Checking account money

Bjd2005 · April 2014

Hi all! I've been focusing on our budget lately and am wondering how much money should be left In our checking account at the end of the month. In other words, do you allocate every penny, or do you transfer left over money to your savings at the end of the month, or just leave it in your checking account? We budget to a degree, but also spend what we want/need in addition to automatic savings each week, and our checking account always has extra and we have just been letting it grow. I'm not sure what is the best MM way to approach the left over. Thanks for your input!

jtmh2012 · April 2014

I keep a $1000 buffer in our checking account. Everything else left over at the end of the money gets transferred out to various long term savings accounts and investments.

hoffse · April 2014

I probably should keep a buffer, but I don't. I get paid twice a month. I transfer my planned savings to the savings account/investments before I pay anything else. Then I watch our bank account relative to our expenditures through the rest of month. Whatever is leftover I send to student loans.

I tend to keep about a $30-$50 buffer in our checking account. I can get away with that because I watch it kind of obsessively, but that probably wouldn't work for most people.

jessica490 · April 2014

Everytime we get paid (bi-weekly) we leave a cushion of $200-$300 in our checking account for gas and anything else that may come up that we don't use our "fun money" for. If we have more than that amount after paying our bills, we will allocate that to our 3 savings accounts. Whatevers left from that $200-$300 when we get paid next, we will tranfer that to savings.

But yes, we always leave a buffer in there so we don't need to resort to credit cards if something comes up

Xstatic3333 · April 2014

I don't keep a buffer beyond $10-$20. On payday, money gets immediately transferred to debt or savings accounts except for "fun budget," gas and grocery budget, and any automatic debits. We budget to zero. Keeping a buffer wouldn't work for us-we'd spend it! We check it daily and rarely overdraft, but do have a linked savings just in case.

IAmSherlocked · April 2014

I leave maybe $300 in my checking account for just in cases, although I can transfer money between most of our accounts easily on my phone if I need to, so if something comes up I can pull some money from savings into checking. I check out accounts all the time so I know how much we have at any time. When I was single I didn't leave much of a buffer (mostly because I had no money, haha) but that didn't work well for DH (he only uses debit or cash) so now we leave a little bit in there. Although to be honest we've cut back on our spending so much I could probably get away with not having much in there.

I get paid twice a month, DH gets paid every Thursday. Each week I put money into our savings/retirement & earmark some money for bills for that month (I just use the average total of what our electrical/gas/water/etc.to get an idea of how much I need). Everything else is paid for as it comes up (groceries, gas, etc) and then any leftover money goes towards debt repayment.

emily1004 · April 2014

We like to keep a pad of $1000 in the joint account, sometimes it goes down a little but we do not let it go below $300 because we get charged. (This checking account has a little higher interest rate). I've never had a problem keeping $300 in it. The other checking accounts we always keep $500 in it. They rarely get used, but they are free to have. I was thinking of getting rid of them....another day another topic.

Everything left over after paying all the bills , goes into a separate savings account. Our E-fund is a separate account too. We haven't had to use it, but if we do it would be the first to be replenished.

One of my pet peeves is when I have to pay something every month. I wish I could just write one big check for the year, like I do for the IRA's and the insurance. But sometimes it can't be avoided like credit card payments and the mortgage. I'm good at saving in that regard. The reason for that is our paychecks are different every month, and sometimes it's a difference of several thousand dollars. We also have an very non-traditional budget.

Bjd2005 · April 2014

Thanks everyone for your responses! It has definitely opened my eyes to see we are not in the norm I guess. I keep very close tabs on our accounts, checking at least once a day. However, our "buffer" is quite big and while we save a good amount automatically each month, I still like to see our checking account grow too. Maybe we should just get into the habit of transferring "left over" to savings each month. For those of you who allocate for each dollar, how do you handle the non-regular expenses, ie birthday or wedding gifts, yearly insurance premiums, etc? Do you have a separate account for those things that you contribute to all year round?

SmrBrd2012 · April 2014

I'm not really in the norm either because we have a special checking account that actually makes more interest than any savings account out there right now. Therefore most of our money stays in checking.

lifeonthehill · April 2014

H would like to have $1000 in the checking at ALL times as a buffer but I would perfer $100.

We don't have issues spending money we don't have and have done well sticking to our budget so I don't see why we should keep so much of it there. Our Checking is linked to our E-Fund so god forbid we really needed money and we didn't have in checking we would just eat the $10 overdraft fee and use our card.

Xstatic3333 · April 2014

Bjd2005 said:
Thanks everyone for your responses! It has definitely opened my eyes to see we are not in the norm I guess. I keep very close tabs on our accounts, checking at least once a day. However, our "buffer" is quite big and while we save a good amount automatically each month, I still like to see our checking account grow too. Maybe we should just get into the habit of transferring "left over" to savings each month.

For those of you who allocate for each dollar, how do you handle the non-regular expenses, ie birthday or wedding gifts, yearly insurance premiums, etc? Do you have a separate account for those things that you contribute to all year round?

If something like a wedding, shower, or birthday is coming up I just budget for a gift when I do that month 's budget. Usually that just means less to our DP fund. We have car repair and short term savings funds that we contribute to each paycheck, and we use that for annual expenses and big car issues. We treat our emergency fund as for true, life and death emergencies only, and it is completely separate. I also have a separate account for my quarterly state taxes that I contribute to each paycheck.

KatieCutie05 · April 2014

You need a zero based budget - so all that "extra" money at the end of the month has a place to go so you can really make use of it. If you have debt you can put it toward that or something you want to save for, etc. But make use of it so you know exactly how much you have.

We do a different sero based budget every month... most things stay the same but we plan for whatever additional ammounts we need to spend during the upcoming month. Then we budget and track down to zero so whatever is remaining goes to debt or savings or whatever your goal is.

KatieCutie05 · April 2014

we do have a 500 "buffer" as well but thats just so i can buy gas/groceries the day before payday and not worry about the money being in the account.

jtmh2012 · April 2014

alyssa32713 said:

H would like to have $1000 in the checking at ALL times as a buffer but I would perfer $100.

We don't have issues spending money we don't have and have done well sticking to our budget so I don't see why we should keep so much of it there. Our Checking is linked to our E-Fund so god forbid we really needed money and we didn't have in checking we would just eat the $10 overdraft fee and use our card.

We keep $1000 in our checking account not to cover our spending, but since we work in computers we know how easy it is for them to mess things up. Our mortgage comes out of that account and we didn't want it bouncing due to something being double drafted from the account. Never had to use it fortunately, but I'd had friends pay bills online and had it taken out of their account twice, so it does happen.

brij2006 · April 2014

We have a $500 buffer in our checking just in case, but we balance/budget down to zero each month.

Xstatic3333 · April 2014

jtmh2012 said:

alyssa32713 said:

H would like to have $1000 in the checking at ALL times as a buffer but I would perfer $100.

We don't have issues spending money we don't have and have done well sticking to our budget so I don't see why we should keep so much of it there. Our Checking is linked to our E-Fund so god forbid we really needed money and we didn't have in checking we would just eat the $10 overdraft fee and use our card.

We keep $1000 in our checking account not to cover our spending, but since we work in computers we know how easy it is for them to mess things up. Our mortgage comes out of that account and we didn't want it bouncing due to something being double drafted from the account. Never had to use it fortunately, but I'd had friends pay bills online and had it taken out of their account twice, so it does happen.

That's such a good point-I may switch to that plan once we have a mortgage.

formerlyGDaisy09 · April 2014

since we pay for pretty much everything on credit cards (that all get paid off every month) we allocate everything in our checking account and transfer what's left at the end of the month to other places. we don't have a minimum balance (but get charged if we overdraw our account) so I keep close track of when things are coming out of there and make sure we have $20-30 in there in-case H decides to swing by the ATM. I only transfer out of the account on the last day of the month, I get paid on the first of the month so our balance is usually only lower than a a couple thousand dollars for a few hours.

Bjd2005 · April 2014

Thank you all for your help! I will definitely work our budget to $0. And congrats on the new house AprilH81!

ta78 · April 2014

We keep a $1000 buffer too, but budget monthly to 0. Right now I move anything leftover into general savings because it's usually not more than $100. Things like gifts that I haven't budgeted for then come out of that savings.

hoffse · April 2014

For our budget, we include savings as one category. I find that helpful because then we treat it like a bill that has to be paid, and I just take it off the top each month. It also lets us project our future savings so that we know how long it will take us to save for various goals (barring some unexpected 'oh crap' moment).

We've also gotten to where our "misc" category is large enough that it encompasses almost everything that's not your standard rent, utilities, gas, and groceries. If we have weddings or birthdays coming up, gifts come out of the misc. category. If we have annual membership dues (Costco, Amazon prime, etc.) those come out of misc. If we need clothes, that comes out of misc. Basically anything that we don't have to buy every single month and any purchase that can be delayed if necessary comes out of misc. Our budget for this is pretty generous. Some months we spend most of it (particularly around the holidays), but most months we do not.

We could be more detailed about it, but it made me feel like we were "cheating" when we "borrowed" money from one budget category to cover overages in another, even when our bottom line was the same as always.

We realized that the amount of money we spend on gifts, clothes, house items, etc. varies so much by season and by month that we finally decided to just pool all of it. It makes us feel like we have flexibility when those once-or-twice-a-year expenses pop up or when we want to buy something big. It also enables me to shop sales in a serious way - I might spend $400 on new work clothes when I run into a great sale. But then I won't buy work clothes for another 6-12 months.

It works well for us.

vlagrl29 · April 2014

we basically allocate every penny of our joint checking to bills and living expenses. When I make more money, I transfer the deposit from our checking into our savings.

Wulfgar · April 2014

As for the question about gifts, annual, semi-annual bills, MW and I have two different savings accounts. One we call House that is for house repairs, car repairs, annual, and semi-annual bills along with being our emergency fund.

We have another account that is called vacation (checking that is linked to a savings account) that covers vacations, gifts, special going out funds, etc. I am planning to pay for our children's education out of this account. When we have a decent amount of money in the checking we move it to savings.

AnAngelGoneInsane · April 2014

I think it should depend if you have a need to have a buffer if you should keep a larger amount in you checking. For example my grandmother lives in Germany and I live in the U.S.

If there was an emergency I need to be able to have access to enough cash to get a flight over there. ( I only have one low limit cc that is there to build credit) So I need that security to be able to make a purchase at any moment. On the other hand if I did not have family that far, or maybe another way to make a purchase that large very quickly, maybe I wouldn't have such a big buffer.

Edit*** typing is hard

HoneyBee973 · April 2014

We used to keep a $1000 buffer, but now its down to $300. I lowered our buffer when we started to pay for everything with rewards CC.

mana8503 · April 2014

Xstatic3333 said:

jtmh2012 said:

alyssa32713 said:

H would like to have $1000 in the checking at ALL times as a buffer but I would perfer $100.

We don't have issues spending money we don't have and have done well sticking to our budget so I don't see why we should keep so much of it there. Our Checking is linked to our E-Fund so god forbid we really needed money and we didn't have in checking we would just eat the $10 overdraft fee and use our card.
We keep $1000 in our checking account not to cover our spending, but since we work in computers we know how easy it is for them to mess things up. Our mortgage comes out of that account and we didn't want it bouncing due to something being double drafted from the account. Never had to use it fortunately, but I'd had friends pay bills online and had it taken out of their account twice, so it does happen.

That's such a good point-I may switch to that plan once we have a mortgage.

----

This is what we do, I like having what equals a mortgage payment as a buffer. H's income can be all over the place so I keep that in checking just in case. We get a small interest % on checking if it stays over 2k, so we do get some perk with that.

I usually calculate our buffer as how much is in there after mortgage is taken out at the first of the month.

sillygoosegirl · April 2014

I try to balance typical spending with the amount being deposited to checking (vs savings) each month. The amount of buffer this leaves us varies from month to month, since we don't actually spend the same amount each month.

When the amount leftover gets on the high side, we sometimes don't transfer from savings when we book a vacation or buy something we've been saving up for. When the amount leftover gets on the low side, we go and verify we haven't forgotten to transfer from savings for a vacation or something we saved up for (and normally do find one we forgot to transfer for).

CuriousKiddosMama · April 2014

Absolutely keep a buffer to make sure you don't accidentally bounce a check! It doesn't have to be a big buffer, but even $100 can save you from an accidental math error.

jtmh2012 · April 2014

Vikingsfan 71713 said:

Absolutely keep a buffer to make sure you don't accidentally bounce a check! It doesn't have to be a big buffer, but even $100 can save you from an accidental math error.

My idea was take the biggest bill that comes out of the account. Now pretend that it gets double pulled from your account. Do you still have enough for all the other bills to get paid?

Mom987 · April 2014

Our minimum is $1,000 in checking but we get paid every Friday (alternating bi-weekly checks). So we always use that minimum before saving or transferring away.

cbee817 · April 2014

jtmh2012 said:

I keep a $1000 buffer in our checking account. Everything else left over at the end of the money gets transferred out to various long term savings accounts and investments.

This- mostly in case we have a repair or something that doesn't accept credit cards. I like to have the buffer.

Checking account money

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