Times are tough and for some inexplicable reason, they only seem to get tougher. One option, from far left field that seems completely infeasible and enticing at the same time, is to start a dream fund – - a savings fund that will provide the down payment to start your dream whether it be a business, a career change, tuition to go back to school, or whatever your heart desires but can’t afford right now. Why? These days, saving money is almost impossible as most of us are swamped in debt up to our necks or higher. The consequence of this is that right now we are doing no more than treading water providing ourselves no foundation on which to build something for ourselves in the future. In the end, even when the economy picks up and we return to gainful employment, we have effectively lost several months, if not years, of our lives during which we have either stayed stagnant in life’s progression or gone backwards a few steps. So why not continue moving forward or at least prepare for a move in the future?
The next question is how. This is the tough part. Personally, I’m stuck in about two hundred thousand dollars worth of debt with no way to pay it off. However, somehow I’m still surviving. But, I’m not surviving at my optimal cost. So, I have to trim. For instance, I don’t have cable television, but I know many of you do. Cut it out. Who needs cable television when digital broadcast is free? Trust me, millions of Americans survive without cable and so can you. There’s plenty to watch on broadcast and when there’s not, you have free time to be productive elsewhere. The same goes for that dvr that only costs five extra dollars a month. It all adds up.
As for Internet, slow it down. Many people don’t know this, but when you purchase Internet or even bundled Internet with other services, the service providers as a rule do not offer you the slowest (and cheapest) high-speed Internet available. In fact, most people have Internet that is fast enough for small, high-traffic Internet-based businesses (usually around 6Mbps, but sometimes up to 12 Mbps) – - which is a complete waste for general home use which includes web-surfing, YouTubing, Facebooking, Gchating, Skyping, emailing, and most other things that most people use the Internet for. 1Mbps is sufficient for all of this activity and can save you $20-$30 per month. So, what you need to do is to call your Internet provider and ask for a cheaper package. If they put up a fight, threaten to switch providers and they’ll change their tune. (Although this may be uncomfortable for the non-confrontational, it is a must.)
There is also the option to cancel your land telephone line. Now days, most people in the 18-35 age bracket don’t have a landline, but if you do and you also have a cell, then ditch it. It is a useless expense. If you really need that extra phone number then get a free one from servicers like Google that forwards to your cell phone and has neat features like message transcription sent to email. There’s no need to waste money on that landline. Also, when it comes to your cell phone, cut down the plan. Ask yourself if you really need all of those minutes and all of those text messages or truly unlimited data. Many phones have Wifi now and have access to applications like Skype that allow you to talk to your friends for free. Use those instead and tell your friends about it so that you can all cut costs together.
Another idea is to carpool. Cliché, I know, but a definite must for those who travel a lot. You can also cut out snack foods – - ice cream, chips, candy, vending machine impulse buys.
All of these changes sound like small changes that don’t seem worth it to make for the savings but if you stop to think about how much you actually spend in the aggregate on all of these things every day and every month, then you will realize how much money you can be saving and putting towards something productive. EACH of the above changes can save you from $10 to $70 per month, which can provide you a nice start for that dream fund.
Two caveats: (1) You probably can’t do this alone and (2) You need to be realistic.
With regards to the first caveat, starting a dream fund alone is really tough. While people often say “do not go into business with a friend or loved one,” this is one situation where accountability and trust can really play in your favor. Opening an account and labeling it “Dream Fund” is not sufficient as the account will most likely turn into a rainy day fund that you dip into when times seems rough. But if you open the account with another person and pledge to not touch the fund until your dream is ready to happen, then you have a much higher probability of succeeding because you have accountability. When depositing funds, consider those deposits sunk costs. The money is gone just as though you paid a monthly bill. There are no refunds and no take-backs. After a while, it becomes easier and before you know it, there’s a nice little fund that you can put towards something you’ve always wanted.
Secondly, you must be realistic. What is the dream fund for? What interest are you earning on the account? What type of account do you have? These are all questions that need to be considered and you need to do your homework as to what numbers you are working with – - is it a few hundred dollars a year, a few thousand, or more? The more people you have contributing to the fund, the faster you reach your goal, but the more responsibility and shared decision making there must be. Know who you’re working with and what you’re after. In the meantime, as money accrues, take the time to work on your business plan, your school application essays, or your resumé and interview skills so that you can hit the ground running when your Dream Fund matures.
It’s time to think long-term and about the big picture. Forget the junk that needlessly drains your already-strained finances and deposit the money that you were sinking into those lost-causes into your Dream Fund.
