How Much Should You Have In Your Checking Account?

By Staff

How much cushion do you like to leave in your checking account? You know, the money you try to balance down to instead of zero. In the past, I have simply tried to keep a few hundred dollars in my checking account to avoid overdraft fees.

I’ve recently discovered the beauty of declaring a specific amount in checking as the equivalent of zero, and basing our budget on that amount. For instance, if $500 feels like a comfortable cushion for you, then you should save $500 in your checking account and do not spend below this amount.

If at the end of the month your balance is $528.31, then move $28.31 to your savings account and start with exactly $500.00 as your balance heading into the next month. It’s a quick way to see how successfully you are budgeting without worrying about dropping below zero.

The Frugal Roundup

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