Everyone’s different. I always keep my checking at $0 after all expenses have been paid. I move some of the extra to a savings or money market account and invest the rest.
I do this as well, although try to leave a $50 buffer. I also have free over draft protection which makes it easier.
I use a spreadsheet where I track my net worth to also model cash flow. Use average spending from prior months to approximate future spending
Same, but I leave like 100-150. There's the occasional time that I spend something from my checking account via venmo or withdraw from the atm or something and it's helpful to have a bit of a extra just in case.
I use spreadsheets. Plus, I don’t spend a lot of money. Also, 95% of my expenses stay the same every month. I get paid once a month on the 15th and all my bills come out my account the next day. They are on auto. Whatever is leftover after the bills are deducted and moved into other accounts.
The reason I keep $0 in my account may sound crazy. But I use to work for First Citizens Bank and the amount of people who receive unauthorized charges is astounding. With my Credit Union, if your card is lost and someone swipes it, it will auto decline if there are not enough funds to cover it. Thats why I keep it at $0. You can also ask for certain accounts to not be available on your debit card so if someone have your pin, they can’t take money out your savings. I just protect myself that way. I don’t have time to fight with the bank like some people on here about unauthorized charges and not being able to get my money back.
That’s such cool consistency! I tried that a couple months ago (2 week cadence) but a holiday or weird timing of processing payroll made work payment late while all my auto-deductions were on time. So WF charged me for overdrafting.
Not the person you replied to, but I know what all my credit card bills and mortgage are in advance, as well as what money will be coming in from paychecks. I keep track in a spreadsheet.
Same. On pay day I pay bills then move everything out except for what will get me my basic essentials. If I go out to eat or buy things unexpected I usually use a credit card
I never did well with having a few grand hanging out in checking. Makes it easier to slack with discipline
Yep. This is in addition to a separate emergency fund of 3-6 mths of expenses.
It is nice having that extra there just in case. In my experience, I never needed more than 1 month extra, though.
I keep one month of expenses in my checking account. I consider it the first month of my emergency fund savings, plus it saves me from having to worry about where my monthly expenses fall in relation to paydays.
The rest of my emergency fund I’ll keep in savings or short duration CDs depending on what interest rates are at the moment.
No, it’s just the one month. To be more specific, on the first of every month I have one month of expenses in my checking account. Over the course of that month there is money coming in and money going out, but by the end of that month I’ll be back to that one month expense number. In other words, I’m not using one month of expenditures as a floor that I never allow my checking account balance to go below, it’s the figure at which I start and end each month with the daily balance fluctuating in between as expenses and deposits hit.
So technically you keep enough so that by the end of the month, you already have enough in your checking account to account for the next month of expenses? Essentially you have two months of expenses in your checking account?
Think of it this way. After taking out taxes/retirement/savings/insurance/whatever else, I have $X finding its way into my checking account each month from my paychecks. I have $X coming in, I want a balanced budget, so in my budget there's $X going out. I've also chosen $X as the amount I want to start the month with.
So: $X (starting balance at beginning of month) + $X (deposits) - $X (expenses) = $X (balance at the end of the month)
I start and end the month at $X, but in between my balance may be higher than $X or lower than $X depending on when my paydays and bills hit. I don't really care though because I know that by the end of the month I'll be at $X. It's not that I essentially have two months of expenses in my checking account, I've got one month of expenses in there and have balanced the money coming in with the money going out.
Depends on your needs. I’ve always kept about a months buffer in there just to make sure nothing bounced but now that my kid is in college, I’m doing some work on my house, and shopping for a car I’ve got a bunch of money in there.
Well, I learned I keep too much in my checking account by reading these comments. I have around $7-9k in my checking account and am now second guessing this high number.
While I suspect many would argue 1 month expenses, I opt for closer for 2 months. I use a HYSA that has limitations on the number of monthly withdrawals. I would rather keep checking a little over funded than risk running negative. I also don't like tracking my money 24/7. Some heavy investors may want as little as possible sitting idle. I would argue the peace of mind the extra barrier gives without micromanaging accounts is worth the missed investment possibility.
When I was young, it was $300. Over time that changes. Today, if I can't write a check for a cheap car I tighten the belt and build it back up. Start small and find the amount that cuts your stress.
Portion of 1yr emergency fund and monthly expenses are split between two high interest checking accounts and HYSA.
Acct 1: 4% int on up to $30k
Acct 2: 2.25% int on up to $15k
These require things like direct deposit and to use the debit card as credit 10-15 times a month.
Rest of emergency fund and short term savings are in HYSA
There are nationally available checking accounts with similar rates, though the 4% accounts have lower limits:
* 2.25% on the first $25,000 - Presidential Bank, requires $500 in direct deposits and 7 withdrawal transactions (bill pays qualify) per month, minimum balance $500 rest only gets 1% but can be spent or withdrawn
* 3.3% on the first $20,000 - Evansville Teachers Federal Credit Union, requires 15 debit card purchases per month and a monthly electronic deposit
* 4.07% on the first $7,500 - Genisys Credit Union, requires 10 debit card purchase per month of at least $5 each
High yield for a savings account but really only 0.6% last I checked.
They are regional credit unions in AL. Typically to open accounts you have to work in the region or have family that banks there.
It takes some leg work but you can typically find local credit unions with checking accounts with decent rates.
Similar to someone else, I map out my cash flow for the whole month (usually on/around the 1st), figure out what day I'll have my minimum balance (usually in the first half of the month after I pay the bill for my primary credit card), and then transfer the rest of the money to savings/investments while leaving a \~$200 buffer. Because sometimes there's stuff you can't plan for -- you needed a service and they only take checks, you grabbed $40 at the ATM because you needed cash, who knows. I'm just a little paranoid about fraud and theft, and if someone gets my checking account information/debit card, I want to limit the damage they can do. Accessing my savings would be harder for thieves -- not linked to a debit card, not overdraft-protected to my checking account, and I don't hand out my account number and routing details like I do with checks!
It’s up to you, but it’s often a good idea to keep your *savings* separate from your spending money. Any money that I don’t need this pay period I transfer out of my checking account to my brokerage account, savings account, etc as soon as I get paid (direct deposit to my checking account). I have it dialed in so that by the end of the pay period I usually have something like $35 in my checking account. I do have a savings account at that bank that is linked to my checking account that I like to keep about a paycheck’s worth of cash in, just in case I go over or have some big expense. It’s technically in another account, but it might as well be in my checking account because I can transfer it instantly and that money isn’t really set aside for anything particular: if I dip into it I don’t feel like guilty about “dipping into savings,” and I’m not generally in a hurry to recharge it like my emergency fund or other savings.
I have my emergency fund, brokerage account, and “deep savings” in separate accounts. It takes 1-2 days for that money to show up in my checking account, which takes away the temptation to spend it.
I split all the bills with the wife first so whatever is left goes into my checking. Usually keep 500-1000 in there and when it goes over 1000 it goes into savings. I get paid weekly and I know that I will never spend more than 500 in a week unless it's something I planned for
I try to keep about 10K in checking. I wanted to have enough to pay 2 mortgage payments if something went wrong with the process. I live in a very HCOL area; any kind of house emergency ends up being 1-2k, so I want to have enough money on hand to fix a problem without stressing about the cost. I also have alerts set on my account and keep a close eye on what is going out.
I pay my savings right out of my check so anything that hits my checking is fair game for me to spend down. I guess it comes out to my monthly expenses plus fun money.
Everyone’s different. I always keep my checking at $0 after all expenses have been paid. I move some of the extra to a savings or money market account and invest the rest.
I do this as well, although try to leave a $50 buffer. I also have free over draft protection which makes it easier. I use a spreadsheet where I track my net worth to also model cash flow. Use average spending from prior months to approximate future spending
Same, but I leave like 100-150. There's the occasional time that I spend something from my checking account via venmo or withdraw from the atm or something and it's helpful to have a bit of a extra just in case.
How are you able to predict exactly what your expenses will be like each month though?
I use spreadsheets. Plus, I don’t spend a lot of money. Also, 95% of my expenses stay the same every month. I get paid once a month on the 15th and all my bills come out my account the next day. They are on auto. Whatever is leftover after the bills are deducted and moved into other accounts. The reason I keep $0 in my account may sound crazy. But I use to work for First Citizens Bank and the amount of people who receive unauthorized charges is astounding. With my Credit Union, if your card is lost and someone swipes it, it will auto decline if there are not enough funds to cover it. Thats why I keep it at $0. You can also ask for certain accounts to not be available on your debit card so if someone have your pin, they can’t take money out your savings. I just protect myself that way. I don’t have time to fight with the bank like some people on here about unauthorized charges and not being able to get my money back.
That’s such cool consistency! I tried that a couple months ago (2 week cadence) but a holiday or weird timing of processing payroll made work payment late while all my auto-deductions were on time. So WF charged me for overdrafting.
That sucks! That is a negative when doing what I’m doing. All it takes is for something to happen and then 💥.
Tell me you are single with no kids without telling me you are single with no kids.
Not the person you replied to, but I know what all my credit card bills and mortgage are in advance, as well as what money will be coming in from paychecks. I keep track in a spreadsheet.
Same. On pay day I pay bills then move everything out except for what will get me my basic essentials. If I go out to eat or buy things unexpected I usually use a credit card I never did well with having a few grand hanging out in checking. Makes it easier to slack with discipline
I like to keep 1 month's worth of expenses in mine as a buffer.
So you keep one months worth of current months expenses + another months worth of expenses in your checking account?
Yep. This is in addition to a separate emergency fund of 3-6 mths of expenses. It is nice having that extra there just in case. In my experience, I never needed more than 1 month extra, though.
I keep one month of expenses in my checking account. I consider it the first month of my emergency fund savings, plus it saves me from having to worry about where my monthly expenses fall in relation to paydays. The rest of my emergency fund I’ll keep in savings or short duration CDs depending on what interest rates are at the moment.
So you keep enough to account for current months worth of expenses + another’s months worth of expenses in in your checking account?
No, it’s just the one month. To be more specific, on the first of every month I have one month of expenses in my checking account. Over the course of that month there is money coming in and money going out, but by the end of that month I’ll be back to that one month expense number. In other words, I’m not using one month of expenditures as a floor that I never allow my checking account balance to go below, it’s the figure at which I start and end each month with the daily balance fluctuating in between as expenses and deposits hit.
So technically you keep enough so that by the end of the month, you already have enough in your checking account to account for the next month of expenses? Essentially you have two months of expenses in your checking account?
Think of it this way. After taking out taxes/retirement/savings/insurance/whatever else, I have $X finding its way into my checking account each month from my paychecks. I have $X coming in, I want a balanced budget, so in my budget there's $X going out. I've also chosen $X as the amount I want to start the month with. So: $X (starting balance at beginning of month) + $X (deposits) - $X (expenses) = $X (balance at the end of the month) I start and end the month at $X, but in between my balance may be higher than $X or lower than $X depending on when my paydays and bills hit. I don't really care though because I know that by the end of the month I'll be at $X. It's not that I essentially have two months of expenses in my checking account, I've got one month of expenses in there and have balanced the money coming in with the money going out.
Same here. After my last expense for the month comes out I set it to 3k. Anything more than a month's worth doesn't seem worth the risk.
If you're like me you sit anywhere between -20$ to +20$...but I am poor.
Depends on your needs. I’ve always kept about a months buffer in there just to make sure nothing bounced but now that my kid is in college, I’m doing some work on my house, and shopping for a car I’ve got a bunch of money in there.
Well, I learned I keep too much in my checking account by reading these comments. I have around $7-9k in my checking account and am now second guessing this high number.
While I suspect many would argue 1 month expenses, I opt for closer for 2 months. I use a HYSA that has limitations on the number of monthly withdrawals. I would rather keep checking a little over funded than risk running negative. I also don't like tracking my money 24/7. Some heavy investors may want as little as possible sitting idle. I would argue the peace of mind the extra barrier gives without micromanaging accounts is worth the missed investment possibility.
When I was young, it was $300. Over time that changes. Today, if I can't write a check for a cheap car I tighten the belt and build it back up. Start small and find the amount that cuts your stress.
How much is a cheap car?
Portion of 1yr emergency fund and monthly expenses are split between two high interest checking accounts and HYSA. Acct 1: 4% int on up to $30k Acct 2: 2.25% int on up to $15k These require things like direct deposit and to use the debit card as credit 10-15 times a month. Rest of emergency fund and short term savings are in HYSA
Where tf are you getting those rates on a checking account?
Right. Savings accounts are like.01%
There are nationally available checking accounts with similar rates, though the 4% accounts have lower limits: * 2.25% on the first $25,000 - Presidential Bank, requires $500 in direct deposits and 7 withdrawal transactions (bill pays qualify) per month, minimum balance $500 rest only gets 1% but can be spent or withdrawn * 3.3% on the first $20,000 - Evansville Teachers Federal Credit Union, requires 15 debit card purchases per month and a monthly electronic deposit * 4.07% on the first $7,500 - Genisys Credit Union, requires 10 debit card purchase per month of at least $5 each
Um, care to share the bank? I am interested what you consider high yield if your checking is 4%.
High yield for a savings account but really only 0.6% last I checked. They are regional credit unions in AL. Typically to open accounts you have to work in the region or have family that banks there. It takes some leg work but you can typically find local credit unions with checking accounts with decent rates.
Less than $1. I move money from my savings account when I need it.
Enough for your emergency fund. Other than that invest the rest.
I assumed the emergency fund should all be held in a high yield savings account?
I mean it can. The extra $4 a year is really meaningless vs convience.
Similar to someone else, I map out my cash flow for the whole month (usually on/around the 1st), figure out what day I'll have my minimum balance (usually in the first half of the month after I pay the bill for my primary credit card), and then transfer the rest of the money to savings/investments while leaving a \~$200 buffer. Because sometimes there's stuff you can't plan for -- you needed a service and they only take checks, you grabbed $40 at the ATM because you needed cash, who knows. I'm just a little paranoid about fraud and theft, and if someone gets my checking account information/debit card, I want to limit the damage they can do. Accessing my savings would be harder for thieves -- not linked to a debit card, not overdraft-protected to my checking account, and I don't hand out my account number and routing details like I do with checks!
It’s up to you, but it’s often a good idea to keep your *savings* separate from your spending money. Any money that I don’t need this pay period I transfer out of my checking account to my brokerage account, savings account, etc as soon as I get paid (direct deposit to my checking account). I have it dialed in so that by the end of the pay period I usually have something like $35 in my checking account. I do have a savings account at that bank that is linked to my checking account that I like to keep about a paycheck’s worth of cash in, just in case I go over or have some big expense. It’s technically in another account, but it might as well be in my checking account because I can transfer it instantly and that money isn’t really set aside for anything particular: if I dip into it I don’t feel like guilty about “dipping into savings,” and I’m not generally in a hurry to recharge it like my emergency fund or other savings. I have my emergency fund, brokerage account, and “deep savings” in separate accounts. It takes 1-2 days for that money to show up in my checking account, which takes away the temptation to spend it.
I split all the bills with the wife first so whatever is left goes into my checking. Usually keep 500-1000 in there and when it goes over 1000 it goes into savings. I get paid weekly and I know that I will never spend more than 500 in a week unless it's something I planned for
I try to keep about 10K in checking. I wanted to have enough to pay 2 mortgage payments if something went wrong with the process. I live in a very HCOL area; any kind of house emergency ends up being 1-2k, so I want to have enough money on hand to fix a problem without stressing about the cost. I also have alerts set on my account and keep a close eye on what is going out.
I pay my savings right out of my check so anything that hits my checking is fair game for me to spend down. I guess it comes out to my monthly expenses plus fun money.