Saving Tip: Using sub-savings accounts for unexpected expenses
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“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’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 CapitalOne360 account (formerly ING Direct), 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. It’s possible to simulate sub-savings accounts with any savings account (for example, by manually creating your own “subaccounts” in Excel.) But I like Capital One 360 because it just does it for me.
Sub-accounts in your email
I also have a sub-label set up in Gmail using Folders4Gmail:
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:
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