How much cash do you keep at any time on checking?

[cam240]

Hello community,

As the thread title states, how much cash to keep from month to month? Our checking account balance is always 3,500-5,500. My wife really freaks out if it falls below 3,500 and got me thinking I wonder how this compares to other people’s practice.

Some info to add context:

Age: 21-22
Roth: 11,500
Savings: 24,500
Income 105,000

Thanks,

[mega317]

About 2 months expenses. That way if I get busy and the mortgage, daycare, credit card and utility autopay cycle starts again I won't overdraw.

[livesoft]

We don't even have enough to pay our credit cards bills right now. Generally we might have $500 to $5,000 in checking depending on our spending plans for the next 2 weeks. I will sell shares of investments periodically and move the money to checking in order to pay bills.

[Raybo]

I pay bills through my bank account. The amount I keep in there depends on that month’s credit card bill.

Usually, about $3,000.

[IowaFarmWife]

I usually keep between $4500 and $7000. I use our checking account for short term savings (quarterly bills), etc. so there is usually a fair amount of money in there. I also try to keep about 1K buffer in there, too.

[Bacchus01]

$1000 at all times.

[Kenkat]

$5-7k

[mattshwink]

We have two accounts and the rule is to not let either of them fall below $5,500, though they usually have more (usually at $15,500 we do something with it - currently home improvements, but in another year or two will invest the extra into taxable). We count them as part of our emergency fund (slightly over 1 month spending, rest of emergency fund is in money market)

[Sheepdog]

My checking account, to keep free, must average at least $3000 on deposit. At any time the balance could be under $1.000 then a short time later it could be over $10,000 or more.

[WildCat48]

$250-300K, across two checking accounts.

[fortfun]

Just enough to pay the month's bills. With Ally, you can immediately transfer from savings to checking. That way you maximize your 1.45% interest in savings (added daily). The phone app just takes 2 clicks to transfer some money before the credit card bill is due, etc. have email/text message notices when account drops below 2k.

[sport]

I keep enough to pay the bills. At the end of the month I transfer anything over 1K to my Vanguard MM fund.

[3dream3]

We usually have about 5-6k in our joint checking to cover the mortgage and joint credit card. Otherwise, my wife usually has about $500 in her own checking and I keep about $1500 in mine to pay all the bills with. Most of our paycheck goes to our savings and if we end up spending more than usual... we just transfer money back to cover anything additional.

[luminous]

2 months of expenses plus a sum that grows through the year and is contributed to the Roth IRAs each January.

[runner3081]

In checking we keep about $200-$5,000. Just depends on the time of the month.

With Ally, our savings is a "fee free" backstop to checking, so it doesn't really matter if we go too low in checking.

[tesuzuki2002]

$250-300K, across two checking accounts.

That is a lot of cash. Retired? Saving up for a purchase?

[tesuzuki2002]

Hello community,

As the thread title states, how much cash to keep from month to month? Our checking account balance is always 3,500-5,500. My wife really freaks out if it falls below 3,500 and got me thinking I wonder how this compares to other people’s practice.

Some info to add context:

Age: 21-22
Roth: 11,500
Savings: 24,500
Income 105,000

Thanks,

50k. I have a rental home and looking to purchase another. Cash is great to have on hand. Mine earns around 3% so it doesn’t seem like a waste.

[WildCat48]

$250-300K, across two checking accounts.

That is a lot of cash. Retired? Saving up for a purchase?

Next estimated tax payments and two months of expenses.

[scrabbler1]

I keep at least $500 over the $1,500 minimum daily balance requirement to avoid monthly account fees. As an early retiree, I get "paid" monthly (for the most part) from a large dividend from a bond fund around the 2nd of each month. Some of my expenses are a bit lumpier," so I often need to carry forward surpluses from one month into the next one. Once these surpluses have been taking into account, I can move out of the checking account and into another investment account some of these excess cash holdings.

[eldinerocheapo]

from a min of $300 to a max of about $2k depending on the bills that need to be paid.

We keep as little as possible since a check was stolen years ago and forged to the tune of $4k, even though BOA knew we didn't have that kind of money in the bank, and did not have overdraft protection. The check should've been denied, but they paid it anyway! Using online bill pay, the funds leave almost as quickly as they are deposited to avoid theft and forgery in the future. I'll leave a small amount in for cash, but use the cc for almost everything else to get the cash rewards (about $700 cashback per year) Ole'!

[RRAAYY3]

Not much

Just monthly expenses + a small amount for if I ever need cash

[The Wizard]

I'm a retired single person who travels a fair amount.
So i try to keep "up to" $10k in checking after I pay CC balances and other bills the first of each month.
Excess beyond $10k goes into my taxable investment account.

As a practical matter, this means I have between $6 and $10k in checking at any given time...

[SRenaeP]

Not much. Whatever I need for the current month's expenses plus ~$200. However, my checking account is linked to a 'slush' savings account where I keep a few thousand. This is for unplanned expenses, etc.

-Steph

[NotWhoYouThink]

Minimum of $1000, seldom over $10K unless a big credit card bill is about to hit. Not carefully managed, paycheck and pension are enough to pay the bills unless we just booked a big trip or remodeled something.

[radiowave]

We pay most of our bills by cc so checking account can vary widely. We try to keep minimum amount in checking, sometimes a few hundred and when a cc eBill is due, transfer it just before it's paid. This minimizes the amount in checking that is exposed in case of fraud. Also keep a separate checking account for debit card, just a couple hundred for ATM cash needs. Never use debit card for purchases however.

[mbasherp]

I treat 1k as zero. If I were to make a small math error, I'm safe. Everything else is kept somewhere that it can grow in some way.

[bgf]

when we get paid on the last day of the month, i pay off the credit cards, make the mortgage payment, anticipate the bills that are drawn directly from checking, and then make my contributions such that i leave ~$500 in checking.

then we get paid again, and the cycle repeats itself.

before i moved my savings account to capital one, it was linked to checking. there was absolutely no risk of overdrawing checking in that situation. now, if anything ever happened (not sure what), id just electronically transfer from capitalone savings to our checking account.

i don't see any reason to keep much money in checking. its purpose is purely transactional.

[westrichj312]

I keep 50K on hand I figure it cost me about 280 bucks lost per year of MM interest but I like to have cash available when needed.

[mortfree]

$25.00 in checking




.

[jebmke]

I keep 50K on hand I figure it cost me about 280 bucks lost per year of MM interest but I like to have cash available when needed.

I used to keep some cash in the bank but I have found that within two business days I can convert a bond fund to MM and transfer it to my bank. They have apparently upped their game in the ACH transfer processes. It used to be that ACH batch runs would occur once a day. They must be doing them multiple times a day. I can't remember the last time an ACH transfer took more than one business day.

[roadhouse]

My checking account earns 3% interest on balances up to $20k without jumping through too many hoops so I keep about that much in there.

[Alexa9]

I rarely write checks and just pay my CC's off each month so it's not like I balance a checkbook.
Six months spending is in a savings account (rates are getting a little better) with about 2 months spending in checking.

[staythecourse]

Great question. I keep 1 month of expenses. I like the above answer though of 2 months so a mistiming of bills don't drain the balance.

Good luck.

[Glockenspiel]

We keep about $35-$40k in checking, but it essentially serves as our emergency fund as well. I'm not sure what else to do with it. I've considered an online high interest savings account, but isn't it cumbersome to transfer money from that to your checking account? I need to do something with it, just haven't made it a priority.

[TeamArgo]

I keep about one to two month's worth of money in the account. I replenish it when it gets below $1000 or if I am approaching a credit card bill that can't be covered by the cash on hand. This technique has me making deposits about 8 times a year, and works well with my 401K plan that allows 12 withdrawals a year.

[scrabbler1]

We keep about $35-$40k in checking, but it essentially serves as our emergency fund as well. I'm not sure what else to do with it. I've considered an online high interest savings account, but isn't it cumbersome to transfer money from that to your checking account? I need to do something with it, just haven't made it a priority.

Besides the $500 extra I keep in my checking account, I keep another $40k in an intermediate-term muni bond fund as a second-tier emergency fund. In addition to being able to move money from there to my regular checking account via ACH, it has checkwriting privileges which makes the money more accessible. Its main purpose is to cover any larger, unforeseen expenses which the checking account's $500 cushion can't cover. I rarely have to access this money, so it earns about 2-2.5% annually, mostly tax-free. I hate having a large blob of money somewhere earning zilch or nearly zilch. This bond fund's value can fluctuate, but not a lot, so I am not worried about selling at a loss because it earns about $90 per month in mostly tax-free interest.

[dwickenh]

I keep 30,000 in my rewards checking account. I get 1.95% interest on up to 30,000 as long as I use my debit card 10 times per month. Easy to get the 10 debits in the first 5-10 days of the month, then I use my 2% cash back Paypal M-card for all other purchases and bills. I consider it as a short term investment that pays a great interest rate. I replenish it with monthly pension and taxable account withdrawal. Currently, the checking account is doing better than my short term bond fund in my taxable account. Things will change in the future and bond funds will make up for the capital losses with increases interest rates.

[whoever]

50k in checking. Rest in high yield savings and CDs.

[retire57]

One month of expenses ~ 2,000 - 2,500.

[Grt2bOutdoors]

One months bills. That way I am assured nothing bounces without having to move monies/paycheck hits account.

[Grt2bOutdoors]

50k in checking. Rest in high yield savings and CDs.

I hope you are earning some sort of high interest on that.

[LiterallyIronic]

It's not allowed to drop below $6,000, because that's our emergency fund. Our expenses come out of there, so it usually fluctuates between $6,000 and $7,000.

[jehovasfitness]

I keep 30,000 in my rewards checking account. I get 1.95% interest on up to 30,000 as long as I use my debit card 10 times per month. Easy to get the 10 debits in the first 5-10 days of the month, then I use my 2% cash back Paypal M-card for all other purchases and bills. I consider it as a short term investment that pays a great interest rate. I replenish it with monthly pension and taxable account withdrawal. Currently, the checking account is doing better than my short term bond fund in my taxable account. Things will change in the future and bond funds will make up for the capital losses with increases interest rates.

Where are you getting 1.95?

[destinationnc]

At least $500 in checking, but linked to a $1,000 savings account if needed. If more is needed I just transfer from a money market account.

[Sandtrap]

Hello community,

As the thread title states, how much cash to keep from month to month? Our checking account balance is always 3,500-5,500. My wife really freaks out if it falls below 3,500 and got me thinking I wonder how this compares to other people’s practice.

Some info to add context:

Age: 21-22
Roth: 11,500
Savings: 24,500
Income 105,000

Thanks,

50k. I have a rental home and looking to purchase another. Cash is great to have on hand. Mine earns around 3% so it doesn’t seem like a waste.

How did you find a checking account with 3%. . . ???

aloha,
j

[MOBugeater]

We have two checking accounts. The first one is for all the budget items such as house payment, property taxes, utilities, life insurance Etc. Getting paid every two weeks I deposit 1/26 of the budget amount for each item into that account (tracked by Excel but I have this setup to do automatically). That account usually has between $7000 and $11,000 give or take depending on where I'm at in the billing cycle.

The other checking account I put every two weeks about $1,000 for gas groceries entertainment and other smaller discretionary items. We spend that down to zero each two weeks and do not track those expenses. If the account is nearing zero we just hold off spending that until next payday. If it's something I felt needed tracking I would handle that in the other account.

[chevca]

We keep $15k in our checking account. It's the EF and pays 2% on up to $15k as long as we meet the monthly reqs... 12 debit transactions, check online banking at least once, and e-statements. Our paychecks get directed deposited there also, so it goes over 15k ,we pay bills out of that, and left overs go to savings or investments.

[jebmke]

but isn't it cumbersome to transfer money from that to your checking account?

One click. <=24 hours later it lands in my checking account.

[AllieTB1323]

We use cash back credit cards for almost all our purchases and have the accounts on autopay so we keep the monthly total cc balance plus an extra 3K as a buffer.

[markcoop]

I used to keep very little (under 1K) and used overdraft protection with my HELOC. That worked fines when rates were lower and the interest on the HELOC was being deducted on my taxes. So at times I may have had a couple thousand on my HELOC but I would pay it off next pay check. Starting this year, I decided to not really use the HELOC in this manner as I will no longer be deducting interest and interest rates have been rising. So I am trying to find a sweet spot where I have no worries. I am leaning towards $10K.