I do not have any bills that come directly out of my checking account because I pay (almost) all of my bills via credit card and then use my checking account at ING to push payments every seven days to the credit cards. I think that because I control the money leaving my checking account I have not worried about having a buffer in the account so I had about $100 extra in there for ‘just in case’ scenarios.
I recently spoke to a friend of mine who was actually lucky to have a buffer in his checking account because there was a glitch in his payroll for a short time. My friend has rent coming directly out of his checking account since there is a $25 fee for paying via credit card. His company was recently acquired by another company and because of the switch to the new accounting system, their salaries were not put into the direct deposit system for that pay period. He was operating on a zero based budget of sorts and had every dollar in his checking account set up for a predetermined purpose. His paychecks came every two weeks so the money would flow in and out like clockwork….UNTIL the company takeover and the resulting loss of a direct deposit.
Having a buffer in the account that was enough to cover the rent and then some was truly a lifesaver that week as my friend realized that he would have been hit with overdraft fees if the money was not there. He has now decided to keep a buffer of one full paycheck in the checking account so that he will not have to deal with the heart stopping possibility of not having enough money in the account and having all those bills coming out of his account.
I recently upped my buffer in the checking account to $200 because I did not want to keep a lot of money in there because the rates on ING checking are so low. I am now going to increase my buffer to $500 this month and work my way up to having a full paycheck buffer in there as well to safeguard against something like that happening to me. I will fund the buffer by letting any unused money from the budget stay in the checking account, instead of moving it over to my surplus account in order to keep my zero based budget in balance.
Do you keep a buffer in your checking account? How much is it?
I also make a point of keeping a buffer in my checking account, but that is partly because my savings are not easily accessible. That way, in case anything happens, I’ll always have some money to get by on. You never know when you might lose your job or a big expense may pop up.
i think a buffer is really important too. you don’t know if something might come up.. it’s good to be safe.
I only keep around $25 “extra” in my checking account. I keep around $500 in my savings at that bank. However if a real emergency popped up, I can transfer money from my savings at my credit union. My bank credits transfers immediately and they don’t charge a fee.
It also helps that I watch my checking like a hawk. I think I seriously check the account every 2 or 3 days. So I’m generally on top of things.
Since online bank records are not always kept in real time, I’m very careful to keep some buffer money in my account. If you find yourself in a bind with your bank and need good representation, hire a good criminal defense attorney.
It is certainly a good idea to maintain a decent buffer in your checking account. Never know when it might come in handy, like you said.
I agree, a buffer is important especially if you are like me and not in the habit of checking it often enough. I have an overdraft account on my checking account of $500 which the bank automatically takes money out of to cover things that go through if you don’t have enough in the account. If you pay it back before your next cycle there is no interest.
ING account also offers an overdraft account with a similar interest arrangement. Mine is only $250 but I have never had to use it and hopefully I will not have to use it any time.