This blog is for informational purposes only and not an offer of any specific account or service. For current details on our checking accounts, including terms and fees, please visit midflorida.com or speak with a representative. Account features and conditions may change. Membership eligibility required.

A checking account is much more than a place to keep your money. It can be a fund for upcoming expenses, an emergency savings fund, or the stepping stone to taking control of your finances and budget. This may leave you wondering, “How much money do I need in my checking account?”.

Unlike your savings account, the ideal checking account balance depends on your unique financial picture.

But fear not! There are some golden rules to prevent overdraft woes and ensure you're always prepared for life's little surprises.

Start your application with MIDFLORIDA Credit Union.

Cover your monthly expenses

The first guideline for knowing how much money you need in your checking account is simple: You must have enough to cover your monthly costs.

In other words, your checking account should have enough money in it for fixed expenses such as:

• Rent
• Utilities
• Loans
• Subscriptions
• Insurance premiums

However, you should also keep enough money in your checking account for variable monthly expenses.

These include:

• Groceries
• Restaurants
• Clothing
• Entertainment
• Miscellaneous expenses

Give yourself a buffer

In addition to covering your monthly expenses, you should also give yourself a buffer, ideally equal to one month’s worth.

A financial buffer has several benefits:

• You’ll be less likely to overdraw your account and get hit with overdraft fees
• You won’t incur a maintenance fee if your checking account has a minimum balance requirement
• You’ll make sure you have the money to pay your bills on time, which can increase your credit score
• You won’t have to worry about paying late fees due to missed bills
• You’ll get peace of mind knowing that your expenses are completely covered

It’s also worth pointing out that having a buffer in your checking account means you’ll always have some extra money available if you need it.

While many emergency services accept credit cards, getting cash when needed is reassuring.

How much of a buffer should you have in your account?

If money is tight, though, don’t worry about simultaneously having an entire month’s worth of expenses. Instead, start small.

For instance, start by ensuring a buffer of 10% of your monthly expenses, then gradually build it up until you have enough money to cover a month.

Tips to manage your checking account balance

Of course, it’s one thing to say how much you need in your checking account. It’s another thing to ensure that money will be in your account month after month. Fortunately, there are some foolproof ways you can accomplish this.

• Make a budget for your monthly expenses: Once you’ve created a balanced budget, you can simply ensure the amount is in your monthly checking account.
• Set up Direct Deposit: Once you know how much cash you need in your monthly checking account, you can set up Direct Deposit to automatically put that amount in your account. If you get paid biweekly or even weekly, all you have to do is divide your total monthly expenses by the number of times you get paid in a month and have that amount automatically sent to your checking account. The rest can go to your savings.
• Open multiple checking accounts to track where your money goes: You can use one checking account for your fixed expenses and set up Bill Pay to use that checking account to pay them each month automatically. You can use your second checking account to pay for your variable expenses. Don’t forget to put money in it like you would with your checking account for fixed expenses!

Why you shouldn’t keep too much money in your checking account

Isn’t the best way to ensure you always have enough money in your checking account to keep all of your money in it?

This is a good idea in theory, but the reality is that if you keep all your money in a checking account, you’ll miss out on many opportunities.

You won’t be able to take advantage of the higher interest rates that a savings account or certificate of deposit offers, for instance. That can add up to hundreds, if not thousands, of dollars lost over time.

Keeping all your money in your checking account also leaves it vulnerable to thieves. If someone manages to get your debit card, they can potentially drain your checking account of all its money.

Once you have enough money to cover your monthly expenses, your best bet is to transfer some money to your savings account while building up your buffer.

Get a checking account at MIDFLORIDA today!

How much money do you need in your checking account? While the answer depends on your income and expenses, a good guideline is to have enough to cover your monthly expenses plus a little extra.

You should ideally have a second month’s worth of expenses to protect yourself against overdrawing your account.

You can get a good start toward having enough money in your checking account when you become a new member of MIDFLORIDA credit union and get $200 by signing up for Free Checking.¹

You’ll also get the services big banks offer, with the personalized service only a credit union can provide.

Further Reading Recommendations

Do You Need Multiple Checking Accounts? Pros and Cons

Click to Read More

5 Tips for Finding the Right Checking Account Features

Click to Read More

Should You Open A Bank Account Online Or In Person?

Click to Read More

¹Offer valid as of July 15, 2024, and may be canceled at any time. MIDFLORIDA Credit Union membership and eligibility requirements apply. See associate for details regarding fees and terms. To qualify for the $200 incentive, you must open a new Free Checking account with direct deposit ($500 cumulative which must post within 60 days of account opening); accept and open online banking, online bill payment, eStatement, and a debit card; and complete 5 debit card purchase transactions in one calendar month (to be completed within the first 60 days of account opening). No dividends are paid on Free Checking. Annual Percentage Yield is 0.00%. Limit one incentive per Social Security number. Past checking account holders and previous recipients of checking account incentives are ineligible. The incentive will be deposited to new Free Checking account after the qualifications have been met, and will be reported to the IRS. Minimum to open Free Checking is $50.