Check point to the July budget.

[Radiance]

Pay day today!
I am balancing out my accounts and my budget allocations, I am using this thread to post the questions that would come along.

Question 1: Do you leave a "just in case" amount in the checking accounts for unexpected fees and other charges? For example, my direct deposit to my checking account is exactly 2,274.91. But I was thinking about starting my allocation and budgeting with 2,200, leaving the 74.91 "forgotten" there in case an unexpected charge or fee comes alone. I don't want to pay overdraft fees to my bank.

What do you think?

[creditcardfree]

We have an emergency fund account and a second checking account, where I put a little extra cushion, as well as money we save for six month auto insurance premiums, ect. Our checking account will pull from that second account before an overdraft would happen. I also watch our account online like a hawk, so I'm at the ready to transfer money if needed.

If this is truly extra funds, it is a good idea to do until you have a small cushion set up for this sort of thing. The amount is up to you. Right now I have a $400 cushion in addition to our emergency fund.

[elessar78]

I don't have a line item for a cushion in my budget for unexpected fees and charges.

Like the other post, I have an emergency fund that is a nice round number so I know if something gets pulled from there. My checking account is linked to that, so in the case that I would overdraft, it automatically pulls it out of the emergency fund money.

So indirectly, if you want my suggestion, yeah "forget" about that $74 and start putting it away into a savings acct.

[Radiance]

Sigh,

It is incredible how unaware I have lived my life.

ok, so, I called my bank and they informed me I have overdraft protection from my savings, but in 100 increments, so If I overdraft by 105, they will transfer 200 from my savings. up to a maximum of 6 transfers per month. No additional fees are charged (unlike wachovia who would 'protect' me but charge me $120 each time they did!!!, grumble, grumble)

Since my savings is currently at $50, I am leaving these 74 in the checkings for now. I really only expect unexpected by under $3 in case I unknownly incur on a bank fee or ATM fee or the like. Internet purchases have additional international fees occasionally.

I too check my checking each day to ensure all transactions are accounted for and I can act immediatelly in case of a discrepancy. It takes less that 2 min to login, check and log out.

Thanks!

[buildmybudget]

There's really nothing wrong with the strategy you are proposing, but I suggest just setting yourself an amount to be a consistent buffer--say $75. So each time you get paid, pay your bills and transfer everything that isn't allocated to your savings or EF..but always leave $75 leftover. This way you can maximize your savings and know you are covered if something small happens. I keep at least a $200 buffer for our main checking account, which works out for us.

[creditcardfree]

That's good news that you have overdraft protection. Since you are watching your account it may be unlikely to happen. If they transfer $200, and you only need $105, you should be able to immediately pay back the $95 to your savings.

The above poster has a great idea, too. But that may not always work for you if your bugdet is as tight as it is.