As of this writing (it’s early October), the nation’s economic stimulus package seems to have helped revive the stock market. The S&P 500 Index* is up 17.19 percent year-to-date.** Yet according to the U.S. Bureau of Labor and Statistics, unemployment figures are hovering around 9.8 percent as of the end of September.

 

Those figures do not include people who have become frustrated and have simply stopped looking for work. Nor does it include folks who took part-time employment when they really want a full time job. The bottom line is that times remain really rough for many Americans.

While empathy is in order, it is also important to keep focused on your particular situation. After all, while bonuses and overtime are down, 90 percent of us still have jobs. And, while many are struggling to make mortgage payments, most payments are still being made – on time and in full. The government is trying to help, but while waiting for a government to save you, you could financially drown. With this in mind, let’s go to the question of the month:

 

“Dear Dan and John: For many years we have been a single-income family. But, due to the recession, all of my overtime pay has been eliminated and, as a result, our family income is down. My wife has found a low-paying job at a local independent dress shop, but it’s still really tough to make ends meet. Do you have any suggestions as to how to make ends meet?”

Signed, Stressed and Strained

 

Dear Stressed: You and your wife have a great practical attitude. When your pay went down, your wife pitched in by going to work. After doing all you can do to earn more money, you are now looking to reduce expenses. It’s a pleasure to help folks who are trying to help themselves. Here are a few tips we have found, during our 29 years in practice that have really helped:

 

Reduce cable TV

 

If it’s too high, drop down to the minimum package. If it’s still too high, drop cable entirely. Yes, I know for some folks that thought can induce a panic attack, but trust me when we say that you can live without it.

Review policies

An often overlooked savings avenue is your auto and home insurance. We suggest you look at your car and homeowner’s insurance bill. Dan recently had his agent review these items and the agent changed his homeowner’s insurance to save over $250 a year.

 

Review expenses

 

Review your phone bill and all other monthly expenses until every item of any consequence has been evaluated. The savings could be enormous.

If these changes aren’t enough, then it’s time to take a look at the big items. For instance, what car do you drive? Dan once knew a client who refused to give up his new GMC Denali and his wife’s BMW, even though they were literally headed for bankruptcy. Remember, love of stuff leads many to shame! If you have cars you can’t afford, sell them. We often tell clients that, ideally, you should only buy a car you can afford to buy with cash.

Finally, if all else fails, a few people have found it necessary to sell their homes and downsize. While there’s no shame in this, it should be a last resort because of the upheaval involved. If you make as many changes as needed to right your own personal ship, then what the government does to help will simply be icing on the cake.

 

Dan Searles and John Stohlman, owners of Medallion Financial Group, are CFP®’s, financial planners and Registered Representatives with over 25 years of experience in the financial services industry, offering securities and advisory services through National Planning Corporation (NPC), member FINRA/SIPC, a Registered Investment Adviser.

 

Medallion Financial Group and NPC are separate and unrelated companies. They manage over $250 million of client assets. For further info, questions or comments regarding this article, Dan and John can be reached at 301-990-9704 or 1-800-878-9704 or Dan.Searles@natplan.com.