Yes, you can tell Word to use a different folder for Normal.dotm, but pointing it (or Excel for Personal.xlsb) to a removable drive is not a smart thing to do, for two reasons:
1. Irrecoverable file corruption is liable to result unless you close both applications and go through the 'safe removal' process every time you want to disconnect the USB drive; and
2. the applications themselves are liable to have startup problems if the designated drive can't be found, in which case they might simply revert to the default locations with a 'vanilla' Normal.dotm for Word and no Personal.xlsb for Excel. In that case, next time you start Word or Excel, it will start up configured for the default location instead of your USB drive.
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Cheers,
Paul Edstein
[Fmr MS MVP - Word]
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