Why I Have an Oops Account
A few years ago, I was out one day running some errands while my husband stayed home to do our taxes. "What's the damage?" I asked when I got home and saw that dreaded look of doom on his face. I won't tell you how much money we somehow wound up owing that year, but let's just say it was enough to cause a near panic attack.
Fortunately, we had enough money in our savings account to pay back what we owed, but it was pretty discouraging to see our balance drop in one fell swoop. It also meant we could kiss the vacation we'd been saving for goodbye, and that we'd need to cut out many of life's little luxuries if we wanted to build our savings back up.
Learning From Past Mistakes
But there was one good thing that came out of that incident: My husband and I learned to get smarter about saving by creating what we call an oops account. To this day, any time we think we might get hit with a large bill, or notice a problem with our car or house, we try to squeeze out some extra money to stick into that oops account.
Case in point: When we took our car in for a routine oil change about a year ago, we were warned that our tires were starting to go. Knowing it would cost a good $400 or so to get them replaced, we immediately started scrambling to add extra money to our oops account. I took on some additional freelance assignments to earn extra cash, and we limited our leisure activities till we were able to come up with enough to pay for what the new tires were likely to cost. Sure enough, six months later, there we were getting our oil changed again when the mechanic told us our tires were completely worn down. The total bill for our new tires wound up hitting around $450 (we'd forgotten to add sales tax), but because we'd already saved $400, we didn't have to stress about coming up with the money. We just dipped into our oops account and moved on.
Not a Regular Savings Account
To be clear, our oops account is actually separate from our primary savings account. This way, when we do withdraw money, we don't get depressed at seeing our real savings balance go down. In fact, because the money in there tends to be tied to specific expenses that we know we'll need to pay for eventually, we sort of play this game in our heads where we pretend that our oops money isn't really ours.
Of course, if our oops account doesn't have enough money to cover a given expense, we revert to our regular savings. Also, while we try to put money into both our regular savings account and our oops account, these days, we find ourselves putting more and more money into the latter. (I guess that's what happens when you grow up and have kids, a car and a mortgage.) But the good news is that ever since opening that separate account, we've only had to take money out of our regular savings on a few occasions.
All in all, I recommend an oops account to anyone who has trouble staying disciplined about saving, and to anyone who hates the feeling of watching his or her savings account drop every time something goes wrong. It's certainly saved me a whole wad of anxiety and heartache.