How much do you keep in checking?

[graceful]

We have 2 checking accounts. We have a buffer of a few hundred in the checking that we pay most of our monthly bills out of. The checking account we pay our credit card bills out of only has a buffer of about a hundred.

DH's pay check gets direct deposited into a money market account at one bank. At the beginning of the month, I have it set up that $xxxx is transferred into the checking account to cover the mortgage and other bills that are usually set up to be paid a few days later.

Since I tend to pay most bills on-line, I usually do a money transfer to checking at the same time. This is for transfers and payments that aren't automated such as for credit card payments, etc.

If I write a physical check (rarely) for under a hundred and forgot to make an online transfer, the buffer is usually enough. Anything larger and I have to remember to make the transfer asap or our overdraft line of credit kicks in so we won't have to pay any fees except a few days interest on the line of credit. I usually pay it off in full the second I am online again so the interest is usually under $1 and I haven't triggered the overdraft line of credit in years. I am online all the time now.

[disneysteve]

If I write a physical check (rarely) for under a hundred and forgot to make an online transfer, the buffer is usually enough.

This is another reason why I like to keep a big buffer in the account. Since so many bills get paid automatically or I pay them manually with online banking, I do occasionally forget to enter a transaction.

[Radiance]

I just set all my online bills to pay a couple of weeks after payday. No stress there

Money Mama, that is a great idea! Some of my stuff will be difficult for me to to change, such as my rent which needs to be paid before the 3rd...

Anyhow, to answer the original question, I keep $100 of just-in-case money to avoid overdraft. Althought I could set up overdraft protection with my bank so they take from my savings if I overdraft....nah, $100 is ok,

[GREENBACK]

I generally keep from 4 to 7k depending on the time of year. Right now the big bills are rolling in(taxes, insurance, yearly dues, etc.) so I keep it a little on the high side. I once bounced a check by mistake because I was keeping my balance low. I learned not to do that again. Interest rates are so low right now that I don't sweat an extra grand or two sitting in a checking account.

[Snodog]

Right now we have 8-9k in checking which is a little higher than usual.

I like to keep a nice buffer because I hate fooling around waiting to get paid in order to pay bills.

We have always operated like this and have never bounced a check.

[fruitbowlk]

$0. I only use my checking account to pay bills.

[Mike75]

The minimum amount. Each month I spend the money and on the day before my next pay check, I take out the money from Checking account (if any ) and put it in a savings account.

[swanson719]

Sounds like everyone does the same thing, though by different means. Edge it down when big bills aren't expected, and then build it up when they are. Otherwise, keep enough to cover the month to month expenses when your bills are due.

And yes, we keep a paper registry and pay all of our bills by a check in the mail. Our bank has an online registry, but it only updates itself at 5pm every business day. Which means if I transfer money from savings today, being Saturday, it won't hit my checking account until 5pm Monday afternoon. I hate this bank for that reason, but DW has had it for 8 years and doesn't want to change, and it's not a battle worth fighting to me.

As far as online bill pay, we had this set up with Ford when I had a car payment. I get paid the 1st and 15th, so I had the bill due on the 10th, and the bill pay set for the 5th. Ford decided to take the money I had set up twice on the same day - effectively charging me a double car payment. This had a cascade effect and bounced half of my other bills due. So I swore off online bill pay via automatic draft. Costs us the cost of stamps and envelopes, which is about $50 a year. I paid more in overdraft fees on those bounced checks in a week than what it will cost to do manual bill pay in 3 years.

[PrincessPerky]

I do online bill pay, but I do not have the various businesses in charge of it.

My bank account is set up to pay automatically for most, and manually for others. I just log in when I get my bill (email or paper) tell my bank to pay them, and thats it. Less work than writing a check, and no more risk of overpaying than a check either. (actually with my bad handwriting, less risk!)

[disneysteve]

Ford decided to take the money I had set up twice on the same day - effectively charging me a double car payment. This had a cascade effect and bounced half of my other bills due. So I swore off online bill pay via automatic draft.

You shouldn't have had to pay any fees if Ford screwed up and double billed you. They should have reimbursed those charges.

That is also a good reason to keep a buffer in your account, just in case something like that happens.

As for online bill pay, do as PrincessPerky wrote. Pay them online manually instead of writing a check. I pay our CC bills that way every month. I pay our mortgage that way every month. That way you decide when the payment gets made and in what amount and you have proof that you made the payment. No chance of a check getting lost in the mail or arriving late. Much safer and more convenient than writing paper checks. The only bills I pay by paper check are those for which electronic payments aren't an option. I write maybe 5 checks per month.

[maat55]

I use multiple accounts for different purposes(wife works at a bank, no charges).

I like to keep 1 months expenses and no less than half months expenses for each account.

I'm the only one who uses these expense accounts and am not tempted to misuse them. DW controls her/our account as she wishes after deductions for savings/investments.

[buildmybudget]

There is no reason whatsoever to have more than a few hundred in checking. First, there is overdraft protection in case of an "emergency" and secondly, these emergencies are what credit cards are for. The most important thing to note is that is costing you money to keep that money there instead of in a savings or money market fund. Perhaps its not a great deal of money(in interest) but regardless it simply makes no sense to keep extra funds in checking.

[GrimJack]

Actually, there is a very good reason to keep a lot of money in checking - in my case, my CU pays 2.5207% on my checking and 0.2500% on my savings. ING pays 1.20% on savings.

[buildmybudget]

Grim, I would say that is generally the exception to the rule...

[LivingAlmostLarge]

$5k or one month of expenses. I'm too lazy to chase returns and typically I pay all bills ahead of schedule by a month. So i just leave a buffer.