How often do you replenish cash in checking?

[TromboneAl]

I set up a payment for the due date (and not before)

Do you do that just for the float? I used to do that but decided it wasn't worth the extra hassle and risk of an error. Now, I just pay the bills as soon as I get them.

 

[JakeBrake]

Do you do that just for the float? I used to do that but decided it wasn't worth the extra hassle and risk of an error. Now, I just pay the bills as soon as I get them.

Paying the bill on the due date reduces the amount of money required to satisfy my rolling 30 day average of bills payable. At least for a particular 30 day period. Of course, it will average out in the long run. This is especially helpful if a large credit card bill is due.

It's no more trouble this way. I set up the payment in my bank's online paymemt service to pay on the due date and I'm through with it. My bank's online payment service allows me to input payments up to a year in advance. For example, my garbage collection bill is paid quarterly. the bill arrives at the first of the quarter and is due on the last day of the quarter. So, I have already set up my quarterly garbage collection bill to arrive at the biller's address on Sept. 30, 2011.

"Float" is a thing of the past.

 

[TromboneAl]

I like paying ahead of time because if something goes wrong there's time to fix it.

 

[OldGuy]

I keep enough money in my local bank checking account to pay all bills for 30 days.

When the bills arrive online or USPS, I set up a payment for the due date (and not before) with my bank's online bill payment service. I have no automatic recurring payments or automatic debits from my checking account. I've had bad experiences with those and my way, I'm forced to look at every bill as it comes in. I pay most daily expenses with credit cards.

I'm with JakeBrake on this one. We pay (almost) everything with one of two preferred credit cards. One or two vendors (both utilities) either won't take credit card payments or have the cojones to charge me a fee to pay them by CC, but they're the outliers. When bills show up - mostly electronically these days - I set up its payment on our primary bank's bill payment system, with a due date one day prior to the scheduled due date (okay, it's picky, but the payment's there a day early). Once input, we're done.
We have no automated payments at all. I worked for one of the largest ACH banks for too many years, and they still get it wrong more often than I do, so I trust myself to set up payments each month. If there is a problem (usually because I input things wrong), I can change the online payment until the day before it's due.
I electronically fund the checking account whenever needed from our MMA. We run a negative ledger balance most of the month in the DDA, since the largest bills are the credit card bills. We usually fund the DDA just before those two bills are paid. Interest rates are too low to be a factor, and float hasn't really added value in a decade. But I still don't fund the DDA until necessary; old cash mgmt habits...

 

[easysurfer]

I use Vanguard Prime the same way. Since it pays very little interest, and since my bank savings account doesn't pay much either, I just move the year's spending money (equal to the previous year's dividends, in my case) from Vanguard Prime to my bank savings account in early January.

Then, like you, I transfer an amount (1/12th of that January withdrawal, in my case) each month to my interest bearing checking account (also with very low interest) to simulate a paycheck.

I don't withdraw any more from Vanguard at all for the rest of the year, for any reason.

Disadvantages:
1) I essentially get no interest on any of my cash, so I can see room for improvement there;
2) My interest bearing checking account is pretty big by this time of year because I haven't been spending it all. At the end of the year, I'll move the excess to savings and withdraw that much less in January 2012.

Advantages: (mostly psychological!)
1) There is no way to make a mistake and withdraw too much. I determine how much on the 1st of January, withdraw it, and then Vanguard is closed!
2) It is extremely clear to me exactly how much I have left for the rest of the year.
3) It is also pretty simple to see how my investments are doing during the year, without having to consider money that was withdrawn.

Edited to add, after reading Johnnie36's post below: This is only how I handle my Vanguard taxable investment withdrawal. I also get a (very tiny) pension check on the 1st of the month, and I get a regular check from my TSP (=401K) account on the 22nd of the month. My withdrawal method for the TSP is the "equal monthly payment" method and it is the only way I can withdraw, now that I have elected this method. It is done automatically for me, and I can change the amount once a year if I want to.

Also, one other advantage is that by having a fixed amount transfered each month makes it easier from a budgeting standpoint as opposed to say, if I only used income distributions in which the amounts aren't exact each month.

 

[W2R]

Also, one other advantage is that by having a fixed amount transfered each month makes it easier from a budgeting standpoint as opposed to say, if I only used income distributions in which the amounts aren't exact each month.

Good point. I like the steady predictability of allowable spending money throughout the entire year that this method gives me.

 

[kumquat]

The "bond component" of our AA is in CDs or a HISA. The HISA currently contains ~7 years expenses so when the chequing account gets below about $5K we move some in from HISA. Interest rates are so low that we don't really care about too many $ in chequing.

I did become a bit of a DMT by buying a bunch of XIU.TO and XDV.TO today since the drop in the TSX for the last week was just to tempting. Our cash is down to 5 years now.

 

[chinaco]

It would seem that one would want to balance between:

1. Convenience
2. Risk of insufficient funds
3. Reasonable return on cash (if large amounts are tied up)

The options are manual or automatic.

Most mutual fund companies will do automatic periodic fund transfers.


If my transfers were manual, I would not want to do it monthly... I would move a larger amount, maybe a years worth of money to the bank and park it in something that would accrue a decent amount of interest.


I am leaning toward doing the transfer manually and setting up a series of maturing CDs (at the bank) to keep the near term (year +) money in an FDIC covered account. I need to find out if I can have the CDs deposited into checking automatically when they mature (for convenience). Plus, the amount we need from the portfolio will change over the next several years as various guaranteed income begins... So I will need to make adjustments.

 

[rescueme]

Also, one other advantage is that by having a fixed amount transfered each month makes it easier from a budgeting standpoint as opposed to say, if I only used income distributions in which the amounts aren't exact each month.

That's not a problem, IMHO.

For instance, I have distributions go to either my FIDO or VG tax-deferred MM account, depending on the fund paying a distribution.

My monthly transfer to my (non-interesting bearing) checking account (from FIDO, at this time), used to pay monthly bills, remains the same. Distributions do not change that auto-transfer...

Additionally, since I don't transfer more than once per month, the money stays in the FIDO/VG MM accounts, making a few pennies interest each month; something the C.U. (no fee, no interest) checking account does not.

 

[donheff]

I'm curious how many people make extensive use of direct EFT payments from their banks to pay bills? I set automated electronic checks for bills that have regular amounts and EFT direct from the bank to pay credit card bills where I might get a penalty if I am late. Where I can automate a payment using a CC I do that to get points (as long as there are not charges for doing so). I am leery of setting up direct EFT for everybody under the sun since I worry something would go wrong or some outfit go rogue and empty my account. Doing it with credit cards doesn't bother me since they have a dispute process. Am I too paranoid about EFT?

 

[rescueme]

Am I too paranoid about EFT?

Yes ...

But you must do what makes sense for you, in your situation, and meets your comfort level.

As for me? Any bill that can be paid with an ETF against my checking account (for me, electric, water, etc - IOW, utilities) get paid in that manner. I would have them charge my CC (for points), but they charge extra for that option.

Other bills (such as Dish TV, insurance, telephone/DSL service, etc.) that can be put on my CC, I do so in that manner, and then pay the bill from my checking via ETF.

The only checks I now write is for R.E. taxes or some odd situation (such as my dentist, who gives me a "senior discount" for cash). Other than that, I use ETF's and direct debits as much as I can.

I started doing this upon my retirement (a bit over four years ago) when I lost the ability to drop off my payments in the "company mail". I'm on a motor route for mail (e.g. mailbox) and I won't leave outgoing mail in that box due to the possibility of "check washing" http://en.wikipedia.org/wiki/Check_washing (that's my fear, over ETF's) along with my account number (on my checks) being used by somebody just "driving by". That, and the reduction in costs of mailing (envelope, stamp) drove me to the "electronic payments system".

Anyway, that's my situation...

 

[Danmar]

Two bank accounts: savings paying around 1.25% and chequing paying almost nothing. so keep about 1-2years of expenses in savings and about 10-20k in chequing. Put almost all expenses on credit cards so once a month there is the big CC payment to all cards. Do this electronically and balance all my cash and expense spread sheets at the same time. Dividends transtered into savings and from there into checking as needed. Generally tranfer once per month from savings to chequing but if something comes up can do this whenever needed. We log into all our accounts( including investments) every day. All accounts held with same institution so everything moves around seamlessly and all assets show on the same page. Works pretty well I think.

 

[Nords]

I'm curious how many people make extensive use of direct EFT payments from their banks to pay bills? I set automated electronic checks for bills that have regular amounts and EFT direct from the bank to pay credit card bills where I might get a penalty if I am late. Where I can automate a payment using a CC I do that to get points (as long as there are not charges for doing so). I am leery of setting up direct EFT for everybody under the sun since I worry something would go wrong or some outfit go rogue and empty my account. Doing it with credit cards doesn't bother me since they have a dispute process. Am I too paranoid about EFT?

Doing it with credit cards bothers me because the account numbers keep changing ("We have learned that some credit information from your account may have been compromised"), which means I have to go re-do all the accounts that were paid from that card.

The EFT financial institution also has a dispute-resolution process, although admittedly it's not as powerful as a chargeback.

I think the best compromise is an EFT (or ACH or whatever they're calling it) with the billing company telling me ahead of time. Even on the landline phone bill and the cable bill I get an e-mail a couple weeks ahead of the transfer alerting me to when/how much.

These days the only bills where I have to "do something" are our water/sewer utility (which for some unknown reason bills every other month) and our three credit cards. Everything else is EFTs, and there hasn't been a problem in over a decade.

 

[nwsteve]

That's not a problem, IMHO.

For instance, I have distributions go to either my FIDO or VG tax-deferred MM account, depending on the fund paying a distribution.

My monthly transfer to my (non-interesting bearing) checking account (from FIDO, at this time), used to pay monthly bills, remains the same. Distributions do not change that auto-transfer...

Additionally, since I don't transfer more than once per month, the money stays in the FIDO/VG MM accounts, making a few pennies interest each month; something the C.U. (no fee, no interest) checking account does not.

We use a similar process but save a step by using Fido's "Bill Pay" feature. I have been using it for a number of years without problems. Actually it has more flexiblity that our communit bank's bill pay offering.
On occasion, when we need to run a larger than usual check from local bank, we overnight transfer funds from Fido to the checking account. We probably could write a Fido check but have wanted to keep a local bank option in the mix.

Nwsteve

 

[packrat44]

Income from pensions are deposited directly to checking. This income covers most expenses. Once a quarter. I add what is needed to cover quartely estimated income taxes and the semi-annual property taxes.

 

[easysurfer]

I'm curious how many people make extensive use of direct EFT payments from their banks to pay bills? I set automated electronic checks for bills that have regular amounts and EFT direct from the bank to pay credit card bills where I might get a penalty if I am late. Where I can automate a payment using a CC I do that to get points (as long as there are not charges for doing so). I am leery of setting up direct EFT for everybody under the sun since I worry something would go wrong or some outfit go rogue and empty my account. Doing it with credit cards doesn't bother me since they have a dispute process. Am I too paranoid about EFT?

My priorites for bill paying are:

1) pay via CC (love the cash back bonuses)

2) pay via ACH or ETF

3) pay via personal check

I only really write one recurring personal check each month. That's my contribution to my HSA. I could even set this up automatically, but I don't since the amount could vary each year depending on the allowing contribution limit.

Plus, I'm a bit old fashioned in this way...a good old paper check and stamp (forever stamp, that is ).

 

[scrabbler1]

I'm curious how many people make extensive use of direct EFT payments from their banks to pay bills? I set automated electronic checks for bills that have regular amounts and EFT direct from the bank to pay credit card bills where I might get a penalty if I am late. Where I can automate a payment using a CC I do that to get points (as long as there are not charges for doing so). I am leery of setting up direct EFT for everybody under the sun since I worry something would go wrong or some outfit go rogue and empty my account. Doing it with credit cards doesn't bother me since they have a dispute process. Am I too paranoid about EFT?

I have been using automated payments for my routine, monthly bills going back to the 1990s. These include electric, phone (includes internet), and cable TV. When I had a mortgage, I had it there for a few years, even using it to fulfill my payoff notice (very helpful).

The only monthly bill which I could not pay that way was my co-op's monthly maintenance charges. But I very recently switched to online bill-pay after the post office misplaced and/or delayed my payments. I avoided any late charges but this is the next best thing.

For irregular and less frequent payments such as health, home, and auto insurance as well as income taxes and the rare credit card bill I get, I pay via check. The home/auto insurance company actually collects the money via electronic payment so I don't see a canceled check any more, while I pay the CC in person at a local branch walking distance from where I live so they can't "lose" a payment and hit me with late fees.

With only the irregular payments needing my actual labor, there will now be several months per year I will not have to write a check. Yay!

 

[Alan]

My priorites for bill paying are:

1) pay via CC (love the cash back bonuses)

2) pay via ACH or ETF

3) pay via personal check

I only really write one recurring personal check each month. That's my contribution to my HSA. I could even set this up automatically, but I don't since the amount could vary each year depending on the allowing contribution limit.

Plus, I'm a bit old fashioned in this way...a good old paper check and stamp (forever stamp, that is ).

I follow the same pattern except if I have to pay by check then I will do an on-line payment by check as it saves writing out an envelope, putting a stamp on it and carrying it to the mail box.

1) pay via CC (love the cash back bonuses)
2) pay via ACH or ETF
3) pay via paper check using on-line banking
4) pay via personal check

 

[Gotadimple]

I fund annually during my re-balance transactions. The re-balancing produces the cash I need in addition to interest/dividends/pension. The cash is transferred from my broker to my CU Savings account (which doesn't pay a lot). I transfer from the CU to an Amex HISA. Quarterly, cash is moved back to the CU Savings account.

The CU savings account automatically transfers a set amount twice a month to cover bills. I maintain a money market account at the CU with 6 months expenses in it for emergency use (i.e., nail in tire -- means new tire -- not in budget!).

Unfortunately, the CU Money Market account doesn't pay nearly as much as the AMEX HISA. If there was no such thing as a high yield savings account, this cash would be in a CD ladder maturing every quarter.

-- Rita

 

[kcowan]

We do an electronic transfer once a month, with exceptional transfers as needed, e.g. tax payments.

 

[W2R]

I have been using automated payments for my routine, monthly bills going back to the 1990s.

+1 Same here. Love it.

 

[hogtied]

monthly

Take funds monthly from my HSBC online account which pays 1% interest. Beginning of each year the HSBC account is replenished from my portfolio withdrawal.

 

[KB]

I replenish my credit union Money Market annually and from that account I replenish my checking account monthly. I have a base amount that I put in my checking account every month unless there are additional expenses such as property taxes or annual insurance payments.

 

[WilliamG]

I replenish my credit union Money Market annually and from that account I replenish my checking account monthly. I have a base amount that I put in my checking account every month unless there are additional expenses such as property taxes or annual insurance payments.

Do the same except do the money market move monthly also. 2 reasons: leaves money in IRA a little longer to grow non-taxed; we have taxes withheld so spread that out over the year as well.