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?