Checking Account

SALTLIFE254638 · June 2015

Hi Eveyone, its ,me again with another ? How much money do you all keep in your checking account. I have tried so many different things and its not working out. At first, I allocated every dime of our paychecks and literally had 1.00 left in checking. I then would find myself needing gas a few days before payday with no $ in the account. Im also afraid that if we keep too much money in the account that we would spend it on eating out, clothes, etc.. HELP PLEASE! What does MM do?

hoffse · June 2015

I keep a $2,000 buffer in our checking account, because it will cover our largest student loan payment. The big student loan payment is the last day of the month and is on autodraft. That way I don't have to worry about those random months when both H and I get paid on the last day and our paychecks haven't cleared before the student loan payment is due. It's saved me a couple of times.

I never spend the $2,000 (it's actually a portion of our e-fund), and I just mentally subtract it every time I'm looking at our bank account to see how much money we have left to spend that month. If you did something like that, would you still be tempted to spend it? I'm honestly not tempted to spend ours, because I don't really even see it as being "real" money for us - it's just to buffer our cash flow.

H and I buffer our smaller expenses by using credit cards. We find they help us a lot with cash flow, but of course you have to stay on top of them so that you don't overspend. The credit cards are also crucial for us to handle reimbursable expenses. We typically have between $300-$600 reimbursed expenses per month, and our reimbursements only come twice a month. The cards help us float those expenses until the reimbursements are deposited.

abrewer5 · June 2015

I budget my personal checking to $0 every paycheck (well actually $60-65 to cover gas). It works well for me because I take my allowance out in cash and all my other bills/savings come out. Then I know I have $60-65 left to spend on gas only. This works for me because I know it costs me roughly $30 to fill up and I fill up once a week. If a real emergency were to come up and I had to travel more and blew my gas budget I'd probably take from savings or use my credit card and then pay off it when I got paid next, but this is extremely rare for me.

You may want to add in a $100-200 buffer in your checking that you earmark only for these instances and do not spend on eating out, clothes, etc. You could also try taking out an allowance in cash each month to cover stuff like eating out, clothes, etc. that way you get in the habit of not using your debit card for those things and then you won't touch your buffer unless absolutely necessary.

I have a buffer in my joint checking where all my autopayments come out of of roughly $100. I also have a auto draft from my savings set up just in case. The mortgage comes out of this account so I'm extra careful.

It's different for everyone, you just have to find what works for you!

ETA: If you find this is happening every month I would recommend taking another look at your budget and see where it's not adding up then make adjustments accordingly. Also, do not use a CC for gas unless you know you'll pay it in full without interest.

noffgurl · June 2015

We set up a system that has been working really well for us. We have 3 checking accounts and 2 savings accounts. 2 of the checking accounts are considered personal/individual. The third is a joint account. When we get paid, a certain amount is deposited into the joint and the rest into individual. The joint is for our real bills (water, trash, electric, truck payment, etc.) and the individuals are food (since we eat separately for the most part), gas (again, we are pretty separate on this), anything we want really. In the joint, I have quite a bit more money deposited than our bills to put into our emergency fund and our other savings (non- regular or largish things). I let that extra money build up in the joint until the end of the month, then I will move the money to whatever savings account leaving $50 in the joint to build up again at the next month.

Xstatic3333 · June 2015

I also budget to $0. If I kept a buffer I would find it really tough not to spend it. I do have a linked savings account I can pull from quickly in an emergency, and I only use auto draft with companies that require me to.

jessica490 · June 2015

We basically do a Zero-based budget for every paycheck but we leave a buffer of $250 or so in there for gas, dinners out, or any other small purchase that comes ups, but that's also on top of fun money that we give ourselves on payday. If I end up going to a store and buy clothes or other expensive items, those go on a credit card.

formerlyGDaisy09 · June 2015

we budget to zero. we keep our checking ledger in a shared document....the rule is to check the ledger and make sure that any transactions don't make the balance go negative before proceeding. we pay for most things on credit cards, so most transactions from the checking account are predictable and planned well in advance.

als1982 · June 2015

We only keep a buffer of $150.

FirstMate06 · June 2015

We keep a buffer of $2000 in our checking account to cover our rent and major bills just in case I forget to pay any of them before the autopay kicks in.

Mustard76 · June 2015

We budget to $0, but we use our credit card for almost everything. Our utilities and my student loan are the only things that we pay out of checking, in addition to the credit card bill. On payday, we move money to various savings, pay the things that are due, and pay the rest to the credit card. I generally keep $100 in our account, just so we don't have to pull from savings if we need cash. But if we don't use that money, it gets transferred out the following payday.

AprilZ81 · June 2015

We do a few things to help with cash flow.

1) We have a budget and STICK to it.

2) We keep a $2,000 buffer in our account because of different timing of paychecks and different due dates of bills.

3) We pull every expense possible onto a credit card and then pay it off every month.

brij2006 · June 2015

We have a $500 buffer in our checking, but I do not include it when reconciling our account. We do a zero based budget and budget/spend down to $0 each month, but our account never gets below that $500.

simplyelise · June 2015

I get paid every 2 weeks and that paycheck goes almost entirely to debt payments.

DH gets paid on the 15th and 30th, but in May we used my 3rd paycheck to move H's paycheck from 15/30 to 1/15. So now, his last May paycheck is actually what we consider his first June paycheck. We also used the 3rd paycheck to give us a buffer of about $900 which would cover our rent and the cash we take out for groceries at the beginning of the month.

I think You Need A Budget actually has as one of their rules: budget on last months income. They want you to get to a point where if you made 3000 in may, you use that 3000 to budget ever dollar to be allocated in June. Then you use the June income for July expenses. I don't think we'll ever get to that point, but with one paycheck buffer, it's really helped our cashflow crunch.

lifeonthehill · June 2015

We budget to 0 but keep a $100 buffer in the checking

vlagrl29 · June 2015

We budget to 0 as well

short+sassy · June 2015

I'm a cash person and really don't keep much in my checking accounts. I also don't really use them. Though I do have a $100-$200 buffer in each one. One of them does require a $100 balance to keep the account free.

Wulfgar · June 2015

MW has $100 cushion in her checking account. I have a few hundred cushion in my checking account. We also have a joint checking account that I don't let get below $100. We don't do zero budgeting that a lot of others do. What MW and I both do is "prepay" our bills by taking them out of the paycheck prior to the bills being due and it comes off our "ledgers". Unless my bank accounts look really off, I just go by my excel ledgers for the accounts that I track. MW and I do both budget in our gas money and other misc. spending each month.

bmo88 · June 2015

My husband keeps a $1,000 cushion, while I carefully track my expenses and usually go down to $100 in my account after all bills are paid.

MommyLiberty5013 · June 2015

I think you understand the concept of budgeting. Where you're running in to trouble isn't in budgeting. Your issue is that you are making the money too easy to access with your debit card. This is why while your budgeting intentions are there, you have $0 left before the end of the month.

It honestly sounds like more of a money spending self-control issue (no judging, though we all have issues with that here to certain extents here in MM ;o) ).

So, what can you do to make using the DC and running down your checking account harder???

It's a bit tedious, but why not use an old fashioned transaction register from your bank? It's that paper booklet that comes in checkbooks with all the horizontal lines. If you write in each purchase and subtract from your overall balance, you will visually see the money leaving your account. It will make spending that money harder. Because are you really ready to part ways with it?

I think some posters here also use and have benefitted from a cash only envelope method.

cbee817 · June 2015

Try to keep a $1,000 cushion in both checking accounts, but it's gone as low as $3 for one day (thankfully got paid the next day).

jtmh2012 · June 2015

We keep a $1000 buffer in the checking account to cover bank errors. We haven't ever personally had any, but I know people who have. We do not use debit cards at all except in rare occassions to pull money from our bank's atm just to have cash on hand. So the only thing we have coming out of the account are bills (including the credit card payments) and transfers to savings accounts.

short+sassy · June 2015

MommyLiberty5013 said:

I think you understand the concept of budgeting. Where you're running in to trouble isn't in budgeting. Your issue is that you are making the money too easy to access with your debit card. This is why while your budgeting intentions are there, you have $0 left before the end of the month.
It honestly sounds like more of a money spending self-control issue (no judging, though we all have issues with that here to certain extents here in MM ;o) ).
So, what can you do to make using the DC and running down your checking account harder???
It's a bit tedious, but why not use an old fashioned transaction register from your bank? It's that paper booklet that comes in checkbooks with all the horizontal lines. If you write in each purchase and subtract from your overall balance, you will visually see the money leaving your account. It will make spending that money harder. Because are you really ready to part ways with it?
I think some posters here also use and have benefitted from a cash only envelope method.

@MommyLiberty5013, loving that you felt the need to explain what a transaction register is . I'm old enough to remember the days when ATM cards existed, but debit cards didn't. And online bill pay? What? True, though, it's been a long time since I even had checks for my accounts.

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