How much cushion in checkbook?

[geojen]

How much of a safety cushion do you keep in your checkbook that is not reflected in the balance. Right now, I have 225. I was just wondering what amount everyone thought would be enough.

[RJB1180]

I keep 500 at payday, but then the weekley bills come out. I never let the balance go below 100.

[poundwise]

$50.00

[LuxLiving]

500 buffer in joint checking. We have our MM account linked to our checking so that any crazy wild haired check that shows up at the bank and they'd tap the Money Market. Never have used it but the link is there.

[Bookie]

$100.00

[PrincessPerky]

1000, but I have lousy balancing skills..plus it is easy access (for my mini EF), I don't have a local savings, I do have ing, but that isn't as easy to get to.

oh and it is easy math, I just drop a one fromt he thousands place, put it back at balance statement time...

[Kris10Leigh]

$25 in the one that runs like clock-work, and that money actually builds up. I think right now it has $300 cushion. Eventually I'll send the excess to the CC. I have that account down to a science and it covers ALL bills.

Now the one we live out of is a different story. I'm happy if $50 remains the day before payday. Last week we went under by $1.50 and I was sooooo mad! Had to pay a $9 fee for a $1.50 mistake.

[sakigt]

Usually $50.

I keep ridiculously accurate records, so I usually spend down to less than that comfortably.

[pearlieq]

The balance rarely gets below $1000, but that's because I allocate money for things ahead of time. Sometimes it takes a bit for the expense to catch up with the money I've got reserved.

I have no problem allocating the money down to my last dollar, though. I'm a fastidious record-keeper and I check my bank accounts at least daily. Plus, with most day to day expenses being in cash or on the credit cards, the checking account doesn't see to much action anymore!

[geojen]

I guess what I really meant was this: I have 200 dollars in my checking account that is not reflected in the balance to cover any oopsies I might have, even though I keep meticulous records and update our records several times a week. Just wondering when I can stop deducting 25 bucks a week for check book cushion out of the money we use to pay bills....

[greedy4chips]

What good does a cushion do when you know it is there and how much it is? If you don't have the discipline to not write out a check that puts you below $0 then why would you have the discipline to not write out a check that depletes the cushion too?

Many banks offer overdraft protection for the oops that occassionally happen. They charge you interest on your overdraft loan until it is paid back...much cheaper than overdraft charges.

Checkbook cushions are like the speed limit cushion that allows everyone to excede the speed limit and not get a ticket...eventually someone does push it too far and gets a ticket!

[sweeps]

I can see several good reasons to have a cushion in your checking account:
1. Sometimes you make an error in balancing your checkbook, and being overdrawn is very costly.
2. Sometimes you need cash for unexpected/unplanned expenses.
3. Sometimes the bank or more commonly a merchant makes a mistake and takes out too much money for something. You can get it fixed, but it's a PITA in the meantime.
4. When you have a SO with a need to write checks/withdraw money on the go you don't necessarily know when he or she needs to do it.

[PrincessPerky]

How about if your auto deposit scres up? and your auto draft doesn't....

Or if your autodraft screws up in place value and your auto deposit doesn't?

Or if you have an emergency and you need cash NOW, the local bank is easier to withdraw from than the online ING...not to mention with a checkcard is almost as good as cash......

[greedy4chips]

sweepsplayer and princessperky,
I am not sure if you were responding to my post, but my point is I don't run my checkbook to the last nickel according to my monthly budget and put the rest into a savings account to maximize interest earned. That is my bad and perhaps I should run a tighter checkbook.

To me, having a cushion in place to cover any oops is like walking on thin ice, eventually you will fall through! For me, keeping our checkbook balanced monthly and knowing what we can spend is good enough versus balance deception to protect my possible overdraft(s).

[MonkeyMama]

$0.

I keep meticulous track of things electronically so I always know what I have. (Reduces math errors which is the only problem I have run across). I don't have interest on my checking so I have no interest in keeping money in there. I like to keep my balance 0.

I have a related savings account that usually has a significant balance (at least 1k) that I can access immediately&covers overdrafts with no charge so it is no biggie. Though today it does have only $4. I guess I don't remember the last time I needed cash NOW and it couldn't wait.

[boefixepa]

Huum...interesting train of thought. I use to stress so much about the checking account. I had the overdraft for oops situations. But since I've started the evelope system there hasn't even been a need to worry. After about a year on the system, when I started using CC again to earn points and interest by waiting a month to pay, I switch my checking to an interest bearing account because it never had less then 2.5K in it. When it started not have less than 4K I opened an ING account (better rate) and started to transfer money into there every month. So the balance in my checking is no more than a passing thought anymore...it was a VERY weird paradiam shift for me. I keep all accounts constantly balances and the thought of have a cushion is not even needed. Everything has it's envelope!

[Broken Arrow]

[Gruntina]

I usually have a good 200 or more of a safety cushion since I started using a budget system and been amaze how well I do managing my money since. It’s a powerful feeling of self empowerment when you know you are in control of your money. I have been walking standing tall since then.

But... I do remember the days I lived from paycheck to paycheck and worried if I will bounce my check the next day and so. I’ve had too many sleepless nights. Because of that awful memory, I admit, I do not include in my bank balance my bank’s monthly dividends. Every time I get monthly dividends from my bank, I ignore it and just leave it in my checking account pretending I never got it. I just follow the balance on my checkbook and not on my bank account statement. I do however check off each payment/deposits I made to ensure everything is all accounted for. I know many may disagree with me on this but it’s a mind thing for me

[geojen]

I feel the same way. Having the 200 dollar cushion in there doesn't entice me to spend it in the least. It is there in case we need to get cash quickly. Plus, it allows me to spend the other money in my account down to zero with out feeling nervous. I know I am covered no matter what. It's not thin ice, its a small insurance policy.

[Mathew Green]

Originally Posted by geojen

I feel the same way. Having the 200 dollar cushion in there doesn't entice me to spend it in the least. It is there in case we need to get cash quickly. Plus, it allows me to spend the other money in my account down to zero with out feeling nervous. I know I am covered no matter what. It's not thin ice, its a small insurance policy.

Same here. I keep my checking account in Excel and have a chart that shows my expected balance for the next 12 months based on known average bills and average income. The chart has a red line at $200 to warn me when my projected balance falls into the "Error Reserve". The spreadsheet also transfers money from checking to a "Put In Savings" column whenever my checking account has more than $1300 in it.

With overdraft fees running $30 or more, running the account down to zero seems too risky for me. What if you enter an automatic draft on the wrong day or enter a $391 draft as $319? Even careful people sometimes make mistakes or transpose digits.

FWIW I set my reserve at $200 because I only have two monthly bills that are bigger than that. People who routinely draft larger amounts should probably have a bigger reserve or automatic overdraft protection.