Whats a good guideline for how much to keep in your checking account before moving it to savings?

I have my checking account at a regular bank and my savings account with another bank (mainly because of higher interest rates). I'm curious to hear opinions as to how much I should maintain in my checking account (above what is needed to pay the bills) before moving it off to my savings account or other investment.

I realize everyone's situation is different so an actual dollar amount is probably meaningless. I'm looking for a general guide line such as an amount equal to the largest check you write each month or something like that. For what it's worth, I pay my largest bill (rent) with a money order because the checks often take 3 weeks to clear.

Generally speaking, the so called rule of thumb is to set aside, save, and invest 10% of your earnings/net pay. I used to teach a personal finance class and all of the reviewed and widely accepted theory says something along the following:

First you need to set aside a minimum of 10% of your earnings to a savings account until you have enough set aside to sustain you, in the event you became unemployed, for 6 months. In other words, your readily accessible savings should equal 6 months net pay. After you have an amount equal to 6 months net pay in a savings account or CD that's easily accessible, you should continue setting aside 10% or more into investment accounts/vehicles (401k is a great thing for this if available because it reduces your taxation) to save for eventual retirement.

This is probably more info than you asked for, but it is what we teach. Btw, your checking account is really nothing more than a easy means to pay bills and make discretionary purchases. A checking account could really just be considered a "convenience" account. Hope it helps.

After you pay for all your bills and entertainment/activities you should put the rest in savings.

Let me answer with an extreme example.

My paycheck is auto deposited into a 4% savings account. I then move the money from savings to a 0% checking in time to cover the check I wrote to pay a bill.

This example indicates your checking balance should be $0 after the bills are paid. Get the "extra" money out of the checking account and into something that pays interest. Then the interest bearing account can be used for saving for retirement or building an emergency fund.

Just plan careful enough that you don't miss a transfer in time to cover a check you wrote - one insufficient fund charge can easily offset your 4% interest you've been earning!

My rule of thumb is this: one month's of bills. If you "get ahead" one month on paper, then you know you'll always cover your checks. This then becomes a one-time loss of earning interest, but it gives you that cushion. Consider a two-week amount if your bills are fairly level or based on how often you get paid (weekly, bi-weekly).

Hopefully I've given some ideas to consider.

Good question...it shows you are thinking.