How much do you having as a 'cash buffer'?

[MonkeyMama]

What level of cash do you consider it to be worth the time to look for a better rate?

1% on $10,000 is only $8 a month...

And?... Why wouldn't you want that $8 per month?

To be fair, my checking account habits were established during much higher interest rates. But, my general philosophy is "every dollar working for me". So if I don't need the money to pay bills due within the month, it immediately gets transferred to investments and higher interest savings. To me, $1 is worth looking for a better rate.

[KTP]

And?... Why wouldn't you want that $8 per month?

To be fair, my checking account habits were established during much higher interest rates. But, my general philosophy is "every dollar working for me". So if I don't need the money to pay bills due within the month, it immediately gets transferred to investments and higher interest savings. To me, $1 is worth looking for a better rate.

Hmmm, well, one overdraft fee is what, $35? So that is over 4 months of 1% interest on $10,000.

I think as a bare minimum I would want 1x expected monthly expenses in checking.

[feh]

Hmmm, well, one overdraft fee is what, $35? So that is over 4 months of 1% interest on $10,000.

I think as a bare minimum I would want 1x expected monthly expenses in checking.

I get paid on the 1st of the month, and my entire check is deposited to checking. I know approximately what my total bills will be for the month (most of which is the CC bill, 'cuz we use that for everything).

I transfer the surplus (paycheck - expenses) to our EF or investment accounts. Then checking simply get spent down over the course of the month.

[MonkeyMama]

Hmmm, well, one overdraft fee is what, $35? So that is over 4 months of 1% interest on $10,000.

I think as a bare minimum I would want 1x expected monthly expenses in checking.

If that's what you need to do personally, then that is what you need to do.

My CU only charges $3 for overdrafts, and my error rate seems to be about once a decade. Just to be clear I Am not advocating for the risk of overdraft fees. Quite the contrary - I try to never pay any bank fees.

[KTP]

If that's what you need to do personally, then that is what you need to do.

My CU only charges $3 for overdrafts, and my error rate seems to be about once a decade. Just to be clear I Am not advocating for the risk of overdraft fees. Quite the contrary - I try to never pay any bank fees.

I guess every place has it's perks. $3 for an overdraft fee is awesome. I get 100 free trades a year in my Wells Fargo account (linked with checking balance) which is worth $400 to $1000 a year.

[TheKayla]

If that's what you need to do personally, then that is what you need to do.

My CU only charges $3 for overdrafts, and my error rate seems to be about once a decade. Just to be clear I Am not advocating for the risk of overdraft fees. Quite the contrary - I try to never pay any bank fees.

$3 is really nice for an overdraft fee. Mine are $12.50 for anything under $50 and $35 for anything over that. I used to have such a problem with overdrafting, even though I was trying my best not to spend too much and live within my means. I think my budget broke half the time only because of overdraft fees. Perhaps that's why I feel more comfortable with a larger buffer now, I like the idea of less maintenance and counting, and just going off of good spending habits to not overdraft. Counting every last penny and counting on when it will go through is so tedious!

It's nice to have a budget for things and stick with them most of the time. If you have a bad week though, you'll have it covered -- it so nice!

[Petunia 100]

After I have paid all bills for the month, I like to sweep anything over $500 into savings, or towards debt. I don't always have $500 left, so it doesn't always happen.

I also keep a $500 savings account linked to my checking account, so it is immediately accessible.

I last paid an overdraft fee in the late 1980s.

Edit: No, that is not true! Earlier this year, I accidentally paid my mortgage twice and it resulted in an overdraft fee. They transferred the extra mortgage payment back, but I had to pay the overdraft fee. I believe it was $12.50.

[Caoineag]

I prefer 1x the expected expenses. Pay is variable and doesn't always coincide when the bills are due. Purely a cash flow issue. I have had the majority of my first of month bills come due prior to my first paycheck of the month and while I could transfer money back and forth, I prefer the simplicity of not having to do multiple money transfers in a week.

[Blessed]

$18,000 but only because of rewards checking. They pay 2.85 percent on up to $18,000. I pretend it isn't even there and transfer the interest out of that account monthly. If it were not for the interest rate I would keep a buffer of one months expenses like we used too.

[terry0317]

i perfer around 2000 because car repair is expensive

[amarowsky]

I'm right in the middle I suppose. Float between 2-3k in checking. right now I have an unusually High amount in my savings @ $4000. It seems to usually float around the mied 2000's. But I guess thats because I quit smoking several months ago and did some other things to cut my monthly expenses. I'm wondering what I should do w/ the difference... I could use a new fridge (that would also save me money monthly down the line by switching to High efficiency) .

[J.Apple902]

$5k

I think lots of people overdo their emergency fund. If you are single w no kids, in good health (with insurance), and no mortgage like myself, you really have little to worry about. Car repair? Sure gotta be ready for that.

But if you have family or friends that would help you out in times of need, I don't see the purpose of doing anything over 6months EF; you can probably get away with 3 month. $5k represents a normal 3-4 month budget or a 6 month super frugal one. By friends and family I mean providing you a roof for a little while you figure things out.

[asdf]

$5k

I think lots of people overdo their emergency fund. If you are single w no kids, in good health (with insurance), and no mortgage like myself, you really have little to worry about. Car repair? Sure gotta be ready for that.

But if you have family or friends that would help you out in times of need, I don't see the purpose of doing anything over 6months EF; you can probably get away with 3 month. $5k represents a normal 3-4 month budget or a 6 month super frugal one. By friends and family I mean providing you a roof for a little while you figure things out.

I think that if you're single--or at least living alone--you need to have a higher EF than those that aren't. If you lose your job, you don't have another form of income to buffer that loss. This is one reason why I feel that it's a good idea for singles to live with other people. In high COLA areas, it's often necessary.

[TheKayla]

I think that if you're single--or at least living alone--you need to have a higher EF than those that aren't. If you lose your job, you don't have another form of income to buffer that loss. This is one reason why I feel that it's a good idea for singles to live with other people. In high COLA areas, it's often necessary.

There's probably a ton of other considerations too. For example, if the worst should happen and I depleted a few-months long e-fund, I'd probably just move back in with my parents to get back on my feet. I would have that opportunity. Before that though, I also freelance so I'd have some extra income coming in anyway that would more than likely not stop if I lost my job. I also have no kids and am not married, and live very cheap, besides debt repayment.

About 5k would be plenty for me at my current stage in life, in fact I'm trying to get up to about 6k total as a goal until anything else major changes. That's a very generous 3-months of savings, with entertainment, unexpected expenses, and the unneeded extra debt payments I already apply monthly tacked on. I could easily stretch it out to 6 months if needed, depending on the situation.

I have a great situation in that regard, but I can definitely see that point where if you're single and lose your income, that's all you've got besides basically taking charity from loved ones. (Although I suppose, same situation but with a spouse in the other scenario.) It's really just a difference in who you'd have to rely on if your funds were depleted, and how many other resources you have.

[ProjectDebtRelief]

I like a buffer of at least 1K but that fluctuates a bit. For the most part it is the same money since we never touch it but it is accessible to tap into in the event of an emergency in the middle of the night (hopefully that never happens).

I think your buffer fluctuates depending on your finances and your responsibilities. It can vary widely over the course of your life.