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Poll idea – how much do you keep in the bank

Home Personal Finance and Budgeting Poll idea – how much do you keep in the bank

  • Avatar zdr81 
    Participant
    Status: Physician
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    Joined: 01/27/2016

    I am curious (and I’m sure others are) how much some of you consider adequate enough to keep in liquid cash (checking/savings). WCI, is this a fair question to add for a poll? Thanks!

    [Your wish is my command.-ed]

    How much do you keep (currently have) as cash in the bank?

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    #25956 Reply
    Avatar DarrVao777 
    Participant
    Status: Physician
    Posts: 158
    Joined: 04/12/2016

    I keep 100000 combined in checkings/savings thanks to the minimum 50000 required by my bank

    I’m thinking of switching banks to eliminate that minimum but I’d still need to keep 50000 in it (3-6 months emergency fund)

    Not sure if the opportunity cost of 50000 is worth switching around all my direct deposit / auto pay information though

    #25958 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
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    Joined: 01/12/2016

    I keep 100000 combined in checkings/savings thanks to the minimum 50000 required by my bank

    I’m thinking of switching banks to eliminate that minimum but I’d still need to keep 50000 in it (3-6 months emergency fund)

    Not sure if the opportunity cost of 50000 is worth switching around all my direct deposit / auto pay information though

    Click to expand…

    Wow, thats a serious requirement.

    May take a couple hours but could be worth it depending on your other relationships and benefits at the bank.

    #25969 Reply
    Liked by DarrVao777
    Avatar jhwkr542 
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    Status: Physician
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    Joined: 02/15/2016
    Splash Refinancing Bonus

    https://www.bogleheads.org/forum/viewtopic.php?t=109250

    Obviously a different population but bogleheads has had similar threads. We keep about 10-15k in checking and the rest goes towards loans or an ally account we have set aside for a house down payment.

    #25975 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4601
    Joined: 05/13/2011

    https://www.bogleheads.org/forum/viewtopic.php?t=109250

    Obviously a different population but bogleheads has had similar threads. We keep about 10-15k in checking and the rest goes towards loans or an ally account we have set aside for a house down payment.

    Click to expand…

    Ally is a bank.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #25977 Reply
    Liked by Craigy
    Avatar Dicast 
    Participant
    Status: Physician
    Posts: 415
    Joined: 01/09/2016

    We keep about $30-40k and generally pay it down to the $30k at the end of each pay/billing period.

    Get outside of your bubble.

    #25978 Reply
    Avatar jhwkr542 
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    Status: Physician
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    Joined: 02/15/2016

    Yes, but I didn’t want to skew my answer because I took the OP’s question to imply how much on hand for regular spending day to day, month to month. If we weren’t saving up for a house, that account would be close to nothing and the answer would be 10-15k since any amount above that would go towards loans.

    #25981 Reply
    Avatar shantster 
    Participant
    Status: Physician
    Posts: 116
    Joined: 01/16/2016

    $10K is my emergency fund in a money market account. I have a minimum for one checking account of $500 and keep $500 at all times in a second checking account as I gain 7.5% interest up to that amount. My minimum at the end of the month is $11K and I try to stay as close as possible to that point with all excess going to the student loans.

    #25982 Reply
    Avatar zdr81 
    Participant
    Status: Physician
    Posts: 22
    Joined: 01/27/2016

    Should have been more specific – this is for your daily expenditures and emergency savings accounts, the balance you expect to keep at all times throughout the years. Not the money you are saving aside for a home loan, etc. On a side note, the results are looking like it’ll be a double bell curve with the lower end for residents/junior attendings and the other for established physicians with no loans. My reasoning for this question was to figure out how much extra should go into taxable accounts, having maxed out the tax-advantaged accounts and with all loans paid off. Thanks to all participating and to Jim for setting this up!

    #25999 Reply
    Liked by MochaDoc
    Avatar DarrVao777 
    Participant
    Status: Physician
    Posts: 158
    Joined: 04/12/2016

    Should have been more specific – this is for your daily expenditures and emergency savings accounts, the balance you expect to keep at all times throughout the years. Not the money you are saving aside for a home loan, etc. On a side note, the results are looking like it’ll be a double bell curve with the lower end for residents/junior attendings and the other for established physicians with no loans. My reasoning for this question was to figure out how much extra should go into taxable accounts, having maxed out the tax-advantaged accounts and with all loans paid off. Thanks to all participating and to Jim for setting this up!

    Click to expand…

    I think you are right, I’m on the established attending side.

    I don’t have much in the way of available tax-advantaged accounts so I’m usually done contributing to those by January (1 Roth 401k, spouse’s traditional 401k, HSA, backdoor Roth IRAs, child’s 529)

    Otherwise, the distribution roughly resembles:

    – 30% to taxable

    – estimating 30 to 35% to the taxman

    – an additional 20% to taxable on the months we can swing it (e.g. paycheck is higher than expected, expenses lower than expected, no vacation time)

    – living off of the remaining 15%. This is the amount we use to replenish the 100000 in checkings/savings. Student loans are gone, 2 small mortgages (that should be gone by mid 2017) and 2 medium sized car leases (I know, I know, please put down the pitchforks) which is why our monthly expenditures are probably larger than most in this forum and which is why we felt the need to keep more in cash

    #26000 Reply
    Liked by hatton1, Docbeans
    uptoolate uptoolate 
    Participant
    Status: Physician
    Posts: 277
    Joined: 01/31/2016

    Minimum balance requirement is 5k so I am usually between 6 and 12k on the personal side.

    #26001 Reply
    Avatar Sneezy 
    Participant
    Status: Physician
    Posts: 91
    Joined: 01/11/2016

    Apparently not enough  http://www.wsj.com/articles/the-more-cash-people-have-the-happier-they-are-1473645781

    I aim for 30k which is enough to buy a car should I need one (WCI would be proud as mine is 12 years old and could die)

    #26064 Reply
    Avatar patsnation 
    Participant
    Status: Other Professional
    Posts: 5
    Joined: 09/18/2016

    If I may….what checking accounts are requiring you to keep a 50k minimum balance?  That’s crazy to me. Do they give you kind of crazy loan rate for that or other perks? I have a no minimum checking account at a local bank that allows free bill pay, etc. I just pay for checks (minimal as I write less than 20 per year at this point).  Why use an account with requirements like that? I just feel like I would be frustrated having such a large amount of money that I could theoretically never access.

    I am still paying down student loans, so I keep closer to 1k in checking (enough to cover a mortgage payment if my paycheck ever didn’t get deposited correctly, etc) and 10k in savings. Rest goes to student loans or retirement (maxing HSA and Roth IRA).

    #26421 Reply
    Avatar DarrVao777 
    Participant
    Status: Physician
    Posts: 158
    Joined: 04/12/2016

    If I may….what checking accounts are requiring you to keep a 50k minimum balance?  That’s crazy to me. Do they give you kind of crazy loan rate for that or other perks? I have a no minimum checking account at a local bank that allows free bill pay, etc. I just pay for checks (minimal as I write less than 20 per year at this point).  Why use an account with requirements like that? I just feel like I would be frustrated having such a large amount of money that I could theoretically never access.

    I am still paying down student loans, so I keep closer to 1k in checking (enough to cover a mortgage payment if my paycheck ever didn’t get deposited correctly, etc) and 10k in savings. Rest goes to student loans or retirement (maxing HSA and Roth IRA).

    Click to expand…

    Citigold requires a 50k minimum balance. There are a whole bunch of perks, zero that I use, I guess free checkbooks are nice but I go through a checkbook once every 5 years.

    I haven’t changed simply out of sheer laziness. My parents were the ones to get me started on my financial journey with that Citigold account in high school. I was able to keep that 50k balance by having a brokerage account compromised of individual stocks (all linked accounts need to be > 50k) but ended up moving most of my investing to Vanguard. I now keep 50k in cash as my emergency fund. Everything from direct deposit to auto pays come out of that account so that is what has prevented me from changing banks (the laziness of having to reroute everything)

    In truth, that 50k makes up less than 5% of my net worth so with each passing year, I worry less and less about the opportunity cost of simply parking 50k there.

    If and when I do switch, I would prefer to be with Ally (better interest rates, a much smaller or no minimum balance if I recall correctly)

    #26429 Reply

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