Automate Unexpected Costs With A "Stupid Mistakes" Sub-Account

You can plan for weddings, save up for retirement, and even tuck away cash for that next iPhone upgrade, but you can't predict your next parking ticket or coffee-soaked laptop. Set up a "stupid mistakes" sub-account to save against your future oopsies.

Photo by Kevin Lawver.

Ramit Sethi, author of the I Will Teach You To Be Rich blog and book, suggests that for his kind of mistakes—parking tickets, late fees, and lost objects—a Stupid Mistakes fund is a tiny bit different than general extra cash—a general "emergency fund"—he keeps on hand. It's a budgeted, monthly savings account.

Here's the trick: A lot of what seems unpredictable is extremely predictable - over the long term. What seems like surprise expenses is actually not a surprise if you analyse your spending for the past 5 years. Which of course nobody does.

For example, that "surprise" car repair? It might not happen in the same month, but every year, you might average spending about $US400 on car repair. That's $US33/month. Once you know that, set up an automatic deposit into your sub-savings account and you're done.

How do you save up for life's little surprises? Tell us what you do different, or what you've figured out to budget for, in the comments.

Automation: Add a "Stupid Mistakes" sub-savings account [I Will Teach You To Be Rich]


    +1 to TheFlu

    Spilling water on your laptop + parking fines can easily be avoided through common sense.

    Getting jumped in the street cant always be avoided, and *thats* why you have an emergency fund.

      @davo1111 spill water or like me drop a laptop and completely crack the screen...

      Emergency funds are great.

    Coyote, I am the exact same. I've had a 'buffer' in my account for the past two years and I've only had to dip into it once or twice. One was the day before I got paid and went $20 into it, the other was when I was on holidays (planned) right after some unexpected expenses so I didn't have as much saved as I would have liked. It meant that by using my buffer I didn't have to use my credit card. I highly recommend this suggestion - start with a small buffer and gradually build it up.

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