Should you leave more than $1,000.00 in a checking account?

0 votes
asked Jun 22, 2023 in Other-Finance by Xsjender (620 points)
Should you leave more than $1,000.00 in a checking account?

1 Answer

0 votes
answered Jun 22, 2023 by Amazenyu (900 points)
You should leave more than $1,000.00 in your checking account if possible to act as a cushion in case you need it for the event of a job loss or other big expense.

You should have at minimum of one to two months of living expenses in your checking account, although more won't hurt.

You should leave at least one to 2 months of living expenses in your checking account if possible.

For example if your living expenses are $1,000.00 per month then you should leave $1,000.00 per month in your checking account to act as a cushion.

The amount of money that should be left in your checking account is at least one month to 2 months of living expenses to act as a cushion in case of job loss or if something big comes up.

So for example if your monthly living expenses is $1,000.00 then you should have at least $1,000.00 in the checking account for 1 month but $2,000.00 is even better.

The more money you leave in your checking account the better in case of a job loss or big expense.

Some experts recommend adding 30 percent to this number as an extra cushion

Unless your bank requires a minimum balance, you don't need to worry about certain thresholds.

On the other hand, if you are prone to overdraft fees, then add a little cushion for yourself.

Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000.

Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.

If you're just looking to pay for everyday expenses, a checking account is the way to go.

If you're focusing on growing your money, a savings account is a better fit.

Regardless of the account type you choose, make sure you pick one suited to your financial needs and goals.

104,844 questions

109,278 answers

1,321 comments

7,057,167 users

...