How much cushion in checkbook?

[Gruntina]

Re: How much cushion in checkbook?

Another thought popped up to my mind about my $200 cushion in my checking account. I do it mainly because I gone most of my life worried if I will eat the next day to now security to a level where I do not have to worry about that anymore. Just seeing the $200 dollars cushion in my account has ceased all anxiety attacks and worrying. Also it is a visual evident for me that I have come a long way to breaking out of the poverty lifecycle. This is due to improving my money management wisdom and also developing the "I can" attitude to make my dreams happen.

[Mathew Green]

Re: How much cushion in checkbook?

I recognize the potential for the bank or a merchant to screw up, I guess I've just been lucky. If that was my real concern, however, I would manage it with a few hundred dollars cash always on hand in the house rather than relying on my own inexactness.

This has nothing to do with 'inexactness', it has to do with CYA if a check I've deposited doesn't clear right away or if an electronic payment is taken out sooner than it was supposed to be. Having "a few hundred dollars cash always on hand in the house" won't keep you from having an overdraft unless you realize there's been a screwup before your balance drops below zero.

Some of us like to be more cautious than others, so we keep a bit extra in our checking accounts. I keep ~$200 extra for that purpose, and I'll match the 'exactness' of my bookkeeping against anyone here, and the frequency of my bookkeeping entries too.

[dragonfly]

Re: How much cushion in checkbook?

All that and MORE - brave, cunning, clever and kind are equally represented! No wonder we flock to your blog!!

i can't understand.......
what u want to say ?

[disneysteve]

Re: How much cushion in checkbook?

I don't have anything in my account that isn't reflected in my balance. In my mind, that's like purposely setting your clock 10 minutes fast so you won't be late for work. That said, however, I do keep some surplus funds in my account because I can never be sure how much money I'll need in a given month. Expenses come up that might not have been anticipated and it is easier to have the funds in the checking account than to have to transfer from other places before I can write the check. So my checking balance almost never dips below about $2,000.

[Broken Arrow]

Re: How much cushion in checkbook?

For what it's worth, I think my bookkeeping is as exact as it can possibly get. The second after I swipe my card, for example, I enter that exact amount into my PDA. That way, I can always know what my balance is, how much is actually cleared, and even what my new net worth is, right where I am standing.

Each day, I also go to my bank account online and verify all my entries with what has been posted. When the information is verified, I will update that as well into my PDA, thus updating how much is cleared overall.

The point is, I don't think it gets any more accurate or faster than that, since I'm effectively thinking and fine-tuning my ledger and budget on the spot, and within the span of seconds to minutes, not days. No keeping track of receipts. No relying on my faulty memory for an exact number. No waiting for a statement of some kind.

Oh, and as an added bonus, that also means I can reserve and adjust my budget on my-the-fly as well. I know some people love the sub-account feature on ING, and I have to agree that's pretty cool. However, for me, I can literally do the same anywhere I want, whether I'm standing in grocery line or sitting on the John. I just set up a new entry to reserve a set amount, and voila(!), everything is updated for me.

Naturally, what I can't control is when a merchant or a financial institution makes a mistake or when things don't get updated fast enough. And yes, I admit that once in a long while, something will still slip by me. That's why I work with an easy number of $100. Again, if necessary, I can also dip into it. It's just an adjustable number on my PDA anyway.

i can't understand.......
what u want to say ?

All I know is that whenever a co-worker say something like that, they're trying to hit me up for a favor of some kind.

[Mathew Green]

Re: How much cushion in checkbook?

Mathew Green wrote:
"This has nothing to do with 'inexactness', it has to do with CYA if a check I've deposited doesn't clear right away or if an electronic payment is taken out sooner than it was supposed to be."

spending money you don't have is being inexact.

What the heck are you talking about???

You quoted me, and the wording in your post echos but contradicts what I said. So you must be talking to me. But what you said has absolutely nothing to do with anything I've ever posted in these forums!

I DO NOT spend money I don't have. My post you quoted explains why I keep a small unspent reserve in my checking account (IOW why I don't spend money that I do have.) So what in the heck are you talking about?

[Saving in So Cal]

Re: How much cushion in checkbook?

The cushion should be at least what it takes to keep the checking account free. Beyond that, you might want to keep a cushion of whatever the daily ATM withdrawal limit is. That should you cover you for any instant emergencies. It seems like anything else could be applied toward debt or invested where you would earn more.

[amberfocus]

Re: How much cushion in checkbook?

I'm still working out how I'd like to run my checking account, but I was either thinking one month's worth of expenses ($800), or $200 (or somewhere in between). The $200 minimum is to make sure I can cover my $135 monthly auto-debit for my student loan repayment. I'd feel safer being one month ahead of expenses, though, just in case one of my direct deposit checks don't go through or something.

I think I'd be a little too stressed if I ran my checking account down to the wire.

~mimi

[LuxLiving]

Re: How much cushion in checkbook?

Right - to each his own. I'm just as anal about checking my account balances daily at my various bank facilities as some of the rest of us here, it's just that I like a fatter cushion. I'm fully aware that it costs me a small bit of interest every month. I can live with that. Everyone operates on a different level of comfort, so figure out what lets YOU feel comfortable and go with it.

[WellManicuredMan]

Re: How much cushion in checkbook?

I keep too much in my checking account that doesn't make any interest. I don't transfer money out of ED to pay the CC's. I just keep enough in my checking to pay the CC's. I've heard people talk about paying your CC directly from ED. Does this still work?

UPDATE
I just added my ED account to Citi Bank to pay my Citi Dividend Mastercard. But when I entered my ED ABA routing number and account number, Citi told me the name of the bank was: "DOLLAR DRY BACK BK" ... WTF? I copied and pasted the ABA number right from ED's site from within my account so I know I have the right number. Please tell me Citi is just screwed up. I would love this to work so I don't have to keep enough cushion in my checking account to pay my Credit Cards in full every month.

[Mathew Green]

Re: How much cushion in checkbook?

amounts that haven't cleared my bank aren't reflected in my available spending balance so that I won't be affected by "check not deposited yet or electronic payment, etc." if you get ganked because you spent money you were expecting but hadn't verified had been deposited or because you think it hadn't been withdrawn, you are "spending money you don't have, physically at that time" and therefore being inexact.

I don't do that. That's the whole point of the reserve. It covers all the payments that have been authorized in case the timing of deposits/withdrawals doesn't flow as expected. In no case am I spending money that isn't in the account.

You also have a very strange definition of 'inexact' imo. Spending money that isn't in your account yet is 'risky' or even 'irresponsible' but so long as you're keeping an accurate record of what is supposed to have come in and gone out, it isn't 'inexact'.

Far as spending money you don't have: If you have a mortgage, rent, or any other monthly commitment, you too are "spending money you don't have" because you've already agreed to pay someone part of a future paycheck that you haven't even earned yet. Kwim?