Tiny
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Post by Tiny on Apr 16, 2021 16:05:19 GMT -5
In the vein of biggest expense and when do you pay your credit card:
What's your style? How big or small a balance (don't need an actual number) do you keep in the account you pay your monthly bills from:
A.) the minimum - if a paycheck doesn't deposit you will need to transfer/find money to pay the bills. I guess this is "paycheck to paycheck".
B.) a "months" worth of expenses - so each paycheck replenishes the $$. (in other words the mortgage payment you make at the beginning of the month - has been sitting in your account a week or two or three before it was due. If you stop getting paid - you have 30 days to come up with the $$ to pay the next round of bills. I guess this would be "having a months worth of expenses on hand".
C.) so much money - you don't worry about not getting a paycheck (or a transfer of income to it) or about paying the monthly bills. I don't know what I would call this...
I spent a lot of years doing A My paycheck would hit my checking account and then a day or two later the bills would get paid and some would wait for the 2nd round of monthly bill pays. There were often a day or two in the month when my checking account had a balance of $100 or less. I was doing a "self imposed" paycheck to paycheck lifestyle. I never overdrew my checking account so it worked ok (but sometimes involved Drama and Stress).
I've moved into doing B where I've got enough money in checking to cover a months worth of bills. the bills get paid and my paychecks replenish the account. If my paychecks stop, I've got money to cover the upcoming bills (a months worth).
I have never done C - I've never had a checking account with a big enough interest payment to make it worth while. I have had friends say they keep 20K or 30K in their checking account (mostly because they never transfer it to savings or investments) it just sits there... I guess maybe it's an EF of sorts.
So, what's your style?
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Post by minnesotapaintlady on Apr 16, 2021 16:14:28 GMT -5
C. High-yield checking account at my credit union up to 15K so my emergency fund is parked in there along with the replenishing month. I think the "high yield" is only about 2.5% right now, but better than I'd get anywhere else.
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Lizard Queen
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Post by Lizard Queen on Apr 16, 2021 16:15:52 GMT -5
C. I'm just lazy, and I know it's dumb because it doesn't even earn any interest.
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azucena
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Post by azucena on Apr 16, 2021 16:17:19 GMT -5
A version of A paycheck to paycheck because it forces us to save.
Each payday I pay the bills for the week, figure out other money needs that week + 100 and move anything left into savings.
I get paid every other week, and DH is 15th and last day of month. If the upcoming week doesn't have a payday, then I figure out how much we will need for bills and spending and put that amt into a second checking acct as a placeholder. Then I pay myself from it the following Fri. This placeholder acct is also where write any big checks so then I don't have to pay attn when they clear.
If we end up overspending, we have to pull from savings to cover it and that gives us a heads up to pay more attn.
I think this is the fourth or fifth year of this mthd, and our savings has really grown. Seems complicated but it's not.
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jerseygirl
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Post by jerseygirl on Apr 16, 2021 16:36:05 GMT -5
I traveled a lot internationally and had to pay costs often before getting reimbursed. I’ve always kept about $8 to $10,000 in checking because travel was expensive. Put most day to day such as groceries, haircuts, even dentist on my credit card and auto pay electric cable from checking. Have direct deposit for SS and RMDs. With the infinitesimal interest rates I keep only $1-2,000 in savings
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chiver78
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Post by chiver78 on Apr 16, 2021 16:37:02 GMT -5
a version of A. I skim $200 off each paycheck to a debit card that lives in my phone wallet, a carryover from when I was taking public transportation to work. I wanted to keep losses to a minimum if the phone was ever lost/stolen. past that, my whole paycheck goes into my checking account. I cycle recurring bills through credit cards with perks, and the payments are set automatically to pay off the balances. I will transfer out of the checking account into whatever savings account I am aiming for.
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jerseygirl
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Post by jerseygirl on Apr 16, 2021 16:37:14 GMT -5
C. High-yield checking account at my credit union up to 15K so my emergency fund is parked in there along with the replenishing month. I think the "high yield" is only about 2.5% right now, but better than I'd get anywhere else. That’s a really good interest rate!
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Cookies Galore
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Post by Cookies Galore on Apr 16, 2021 17:01:29 GMT -5
For the past few years I've been keeping a month or two's worth of expenses in my checking account so if all the shit ever hit the fan at the same I'd be good and not have to go into my savings account. Since we're not dining out every week (pick up, but even our most expensive takeout has been less than a typical meal out) or really going anywhere, I've accumulated and have maintained three times my monthly take home pay in my checking. So I need to move some of that to savings.
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buystoys
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Post by buystoys on Apr 16, 2021 17:35:12 GMT -5
I mostly keep about 4-6 weeks in the checking account as slush. I do have a fair savings account I can pull from if in urgent need. I have an online savings account where I keep our annual IRA withdrawals until we need some of it. There's also a savings account for the rental. That one reimburses me for the rental expenses such as the new air conditioner. We let it get to X amount before we start keeping the rent for ourselves.
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Blonde Granny
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Post by Blonde Granny on Apr 16, 2021 17:52:34 GMT -5
About the only thing I use my checking account for is to pay the cleaning ladies when they come....$142. I use my debit card at Walmart to buy groceries and like Chiv, I withdraw $200 each time and put it into my"safe". I don't use a credit card much as I don't like having to worry about paying the pill when it comes....just in case I've made a mistake. The amount that accumulates in my checking is low right now since I've been spending out of there, but normally I keep $10K or so in there.
No checks are used to pay month bills except the cleaning ladies all the other bills are on auto pay.
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susana1954
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Post by susana1954 on Apr 16, 2021 17:52:49 GMT -5
I guess mine is a version of "A." I have always made myself artificially "poor" in order to control my spending.
On the other hand, I always have enough money in checking to pay my bills the day they post, not the day they are due. And that is when I pay them. So there is a cushion in there, but it is already earmarked.
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oped
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Post by oped on Apr 16, 2021 17:59:27 GMT -5
Honestly? Depends on the season.
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justme
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Post by justme on Apr 16, 2021 18:30:21 GMT -5
So my paycheck is split up into 3 different accounts. One that pays my mortgage/HOA and the months that are 3 paycheck months provide cushion/savings. There's currently about one paycheck worth of cushion in there, maybe more. It took a hit when I went on furlough.
Another chunk goes to my main checking account. This is what I live on and the cushion in there varies. I basically have it because so far I'm too fucking lazy to set up everything on a different checking account I have that earns money and is at the bank where all my savings are. The cushion depends on whether a 3 paycheck month has hit, whether I've cash flowed some trip, and the like. I did a weekend away in Feb and March and cash flowed it all since I had money in my checking due to it building up a bit from the pandemic, but now I'm back to having to watch it a bit which is a bit more of a pain. This amount has actually stayed the same since I started at my current job 6 months ago - it's mainly big purchases or trips that make me grab from savings.
The rest of my paycheck just gets dumped into a savings account and some of it is dispersed into others and is there in case the timing on my checking account sucks.
Oh I guess it's actually 4 different ways as 6 months ago I started participating in the ESPP. Though right now I'm either holding or selling and then buying new stocks, but I consider that my extra savings account.
So I guess A but that's deliberate. Even when I switch over to my main account it'll still be A because their checking accounts earn like 0.10% and the savings varies but has been close to 1%.
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Deleted
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Post by Deleted on Apr 16, 2021 19:28:29 GMT -5
I have 2 checking accounts at the same bank. One gets a direct deposit per paycheck in an amount that’s needed to cover my “bills”. The other gets whatever is left over from my payroll deductions, including the amount going to the “bill” account. The bill account, sometimes it looks “hood-rich”, sometimes it looks pitiful. As long as I can pay my bills every month with whatever is in that account, I’m good. It’s also one of my “safe” accounts. I don’t have a debit card for it, and I’ve only ever paid my mortgage out of it directly, and even that stopped many years ago. These days, I just transfer funds out of it, to another account, as needed. So it’s not high on the radar for being exposed to potential hacking. That system allows me to feel free to spend everything in my spending account, without worrying that I won’t be able to pay my bills. In my mind, it’s the only account I have when it comes to spending money, even though I have a few more accounts, for bills, long term savings, irregular and short term savings. I’ve learned that playing mind games helps me manage my money better, and not screw up too badly. So, that system worked when I was learning to manage my money better, and I haven’t had reason to change it. It’s just easier for me to separate my money and have just 1 account that I can spend from. That’s with the understanding that if I spend too much and run out of money, I might have to eat bologna and crackers until my next payday. But I’ll still be able to pay my bills. Fortunately, it hasn’t come to bologna and crackers yet.
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jeffreymo
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Post by jeffreymo on Apr 16, 2021 21:50:54 GMT -5
I have a spreadsheet that forecasts out all expected income and expenses for 2-3 years including expected raises for checking. For savings I put potential bonuses with a ‘ in front of the figure it so it treats it like a text field, left-aligns it so it sticks out, and doesn’t calculate it into the running balance. Savings also gets tax refunds which I have a good grasp of and credit card rewards cash. Every month or so I add in actuals and make sure that we’re still on track.
We usually have a big enough balance in checking so that we don’t have to think about much except every July/August when the kids private school tuition comes due which we pay in a lump sum to receive a 3% reduction.
ETA: Everything that can be auto paid with a credit card is and then the credit card balances are auto paid on the due date.
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tallguy
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Post by tallguy on Apr 16, 2021 22:40:06 GMT -5
I only have one checking and one savings account. Virtually all of my spending goes on credit cards, which pay near the end of the month. The only other spending out of the account is semiannual property tax payments and annual payments for home and property insurance, so can be very easily planned. I generally like to keep between $1000 and $3000 in checking. If the checking account balance gets up over $3000 and I don't have any large spending planned soon, I will transfer $999.xx or $1999.xx to again make the savings account an even thousand multiple and clear up the few cents interest it earned. I like to keep savings between $3-10,000 and will start to think of things to spend it on if it gets above that. At this point I can take around $10-13,000 per year from my IRA and still remain tax-free, so I consider that pretty much mandatory. If I think I am going to need cash at some point I will take part as a distribution. If I don't need cash soon I will convert it to Roth instead. The joys of having low expenses.
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Regis
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Post by Regis on Apr 17, 2021 5:55:26 GMT -5
A version of A paycheck to paycheck because it forces us to save. Each payday I pay the bills for the week, figure out other money needs that week + 100 and move anything left into savings. I get paid every other week, and DH is 15th and last day of month. If the upcoming week doesn't have a payday, then I figure out how much we will need for bills and spending and put that amt into a second checking acct as a placeholder. Then I pay myself from it the following Fri. This placeholder acct is also where write any big checks so then I don't have to pay attn when they clear. If we end up overspending, we have to pull from savings to cover it and that gives us a heads up to pay more attn. I think this is the fourth or fifth year of this mthd, and our savings has really grown. Seems complicated but it's not. This, but add 10% instead of $100.
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andi9899
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Post by andi9899 on Apr 17, 2021 6:40:53 GMT -5
Mine is a version of A. I pay all the bills that are due before the next paycheck. Then I go to the grocery store. I leave myself $100 and put the rest into savings.
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steph08
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Post by steph08 on Apr 17, 2021 6:50:08 GMT -5
A, but I keep a cushion of $500 that I don't put in my check register in case of emergencies because it will take 2-3 days to transfer larger amounts of money from my Capital One savings account.
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lurkyloo
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Post by lurkyloo on Apr 17, 2021 8:55:00 GMT -5
We’re extreme C. Just let it pile up Mine is not so bad, though I wasn’t worried about covering tax bills, two years worth of IRA and one of prepaid tuition all at once. DH could pay off either mortgage with some left over. ETA I would call this lazy, but fortunate.
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nidena
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Post by nidena on Apr 17, 2021 10:18:29 GMT -5
My checking account is just an airport hub for my money. Money comes in from elsewhere and then heads back out to its final destination, be it savings or paying bills. Very little actually lives in the checking account for very long.
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Post by The Walk of the Penguin Mich on Apr 17, 2021 11:10:23 GMT -5
I have gone from A to B to C over my lifetime. I’m at C now, I like it here best.
I normally pull $200 out monthly, pay my bills, transfer to savings and let the rest build up until it reaches a point to transfer to savings. Savings reach a point where I then transfer it to investment accounts.
How much I allow to build up depends on what I have going on in life. I am keeping more in savings as I know I will need to buy a car sometime, and a good chunk of it will go for that. I might leave more in checking if we are traveling a lot.
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Artemis Windsong
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Post by Artemis Windsong on Apr 17, 2021 11:38:43 GMT -5
C.
We have our main household account to pay bills. H. keeps a high balance so he doesn't have to transfer too often.
Account #2 was when we were going to have a rental property that we ended up selling. It has to have a balance to keep monthly fees washed.
I have an account where my ss adds up and is for insurance deductions.
We are anticipating an outlay from my covid hospitalization. Only 2 obligations have been received.
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Post by Deleted on Apr 17, 2021 12:30:15 GMT -5
I'm closest to C. SS, 2 pensions and any withdrawals from the brokerage go in. Because I'm a control freak and detail-oriented, my "checkbook register" is in Excel with multiple sub-accounts- a reserve for things I've already charged on my credit cards, reserves for Medical, property taxes and insurance, known large projects (right now that's the work I'm having done on the house) and a slush fund. When the slush fund gets too big, I donate some and put most of it in the 529 accounts.
I don't think I'll ever bounce a check!
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countrygirl2
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Post by countrygirl2 on Apr 28, 2021 20:26:06 GMT -5
Ours is SS, RMD withdrawals, and some money from the rentals. Unless we buy a house we don't take anything out of savings but the RMD.
The truck and solar were bought from sale of rentals, was gain that we used.
We have one account for extras, no checks on it. Hubs has his own checking. I use the general one for myself and household stuff. We have another where we put one RMD withdrawal, another goes into hubs checking to fund his wants and needs. The other withdrawal pretty much goes for taxes, ins, and property taxes.
I think we are doing ok, or hope we are.
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teen persuasion
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Post by teen persuasion on Apr 28, 2021 21:37:09 GMT -5
C.
It's partially a holdover from when DH was sole breadwinner and on a weird 21 biweekly payroll system, with a 10 week gap of no paychecks. So we had to let a balance build up to cover that annual gap.
It's also partially because we have a lot of big, lumpy, annual expenses instead of fairly even monthly bills. So one month the CC bill might be $700 (nearly everything goes on the CC and gets auto paid in full), another month might be $4k. We also get big lumpy deposits, like tax refunds. My biweekly paycheck deposits are pathetic, by comparison, after pushing 80% to a retirement account.
So I don't budget on a monthly basis, I work on an annual basis. I let the balance float up and down.
I drove myself crazy when DH's employer first switched to the 21 check system, worked out how much of each paycheck to transfer to savings for later bills, kept neglecting to move it, so was mentally refiguring skipped transfers out minus new bills back in... I constantly felt like we didn't have enough and I had to micromanage it. When I just left it in checking, it didn't need managing, we never ran short or spent $$ earmarked for future expenses that we hadn't locked up (in savings), it just worked.
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nidena
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Post by nidena on Apr 28, 2021 22:46:43 GMT -5
My checking account is just an airport hub for my money. Money comes in from elsewhere and then heads back out to its final destination, be it savings or paying bills. Very little actually lives in the checking account for very long. Two "planes" arriving by Friday.
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laterbloomer
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Post by laterbloomer on Apr 29, 2021 8:53:51 GMT -5
I do A. As someone else said, it helps me control my spending. I leave bills plus $500 in that account. When it's empty, or close to it, I stop spending. The CC gets paid out of that as well. If I don't do that I use the CC as a work around for my spending plan. I remember the days that I didn't think of myself as broke until I had spent my overdraft as well. It has taken quite a bit to change that mindset and I don't want to go back there. My emergency fund is in my TFSA. I have more than enough credit available for the short term if needed and it won't take long to cash out some of the investments if needed.
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NoNamePerson
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Post by NoNamePerson on Apr 29, 2021 8:59:53 GMT -5
My checking account is just an airport hub for my money. Money comes in from elsewhere and then heads back out to its final destination, be it savings or paying bills. Very little actually lives in the checking account for very long. Mine is more like federal clearing house “money in money out” but I like your airport comparison
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resolution
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Post by resolution on Apr 29, 2021 10:37:28 GMT -5
Normally B. I try to have a bit over a month worth of expenses remaining in checking after the bills are paid, and the same in savings.
Currently we are at C because we bought a new house and sold our old one. We still have the money from the old house in savings while we have electricians, plumbers, and painters working on the house. Once all the big jobs are paid for, I will send the remaining funds elsewhere. I had planned to move it to a money market in the mean time, but the money market pays exactly the same as my savings account, and the savings account is FDIC insured.
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