Figuring out how much to keep in saving vs checking.

What methods does everyone use for figuring when to move money to a saving account vs a checking account?

I'd like to have my money earning better interest while its waiting for its job. I know its not a rule, but you're supposed to keep your accounts simple. I've done this by setting my checking and savings at Ally.

So far, I split my categories into groups based type of spend and when I expect to spend (monthly or less / annually / opened ended rule 2 stuff). I keep the Annual / Rule 2 / Emergency fund in my savings account. Everything else stays in checking.

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    • HappyDance
    • YNABing consistently since 2014
    • HappyDance
    • 2 mths ago
    • 3
    • Reported - view

    Instead of assessing how much you need in chequing by "type" of spending, figure out how much you need by "timing" of the spending.

    At the end of this month, after my paycheque is deposited, I'll assess how much I predict I will need for next month from all categories, and if the balance in chequing is higher than I predict needing after my salary deposit, I  will transfer the excess to savings. If the balance is lower than what I think I'll need, I transfer from savings to chequing.

    The amount I like to keep in chequing is based on this formula:

    1.  my average monthly spend from the income/expense report for my frequently used categories, plus
    2. any scheduled irregular or true-expense categories in the next 4 to 6 weeks, plus
    3. any planned large discretionary spending I've been saving for and will spend, plus
    4. $1,000 (my preference for minimum balance).
    Like 3
    • Superbone
    • YNAB convert since 2008
    • Superbone
    • 2 mths ago
    • 5
    • Reported - view

    Make it easy by having repeating scheduled transactions for all your bills and income. Then, all you have to do is look at your running balance in your checking account. I can always see a month ahead what my lowest balance will be. I keep a buffer of a couple thousand dollars to be safe.

    If you get paid fortnightly like me (every two weeks), set up two recurring paychecks, 2 weeks apart repeating every 4 weeks.

    Like 5
  • I've been YNABing since 2014. So I have enough data to know that typically $X goes out of my checking account every month. Therefore I make sure that on the first of the month $X+Y% is in my checking account and anything extra goes to my savings account. And since there is 21 days between when a credit card statement closes and when payment is due, I have plenty of time to move money if it turns out my formula will leave me short in a particular month.

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  • This is the exact reason cash forecasting would be nice. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 mths ago
      • 5
      • Reported - view

      Gearbanger Account balance forecasting is easily done in YNAB through scheduled transactions and the running balance.

      Like 5
      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
      • 2
      • Reported - view

      Gearbanger Even easier if most spending is done on a credit card (budgeted, of course). I have a minimum balance that I prefer to keep in my checking account. With scheduled transactions, it's really easy to look at the running balance and if the balance is likely to hit that minimum balance.

      Purely as belt and braces, my bank also text me if my balance goes below my chosen minimum.

      Like 2
      • Gearbanger
      • Gearbanger
      • 2 mths ago
      • Reported - view

      nolesrule This is very helpful and didn't know it had been implemented. One problem I'm seeing is that if you have a paycheck setup for every 2 weeks, the scheduled transaction only show the next paycheck, not the following paycheck in 2 weeks. This throws off the running balance. 

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      • Gearbanger
      • Gearbanger
      • 2 mths ago
      • Reported - view

      Gearbanger Same for my mortgage payment, I pay it every 2 weeks. Scheduled transactions only shows the next payment. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 mths ago
      • 3
      • Reported - view

      Gearbanger you can solve this by setting 2 different recurring transactions 2 weeks apart that repeat every 4 weeks. This will give you 4 weeks of accuracy. 

      Like 3
      • dakinemaui
      • dakinemaui
      • 2 mths ago
      • Reported - view

      I have a reminder every 2 weeks (right after bi-weekly payday) to ensure sufficient checking balance for the next 2 weeks. I don't need to consider beyond the next instance of a biweekly expense. Doubling up on scheduled transactions as @nolesrule described is effective if you do need to look further out.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 mths ago
      • Reported - view

      dakinemaui I like being able to see 4 weeks out at a time. I don't have any reminders. I just review it every once in a while. Usually look at my budget at least once a day, anyway.

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      • dakinemaui
      • dakinemaui
      • 2 mths ago
      • Reported - view

      Superbone I ensure there's enough in the account without my next check arriving exactly when it's supposed to. I figure I'm going to be sweeping the extra to savings when it does arrive anyway, so that's "far enough" for me. :-)

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    • PhysicsGal
    • Nerdy female homo sapien
    • physicsgal
    • 2 mths ago
    • 1
    • Reported - view

    I enter all my future, known transactions from my checking as scheduled transactions and keep the running balance on.  I keep just enough in my checking to cover my expected bills and other debits for the month with about $500-$1000 left over as a buffer.  This is an easy process for me because almost all of my spending is from a credit card, with only the monthly payments to my credit cards cards, my mortgage, and a few utilities coming directly out of checking.

    I also have my checking and savings at Ally, and my savings is set up with Ally as the backup for my checking.  I also use a monthly scheduled transaction from checking to savings and the savings booster feature of Ally to let it move more into my savings, so that sometimes makes my buffer a little smaller, but it only transfers small amounts and I figure it can't hurt since I always have the savings it is transferring to as a backup in case I miss a bill and overdraft.

    This article helps if you haven't seen it yet.  It took me awhile to get confident enough in my budgeting and that I would continue to budget in the future, to realize I don't need to have any relation between my accounts and my budget (there's a forum post somewhere on here with me being dragged into that mindset kicking and screaming), but if you stick with YNAB your life will be much easier once you de-couple the two.  It has made my budgeting a lot easier, especially once I started using credit cards again so tracking my checking account became fairly simple.  But if it takes you time, it takes you time.  Just come back to that article once you know you're a budgeter for the long haul and simplify your life by forgetting about connecting your budget category balances to your account balances.  You will thank yourself later.

    https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

    Like 1
    • Dave
    • Slate_Gray_Deer.9
    • 2 mths ago
    • Reported - view

    I like the idea of having scheduled transactions and using the running balance. Right now, I only have transactions that happen automatically as scheduled transactions. I've been doing the YNAB thing for just under two months now, and while have i've had some nice wins, I want to get some more time and data with YNAB to make sure i stick to it before put more of the process on autopilot

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      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
      • Reported - view
      Dave said:
      Right now, I only have transactions that happen automatically as scheduled transactions.

       I'm pretty similar. I only use them for regular payments, most of which are automated. The obvious exceptions for me are the cleaner and the veg box. I have these as scheduled and just change the balance to £nil for any cancellations. They are both fortnightly and I schedule them to assist budgeting rather than cashflow as they're small fry.

      As I said above the fact that I use CC for 95% of other payments makes this really easy. When I get the statement I update the balance on the scheduled transaction for that card. Once I've done that I just look at the running balance through the month and see if it's going to drop below £1k.  Any extra goes to a savings account. Decisions about moving money backwards and forwards between checking and saving are based purely on the running balance. If interest rates are good I monitor it closely and move money around more often. If they're really good I lower the minimum balance. At the moment, they're so bad  that I'm happy to be reasonably lax about it but I still prefer not to keep too much money in there because of fraud risk.

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      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 2 mths ago
      • 1
      • Reported - view

      Dave Pro-tip that someone else on here told me about that has saved me lots of hassle, if you schedule monthly payments that change every month (utilities, credit card statement balance auto payment) then put the month for the new transaction in the memo field so you know if you updated the amount or not.  That's helpful  I also learned recently that you can also right click and  hit "enter now" so you can enter this months as a separate transaction, then it will already have next month's up in the register and you can correct it for the new balance.  I usually just put the month for the payment in the memo field though.

      Like 1
    • TheTabby
    • Just a common cat trying to budget uncommonly well.
    • TheTabby
    • 2 mths ago
    • Reported - view

    I move money out of checking when it reaches roughly 2x my monthly budget.  Not 2x my normal spending, but 2x the income.  This gives me breathing space for months when those periodic expenses come to roost.

    I move money back into checking when the checking account gets to be ~50% of a monthly budget.

    I don't really have a specific frequency I check on, though if I hit the 2x budget mark right at the end of the month, I ignore it cause I know there are big bills coming out on the 1st (rent and daycare).

    Hope this is helpful!

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