Why does money take so long to move between accounts? Is this a US thing?
ETA to actually answer the question, I don’t have a buffer in my checking account except for my £200 overdraft.
All my paychecks go in to checking. I keep all my money in there until I pay bills once a month, and I transfer the excess over to a high-interest savings account (at a different bank).
Once that’s done I probably end up with about $300 in checking, but then get paid every week, so it’s shortly back up over $1000.
I keep $1000 in reserves in savings at the same bank as checking, to cover my mortgage if need-be.
about 2000. As mentioned above, with the interest rate so low, it is not worth keeping it close. One overdraft fee would wipe out years of interest on that extra money in savings.
I usually have between $4-6000 in my checking account. No use putting it in savings - it wouldn’t change my spending habits. I like to have it available if I need it.
StG
We have two. One is used for direct deposit and our regular monthly nut comes from there, so at any given time it has between $1,000 and $7,000 - $8,000 in it. The other is a money market account with check-writing privileges which has between $70,000 - $80,000 in it and we use it for cover home renovation projects and such. I know I should move some out of there into an ING account or something, but I’m lazy.
Usually somewhere between £3,500 and £7,000 - that about $5 to 10k I think.
We also have a joint account for household bills and mortgage which I feed with my personal cheque account.
Lump sums get paid off the outstanding mortgage regularly at the moment.
Between $1k and $4k usually.
Shared checking: Just the normal monthly income / outgo - in other words, pay gets deposited, and we leave it there until it’s spent (or transferred to whatever savings account we’re using for whatever long-term goal). I don’t worry too much about a buffer - if I miscalculate, we have an overdraft line of credit. So it might be anywhere from several thousand (just after payday), to less than a hundred (just BEFORE payday).
My personal checking: practically nothing - as in, less than 30 dollars most of the time. I don’t use that account for anything except the occasional Paypal transfer; if I need to make a payment via Paypal, I transfer it from the shared account.
A minor disagreement, but only a minor one: financial advice people suggest you try to build up a small “life happens” fund even when you’re paying off debt. Once that “life happens” money is socked away, then go back to paying the debt off aggressively. The thinking being that this way, if the car breaks down, at least you can pay that bill without putting it on a credit card.
Do I follow that advice? Um, I’d like to plead the 5th on that… ;).
I have a three-tier banking system: two checking accounts and a savings account. I was getting sick and tired of always trying to figure out whether or not my rent had come out yet, etc. and how much money I actually had left in there that I was allowed to take out.
So I have one checking account strictly for the bills. The rent, insurances, etc. all sits in there ready to be paid out so I don’t touch it and accidentally spend it. The other checking account is money I’m allowed to touch for groceries, incidentals, blowing on nights out, etc. That way, when I check the balance, I always know how much is left without having to work out what needs to stay in there to pay the rent next week.
So when I get paid each month, I work out how much I need for bills that month and smuggle it away, leave myself enough in the other account for my expected grocery and other personal expenses for the month and the rest of it goes into the savings account for savings and emergencies (or until I blow too much on a night out and have to transfer some of the savings over to eat for the next three weeks…)
Like you, I keep enough in “checking” (almost all my transactions are online now) to pay monthly bills and mortgage, plus a modestly comfortable cushion. As mentioned by others, there really is no place to park short-term money that offers any remotely reasonable return these days, IMO. Current interest rates on savings, money market accounts and even laddered CD’s are a joke. Long term investment I approach differently.
If I desperately need money, I can borrow from my parents without feeling too bad, comparing how much they’ve loaned to me compared to my sister. If I can at least get my credit card paid off, I’d be much happier. It’s too much of a temptation - the student loans aren’t going to get anything added to them.