Your Typical Checkbook Balance

[Fireup2020]

What goes into that account comes out soon! Investments/savings $$$ gets swooped out as they are due (most stuff set up on autopay) I'm with FIREDreamer regarding using the CC for IMMEDIATE a=stuff, but for real emergencies, my ING account is just a few clicks away. Balance today is $9.76

 

[d]

i'm surprised at how many carry such large balances ... in my case it's likely because i can't quite figure-out how to manage it better, i really ought to pay more attention.

 

[aida2003]

We've got a very high turnover in our checking account, but I've noticed that the usual balance stays a bit above $1k. Once in a while it gets below $1k (e.g. house taxes or house+auto insurance).

 

[Khan]

What some of you keep in your checking account wouldn't cover a trip to the liquor store for me. Just kidding, I always use plastic at the liquor store. I checked the last block in the poll. My thinking has been that keeping money in the checking and MMA is to cover emergencies. For those of you who keep your checking account balance low what do you do if you need money in a hurry?
Jeff

I have credit cards (always paid in full).
I have $500 overdraft loan available.
I could simply write a large check and transfer the money from somewhere (MMA, CD, US Saving Bonds) before the check clears.

When I wrote a check to buy a car, I told them the check wasn't good until I got home.

 

[d]

i wouldn't dare write a check without actually having the funds available; murphy's law all too often comes into play.

 

[Kronk]

Since I only get paid once a month, I feel better about having a decent amount in the checking account. Right now that's nearly 10k, but I'll have a 3k credit card bill in another week or so. Once I get paid next (early July), I'll ship off excess money to VTSMX and start over. I also don't have an "emergency fund" per se, so this amount allows for a couple of minor emergencies without dipping into the HELOC or the after-tax stock fund.

Now, it'd be interesting to merge this with the other thread and see there is a correlation between the amount of money in the checking account and whether or not a person balances the check book...

 

[Walt34]

For those of you who keep your checking account balance low what do you do if you need money in a hurry?
Jeff

Transfer from savings/MMA/deferred comp with a few keystrokes. Well over six figures there.

 

[clifp]

I use to try and keep less than $500 in Schwab checking but now that Schwab Money Market and Vanguard Money maket rate is roughly the same as Schwab checking (2% vs 2.5%). I don't sweat it.

 

[Dawg52]

I maintain on average around $1k. I pay for as much as I can with my Penfed credit card.

 

[copyright1997reloaded]

Mine's sitting around $1500, but it is only that high due to some upcoming end of month bills. A couple years ago when interest rates started moving up I started to track my cash/money market balances along with their overall (weighted) average interest rate and days till maturity (to account for CD's, etc.) Because of that, I got interested in the "game" of maximizing the interest rate and the resulting expected annual interest, while not going out too long on the curve. (Although I did lengthen the avg maturity as I thought interest rates were peaking.) I've been able to get the weighted rate (which includes ALL cash accounts) up from 2.94% in Dec 2005 to 4.3% today. (It was as high as 5.38% in Sept 2007.) Those 6.25% and 6.00% Penfed CD's really help. (I'm sitting with an Average Days to Maturity of about 380 days.)

 

[NudistsInParadise]

Where we bank, there is a stiff fee for a checking account that drops below $5k. So every month, we x-fer into that account whatever amount required to raise the balance above $5k, and then spend down the balance through the month to pay bills, for cash, etc.

This also gives us an easy way to see how much our monthly "cash flow" is, as whatever amount we need to x-fer into the checking is approximately what we are spending each month.

Comments?

 

[kumquat]

When our chequing (not a spelling error, just the Queen's English here with Betty Windsor as head of state) account drops below about $5K we usually top it up to about $20K. The best interest rates are under 4% and the government takes ~47% of that in tax. $20K represents 2 -3 months of spending and gives some assurance that no cheques will bounce.

I checked the balance today, bit of a surprise. Because of a large income tax refund (which I knew was coming but not when) and proceeds of sale of ESOP shares (which I expected later this week), balance was over $500K. Off to another thread to decide what to do with it.

 

[Maurice]

Jeez, this is embarrassing, but mine hovers between 30 and 50 grand. No interest.

Now that I'm not working I'm going to manage it more closely. It also helps that I'm not traveling any more, so my expenses are far more predictable.

 

[rayvt]

Where we bank, there is a stiff fee for a checking account that drops below $5k.
Comments?

What the

Were that me, this would be known as "my previous account". Unless, of course, it paid market-rate interest. Which I bet it doesn't. General rule: when a bank sets out to screw you, they don't limit themselves to just one---they screw you 7 ways from Sunday.

 

[rs0460a]

i'm surprised at how many carry such large balances ...

As for me, I do because I can.

Growing up in a home where my father spent every last cent on "his desires", often waiting till he got the final notice before they turned off the utilities to pay the bill, I sort of suffer from a "deprived mentality".

Good financial sense? Of course not. Good "emotional satisfaction"? Absoutely .

- Ron

 

[pksublime]

seriously? well my paychecks go directly to savings, then the day before bills go out (the 1st) enough goes in to cover them including all my transfers to sinking funds accounts, and then on the 1st it all goes out.
So all but two days of the month it's at $0.00!

If I need money in a hurry, I can call in a transfer from savings to checking and withdraw it at any bank/atm. I also keep some cash at home at all times.

 

[pksublime]

My landlord routinely cashes my rent checks three weeks after I've handed them over, so my checking account generally has a balance at least equal to a month's rent. I'd leave the balance smaller for the first few weeks, but once every six months or so he remembers to cash them on time. Since it's not really "my" money once I've handed the check over, I don't feel all that bad about the lost interest.

You could always get a Cashier's Check or a Money Order instead. If you talk to your branch manager, you could probably explain the situation and get the fee, if any, waived for consistent customer courtesy.

 

[free4now]

I'm also amazed at the low balances that people keep here. I add more money to my checking account whenever it goes below about $5000... that's a bit more than a month's spending. Yeah, I lose a hundred or so dollars in interest a year over what I could save if I were more careful. But I've never paid any overdraw fees for my bank, and I like knowing I've got a month's flexibility where the bills will get paid even if I were in the hospital or otherwise tied up for a few weeks.

 

[SecondCor521]

I try to manage my main checking account to where it has less than $1 in it, but depending on the vagaries of ACH transfers to and from savings, when the bills actually hit, and when checks get cashed, it generally ranges from +$3K to -$1K. I have an overdraft line set up to my debit card at the same bank which runs at 6.75%, so I try to avoid overdrafting but I don't sweat it when I do because the interest cost is only a small amount.

2Cor521

 

[CitricAcid]

This is a really interesting thread, I use Schwab for my checking account... it has overdraft line of credit so if you ever need to go over, which I haven't, it should cover your needs (at a lower interest rate than most credit cards I may add)

 

[TromboneAl]

My average $500 balance refers to our local bank's checking account. We keep it just to have the option of local face-to-face banking stuff and a safe deposit box. We write just a few checks, and use the debit card at CostCo. Interest about .5%.

We also have VanguardAdvantage (recommended) for any other bills that can't easily be charged to the credit card.

When I decided on a $500 balance, the difference in interest rate was about 4.5% between the bank and the MM, so I figured that for every $1,000 I didn't have in the checking account, I'd save $45 per year. That's worth a little hassle. Now that the MM yield is only 2.2%, maybe I'll allow more in the checking.