Your checking account is the hub of your financial life—used for paying bills, buying groceries, and managing everyday spending. But how much money should you keep in it?
General Rule of Thumb
Keep enough to cover:
- One month of regular expenses (rent, utilities, food, subscriptions, transportation)
- An extra buffer of $100–$500 to avoid overdraft fees or unexpected charges
This ensures your bills are covered while reducing the temptation to overspend. For example, if your monthly expenses total $2,000, aim to keep at least that amount plus a cushion—around $2,500 total—in your checking.
Why It Matters
Overdraft fees, bounced payments, and denied transactions can cost you money and stress. Keeping the right balance avoids those pitfalls and gives you confidence in your daily money management.
Already have a savings account? Make sure you know the difference between checking and savings.
What If You Keep Too Much?
Checking accounts usually earn little to no interest, so excess funds just sit idle. Once your bills and buffer are covered, move the extra money into savings or investments to grow your wealth more effectively.
For a full overview of all account types, check out Types of Bank Accounts Explained.