it. I believed ignorance was bliss. No anymore. I can’t afford to ignore it anymore – literally and figuratively. I now write down all of our household expenses and know where we are being wasteful. Awareness is the first step. (Mint.com offers great, free, safe software that links to your accounts so you can see your spending almost in real time. It’s eye opening!)

Reduce your Expenses - Where can you cut back? Call your service providers like the cable or phone company and tell them you need the best deal they can offer or you might have to switch to an alternative company. When I called Optimum, I added two phones lines for free and my total bill (internet, TV and Phone went down!)

Contact energy saving companies ([EnergyPlusCompany.com] ) to save money on your energy supplier and get a yearly rebate. Pay your bills online and save paper. If you have credit cards bills with high interest rates and want to eliminate them, many are willing to settle the debt, close the account and typically accept half of your outstanding balance. All you have to do is take the time to call them and ASK for it! It really does make a difference!

Find Free Money - Stay with me here… this sounds crazy but after hearing about this I found almost $3,000! The State of Connecticut (and all states for that matter) has an ‘Unclaimed Property’ department (800-833-7318). All you have to do is call and give your SS# and they can tell you if you have any unclaimed money! I realized that my children had been given some physical shares of Walt Disney Stock when they were born and when we moved, I never called the company to give them our new address. Fifteen years later, since the shares weren’t with a brokerage firm, the company couldn’t send us the dividends, so they sent everything to the State of CT’s unclaimed department. After calling them, I found some other “free money” in old security deposits and insurance checks that had been sent back. In total, almost $3000! You have to send in proof of ownership and ID and then it takes 90 days to receive your check but what a little treat in the mail! Be sure to run all your family’s SSNs, your mother’s, your grandmother’s, whomever. You never know what you’ll find.

Make Money in your Sleep - In addition to “regular” work, there are some legitimate businesses called Affiliate Programs where you make a commission on online purchases. You have to be careful as there are a lot of disreputable companies in this field, but one popular one is called Shop to Earn. I’ve heard good things about it, and have talked to people who are finding it an excellent source of income without actually going to work. If anyone is interested in this, please contact me as I am having an event in February and can refer you to someone on this topic. I can’t say that I have tried these programs personally, but I do know folks who have had success with them.

BOTTOM LINE, pardon the pun, is that being fiscally responsible has never been more important in the world. We all make mistakes, certainly I have too, but being in the solution can be very rewarding. Keeping track of your inflows and outflows (profit and loss accounting) is annoying at times but will highlight the areas of improvement. As I have said many times, progress not perfection is a reasonable goal.

Happy November!

*PS – I’m planning a wonderful event in February called Women & Power. I’ll be gathering a range of resources and experts to help us explore Reinventing Our Careers; Reinventing Ourselves – the theme for 2010! Whether it is the government, healthcare, businesses or a personal issue, the point is we all need to change with the world. More details soon on [devonfleming.com] or sign up for my newsletter and receive information on this event and others hot off the press!

Devon Fleming is considered the area’s Home and Lifestyle Expert. She writes books, articles, blogs, and other online content. She provides ‘Fairfield County Living Tips’ on four local radio stations and appears on area TV providing lifestyle segments and “solutions for the modern woman.” For more information, visit [DevonFleming.com] or email [devonfleming.com] .