How should i distribute my money in my bank accounts?

Question

is there a general rule of thumb for how i manage my money? i'm 18, work a minimum wage job while attending school and my pay checks aren't very big and i just recently opened a checking account along with my savings account. whats the best way i can put money in both accounts while still keeping it balanced?

Answer 1

You should save everything that you will not use for paying bills, but in a general rule, you should save at least 30% of all your income. Just think like this: imagine if something happened and you could not work for 3 months. How much you need to save to pay all your bills during this period? That's your minimal to be saved and afterward you should save at least 30%.

Consider using a CDC instead of savings account. You can definitely make more money in Interest Rate.

Answer 2

John Bradley stated everything very well.  I would only add that you should make sure you're not getting charged any fees for having a low savings account balance.  And also, ask you bank if they can connect your savings account to cover any possible overdrafts on your checking account.  Of course, it's best to avoid overdrafts at all costs but it's nice to have the protection in place if something happens.

Good luck to you.

Answer 3

EVERY month, write a budget for THAT month.  List what you will do with EVERY penny you will make that month, including savings.  Stick to the budget and you ARE balanced.  Just IGNORE the savings account once the money is there.

I must disagree with Andrea.  Absolutely DO NOT link the savings account as overdraft protection.  If you do, you WILL overdraft the checking account.  The more difficult you make it on yourself to deal with overdrafts, the more likely you are to AVOID overdrafts.

Answer 4

You're young, so hopefully you don't have too many bills.

First, make sure you have direct deposit into your checking account.  Save on bank fees by making sure that you have a free checking at a bank with plenty of ATMs around your town.  If you don't, switch accounts and/or banks.  Very few do not offer free checking.  

Second, keep a register and do not under any circumstances play any games with the bank.  Keep a register, and do not play float games.  Do not mail a check without the funds already being in the bank expecting to beat the check you wrote to the bank.  If you don't beat it, than it's not just one $35 NSF fee, but it'll probably be several $35 NSF fees for the small debit card purchases that posted to the account the same day as the check.  Again, play no games.  No money in the bank right now, make a deposit FIRST.

And finally, pay yourself first.  Have your bank transfer money into your savings account automatically every month.  This can be as low as $25, but make it as much as you can.  From what is left over, pay bills for that month.  Whatever is left is your discretionary fund.

Start off with these basics first.  Your young, you don't need thousands in the bank, yet.  But start towards that goal gradually while developing good savings habits today.