Right now, I have $31 in my chequing account, and that’s just about normal for me. I never go below about a $25 buffer, or above $50 … I hate the thought of that much money wasting away for nothing, when it could be earning me interest in a savings account. So I keep the smallest amount possible that I’m comfortable with.
Like a few other PF bloggers out there, I’m one of those people who pays for everything with a credit card. Of course, I don’t carry a balance, and I pay it off before the end of the month. Using a CC for everything requires a lot of discipline I think, because it’s so much easier to lose track of my spending this way. Luckily I keep all my receipts and enter them into Quicken ASAP, so I know exactly how much I’ve spent before I get the statement in the mail. Plus, I think using credit cards for everything is worth it for the 1% cashback on my Visa, and free grocery points on my Mastercard (I get 10 pts. for every $1 spent. 10,000 pts = $10 in groceries). It may not seem like a lot for a rewards card, but it’s money I would have never gotten had I paid with my debit card, or with cash.
Speaking of cash, I rarely ever carry that stuff. I’ve got $14 in my wallet right now, and that’s because I took out $25 to go to a library book purge the other night (I got 10 best-seller hard cover books for only $11!!!) … having cash makes me want to spend it, even though I hear it’s supposed to make you less likely to spend because you’re physically holding the money (instead of using a card).
My reasoning behind keeping so little in my chequing account is that there are very few emergencies that can’t be solved by using a credit card. The only time it would be beneficial to keeping money in my chequing is to pay for our purchases at Costco, but the BF keeps money in his chequing for that (or his dad comes along and puts it all on his Amex).
So I’m interested, how much money do you keep in your chequing account to make you feel comfortable? Do you usually use cash, credit or debit to purchase things?
**EDIT** I should clarify that I don’t have any bills on auto-payment, so there’s not much chance of me over drafting since I update Quicken every time I spend money, write a cheque, or pay a bill. I have reminders set up in Quicken to alert me at certain times of the month when a bill is coming up, and I pay them on the next pay cheque. I thought this was the way most people do things, but as I’m reading all of your comments, apparently I’m the odd duck of the group! :)
This is strange. So I bought my computer last Sunday. A few days later I went to check my Visa online. I saw that the entire $3100+ was pending, and the available credit reflected that amount. But it hadn’ t actually posted the transaction yet. That seemed normal. However, now all of that credit has been released (the CC is back to its original amount of ZERO), and I don’t have any money pending. What happened? How did it go from reflecting the purchase on my card, to no sign of the purchase at all? And according to FedEx, the package has been shipped and is set to arrive on Tuesday, so my payment must have gone through (otherwise they wouldn’t have shipped it) … maybe it’s too early in the morning, but I’m in total WTF-mode.
Maybe my wildest dream has really come true – there was a glitch in the system, and I’m really going to get the computer for free! Oh, wouldn’t that be the greatest thing in the world? Sigh, but it’s probably not true. Visa’s probably just teasing me. Damn you Visa, DAMN YOU!
I got paid today (hoorah!), so I updated my totals on the sidebar. You might notice that my line of credit is still sitting at 0% paid off. I put my new computer purchase of $3,152 onto my Visa card last week, with the intention of paying it all off with my line of credit. However, the transaction has yet to post to my Visa, so it leaves me in financial limbo at the moment. As soon as it posts, I’ll transfer the entire balance over. But since it hasn’t for this pay cheque, I’m not going to make a huge payment to my LOC, which currently has a zero balance. So instead, I put $1,000 towards my student loan debt, and now it’s over 80% paid off! w00t! In 2 weeks when I get paid again, I’ll make up for it by putting $1,000 towards the line of credit debt.
My direct transfer contributions to my RRSP and my Condo Down Payment fund will happen tonight, so I”ll post the updated numbers tomorrow. Hopefully the TSX isn’t such a bitch today.