How much do you keep in your checking account?

[disneysteve]

I'm always a bit conflicted over how much to keep in our checking account (which earns no interest). I tend to keep about a month's worth of expenses in there which for us is about $7,000. But I also feel like it's a waste having that much in there earning nothing. Sometimes I let it get down in the 4K-5K range but for some reason I feel uneasy going lower than that even though I know we've got almost 30K in our Ally savings account that I can transfer over easily enough. I guess I just like the convenience of not having to shuffle things around every time there's a bill to pay.

How do you all handle that?

[Jluke]

My checking account is with my credit union. I have a money market account there too so I can easily and instantly transfer money between checking and the money market accounts. Interest in the mm account is 0.2% so not really looking for that to make money.

I keep $20 in checking as my base amount. I move exact amounts into checking when I need to write a check or pay a bill online.

Money market is around 4k

[kork13]

For the longest time, I've normally kept $1k-$2k as my baseline minimum in checking. It's also backed up by $500 in a savings account paired with free overdraft protection. Normally, it hovers around $5k, but variable income & expenses will take it up & down between about $14k and $1k. It has normally worked out for me, though lately we've been dipping down to $200-$300 in multiple months.... So I'm considering bumping up my minimums by another $1k-$2k, while also trying (unsuccessfully thus far) to convince my wife to reign in the discretionary spending.

[disneysteve]

Thanks for the replies so far. I should add that I'm pretty sure the checking account has a minimum balance requirement of $1,500 to maintain free checking. We have never dropped below that so we've never had to pay a penny in fees and we've had this account for over 25 years. So for those who let their accounts go to zero or close to it, that's not an option here. And I wouldn't want to be close to the minimum so I'd always want at least $2,000-2,500 in there at a bare minimum.

[creditcardfree]

At this point in our lives we have a similar amount to you Steve. I just checked and we have just under $7K. I know I've run it higher in recent months often because money is coming in for several months, but then goes back out a few months later...college expenses we are cash flowing primarily. The most I could earn currently in our money market is 2.25% So we may be losing some dollars in interest, but I've found it just easier to keep it in checking at this stage. Finances are personal after all.

[Jluke]

When you move to Florida find a bank or credit union that doesn’t have a minimum required for “free” checking.

Doesnt vanguard offer an account that you can write checks from? Might want to look into that if you want to change things up.

Otherwise you just have to accept that the few thousand there isn’t earning much for you but it does make life easier.

If the balance bothers you, put some excess to your almost paid off mortgage

[disneysteve]

Otherwise you just have to accept that the few thousand there isn’t earning much for you but it does make life easier.

That's pretty much always been my theory. Even if there wasn't a minimum, I don't think I'd ever want less than a couple thousand in the account. The $50 or so/year I'm losing in interest is worth the convenience to me.

[Thrif-t]

50 bucks.ha

My paycheck goes in there, bills get auto paid, savings get transferred to savings account.

I use my credit card for most everything. If I have to write a check now, I can transfer money in same day, so no reason to let it sit in there.

[disneysteve]

I guess there's really no good reason to keep much more than the minimum plus a little cushion in checking. I don't know why the checking balance has always been one of those things that mattered to me. It made a little more sense years ago when it wasn't as easy to move money around. Now it's all electronic and I can do it from my phone in seconds.

Thanks for the input.

[greenskeeper]

$5k worth of float

about 1.5 times an average month of expenses, of course, any extra goes towards the mortgage.

[creditcardfree]

I guess there's really no good reason to keep much more than the minimum plus a little cushion in checking. I don't know why the checking balance has always been one of those things that mattered to me. It made a little more sense years ago when it wasn't as easy to move money around. Now it's all electronic and I can do it from my phone in seconds.

Thanks for the input.

For me it would take a couple days, since our other savings are at other institutions than our checking accounts.

[disneysteve]

For me it would take a couple days, since our other savings are at other institutions than our checking accounts.

Same here, but I can't imagine any reason I would ever need a large amount of money quicker than 2-3 days. I can always charge something and have the money transferred to checking before the bill comes. And in a catastrophic situation, we do keep a stash of cash in a secure place that I can get to at any time. Plus, there's always the option of dipping below the minimum account balance into that $1,500 reserve and just paying the few dollar fee that would trigger.

[bjl584]

I usually keep just enough to cover monthly bills. The account doesn't earn interest, so no sense in keeping too much in there,

I have multiple interest bearing online accounts, and all of them are linked to my primary checking. If I need money I can transfer it easy enough.

[corn18]

$10k or about 1 mo expenses. I always keep in mind what would happen if I die. Don't want the wife worrying about bills when she's planning my funeral.

[disneysteve]

I usually keep just enough to cover monthly bills.

So if your bills are $5,000, do you only keep about that much and the balance dips down close to zero once everything is paid? Or do you keep any cushion in there?