How much money should I leave in my checking account?

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asked Jun 22, 2023 in Other-Finance by Xsjender (620 points)
How much money should I leave in my checking account?

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answered Jun 22, 2023 by Amazenyu (900 points)
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.

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