How much to keep in checking?

[Naples09]

I keep 8,000 extra in my checking account at the end of each month. Its part of my emergency fund. Any money over 8,000 gets transferred to savings or to a mutual fund account.

[kork13]

I keep $500 in my checking at a minimum, plus $200 in a linked savings account that covers free overdraft protection. However, I normally try to keep $1000 in checking just for good measure. If I end up with more than the $1k, I send the rest to my general savings.

[bdoubleu]

I'll be the outlier here. I keep a buffer of $3,000-4,000 in the checking account. When some big expense comes along like vacations, car repairs, etc, I want to be able to pay it without shuffling money around. Considering that even "high-yield" accounts are paying less than 1%, the amount of interest lost on that money isn't worth the hassle to me.

I will join you, DS. Our monthly expenses are ~$3,000 (~$5,000 when including automatic transfers to savings). I like to have at least $3,000 - up to $7-8,000 - in our checking account at any point in the month. We were at ~$2,000 a few days ago, which put me a little on edge but all our larger bills for the month have been paid and I knew payday was coming up, so we'd be sitting comfortably very soon (today!).

It has been nice to take a quick three-day-weekend trip or make moderate upgrades to the house and just use some of the buffer to pay for everything instead of moving money from savings.

It's just me and DH for now, so very few unexpected expenses. We both work full-time and get very predictable paychecks (and the unpredictable bonus now and then!).

[disneysteve]

We were at ~$2,000 a few days ago, which put me a little on edge

Isn't it funny how that works? When our balance drops below $3,000, I get a little edgy myself. It makes absolutely no sense as we have plenty of money - just not in that account at that moment. Still, that sets off a little alarm in my head and I find myself consciously watching my spending a bit more carefully until the next paycheck gets deposited.

[feh]

I get paid monthly, and our largest bill (CC) is at the end of the month, so we tend to have quite a bit in checking, on average. At the start of the month, there will be several thousand; by the end of the month, it may be under $1000. I try to not let the balance get below $500.

I realize I could keep most of that money in a savings account and then transfer it to checking as needed throughout the month to maximize interest, but I don't want to work that hard for a couple bucks.

[MonkeyMama]

Personally I keep $0 in my checking account.

I will amend my answer after reading replies. I forgot, but I do keep a $1000-ish buffer in a linked savings account (accessible immediately). Kind of more like an emergency fund that I have mostly never really had any need for? But, I do also use it as a holding account when a large/foreseeable bill is on the horizon.

Our expenses are pretty darn foreseeable (maybe because we charge everything? Which always gives us 1-2 months to pay off the balance by due date. Which means it is hard for me to imagine a case of unforeseen expenses).

With foreseeable things and a little planning ahead I just wanted to clarify there is no frequent moving money back and forth. I definitely like things simple. My trick is more to pay my bills ahead of time. This buys me a $4000-ish buffer at any given time. If I suddenly needed $4,000 today, I'd just pay my bills when they were due, instead of early. This is an extremely simple way to manage cash flow. This could be one reason I have never found the $1k buffer to be particularly useful or needed.

[humandraydel]

Let's see...

All the bills are paid for the month and my pay will post tonight so...$20.74. Just about right

Although I do have about $600 in a linked savings account that I can transfer over immediately if needed.

I'm basically the same way - I get paid on the 15th and 30th of every month and I have around $60 in my checking right now. Of course, about 95% of transactions are put onto a CC and paid off the next month.

[fruitbowlk]

No more than 100.00.

[snafu]

I've used and updated Quicken for many years and it's terrific for automatically updating all the figures across all the various types of accounts. I've paid for it..may as well use it, let it do it's job etc. I can run scenarios and avoid dumb [oops/forgot] mistakes. We're all at different stages in life and the only thing we can count on is is that life will throw us challenges.

While our savings a/c is linked to chequing and sums can transfer instantly with a computer click, we keep $ 1,000. float in chequing only because the bank gives a long list of free services that we use. Banks are now charging for nearly every type of transaction at the same time, interest in savings is negligible. Ask your bank what will reduce their charges to your a/c. We also keep $200. cash at home because we've seen circumstances where the bank & CC machines went down. The thousand dollar 'float' does double duty because it is technically part of our Emergency Fund in our financial plan/net worth.

[wikiwiki]

Thanks for the replies. I'm going to keep a $500 buffer in our savings acct that's linked to checking.

I've just upgraded to the Money 2008 trial - not sure what will happen after 60 days since they no longer support it - but my 2003 software was messed up. I might switch to Quicken 2011 but not sure yet... I don't want to download stuff from online, I like to enter it all in manually. So I don't need as much of the functionalities of the newer softwares.

[LivingAlmostLarge]

maybe $2-3k at least. I am lazy and my DH takes out cash when he feels like so a buffer is necessary. We aren't very detail oriented or perfect about tracking our spending. I have a general idea and most things set up but the CC bills vary and i just pay them on the 1st no matter what. It's a habit from being paid once a month so i usually work a month ahead.

[adpiterp]

Interesting question. I've wondered this myself. I keep about a $1k buffer in my checking account. I only use my checking account for day to day items, like bills, etc. I don't use a debit card (put everything on my credit card and pay it off at the end of the month). A bank teller once told me it was crazy I kept that much in my account because there was no interest. Yes, but over-drafting will cost me a lot more than that 1% interest!

[Gailete]

Buffer, whats a buffer? I run my checking down to $2 at times. I have found that having money in the checking account makes me think that I have money to spend. I HATE taking money out of savings so it is easier to keep the money there and transfer as needed. I do most of my banking through ING which makes transferring easy and quick and I balance my accounts weekly and double check balances quickly before heading out to the store. Part of this is brought on by low income in the first place. I haven't had a 'spare' $500 in years and years. Ever since I ended up on disablility it has been a fight to the finish to pay all bills on time and not run up more debt.

[Bluezy]

I keep as much as possible in the checking, however, there are times when it gets down to $100.00. Times are tight for many and if you are able to keep a percentage of your monthly bills as a buffer, you are lucky. One emergency can wipe it out.

[dontgopoor]

Only enough to pay the bills each month plus a 15% cushion.