“The real troubles in your life are apt to be things that never crossed your worried mind, the kind that blindside you at 4 pm on some idle Tuesday.”
– Kurt Vonnegut
I wish we were always smart enough to prepare for flat tires, traffic tickets, coffee spills on our laptops, emergency flights for someone sick in our family, and other unexpected expenses. But we’re not — even though they consistently happen, month after month. Ironically, the expenses themselves may be unexpected, but the occurrence of them is very predictable.
Here’s an example late fee that I just got:
I wish I hadn’t gotten this, but things fell through the cracks with the book launch. After learning this the hard way a few times, I decided to get proactive about unexpected expenses.
I’ve set up a sub-savings account and now save about $150/month for unexpected expenses. At the end of the year, I sweep the account, taking any extra that’s still in it, and move it over to my “general” savings account.
In your savings account
In my ING savings account, I create sub-accounts by logging into my account, clicking “New account,” and following the instructions. It will seem like you’re creating an entirely new savings account, but you’re not — after creating it, it will be a sub-account within your main account. ING Direct works best for me. I haven’t found another savings account that lets you create sub-accounts, but you can always use Excel.
These sub-savings accounts are incredibly useful for focusing your savings. I’ve previously written about using them to hedge fuel costs, but in general, it’s easier to save for specific goals rather than a guilty, “I should save” account.
Sub-accounts in your email
I also have a sub-label set up in Gmail using Folders4Gmail:
I like to add all important emails to various sub-accounts so I can eyeball them and get a sense for how often something is coming in — especially when I can’t easily track something (e.g., how many speaking engagements I’m getting).
Book excerpt: Unexpected income & expenses
From Chapter 4 (“Conscious Spending”) of my new book (#1 Amazon bestseller), where I describe how to handle unexpected income and expenses: