In Quicken (or whatever budgeting software you use), when you enter an expenditure, you can assign it a category (e.g., gasoline, clothing, cell phone, etc).
I added an extra category to my budget: Stupid Mistakes. This is for things I have to spend money on when I make do something dumb, like getting a library fines, having to switch a flight because I didn’t plan ahead, or paying an extra fee because I don’t have any cash on me.
When I started paying attention to my stupid mistakes, I basically eliminated them altogether within 6 weeks. It’s amazing how a budget–one you created yourself–can change your spending behavior. Now I take the money I would have spent on mistakes and put half into savings and spend half on myself.
How much do you spend on mistakes every month?
I'm the New York Times bestselling author of I Will Teach You To Be Rich. I co-founded PBwiki and graduated from Stanford.
4 comments
Leave a commenthi ramit! cool tip! i don’t have a lot to put in there but sometimes i get those atm fees for using a non-bank atm or for cash backs.. thanks!
Really great idea. I’m going to do this is Microsoft Money.
This is way late, but I’m working my way through the archives. Regarding Cheska’s comment about ATM fees – those aren’t stupid mistake. The “bank charge” category in Quicken takes care of those as it should. I believe bank charges are also tax deductible. I’m loving your site and I appreciate all your words of wisdom.
oh. my. god. This is a GREAT idea! I’m going to start doing this this month.
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