Trying to rebuild personal finances

After watching the worst financial fiasco since the 1930s unravel throughout last year, we must treat 2009 as a year of rebuilding.

If only, really, we could rebuild all this mess in a year, right? We’ve all got a long, uncertain road ahead of us when it comes to working our way through the recession, rebuilding our retirement plans, re-creating lost wealth, and, frankly, redefining the way we handle money.

Still, you’ve got to start the cleanup sometime — and 2009 is as good a time as any. Here are some suggestions:

Get your r sum — and yourself — in shape in case of a job loss. Work the network. Go back to friends and former co-workers to help them open doors for you. Some send e-mails endorsing you to potential employers.

Do what you can to control spending. Even an extra $25 a week saved now could offer some relief in the future if you lose your job. Go to the library. Make do with what you’ve got at home in the freezer. Shop your closet.

Create a lifestyle built around saving, not spending.

Even as things start looking better — or OK, maybe just stop looking worse — many families won’t be able to effortlessly make quick money in their 401(k) plans or their homes anymore. Saving for retirement or college will require saving money — not spending it.

“Painful as it is, you’re not going to get bailed out by your home appreciating,” said Mitch Stapley, chief fixed income officer for Fifth Third Asset Management in Grand Rapids, Mich.

Stop charging on your credit card. Pay the bill in full each month or pay cash only.

Know how much money you have in that 401(k) after it was sliced and diced by the ’08 Vegematic sold on Wall Street.

If buried in debt, work with a nonprofit counselor, such as Green Path Debt Solutions, at www.greenpath.com.

Homeowners who are running into trouble should contact their lenders, as well as seek free mortgage counseling through the Hope Now Alliance at (888) 995-4673.

Don’t do anything stupid. Don’t spend like there’s no tomorrow because you’ve got some money now. Don’t dump all your 401(k) money into GM stock or Ford stock. Don’t engage in risky personal — and later way-too-costly — behaviors. No one needs another speeding ticket.

Focus on your financial footprint — not overall gloom and doom. Remind yourself of what you may have done right — say if you have little or no debt, you have savings and still to have equity in your home.

Talk to your loved ones and friends about where you need to spend money and where you don’t. Get out of any spending ruts — you don’t have to buy the same things that you did last year.

Realize that you’re not the Car Czar. You can do your best on the job, but you cannot save your company. Many factors will determine how the automakers, suppliers, retailers and others shake out a year from now — and most of those game plans are well above your pay grade.

Leave room for the possibility that ’09 could look better than ’08. Though many people, rightfully so, feel grim, some market experts say that the stock market could post a double-digit rebound in ’09.

XSusan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at stomporfreepress.com.