What is a good safety net amount of money one should keep in their debit card account at a time?

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Posted by Lily Chait (MONEY FORUMS: 4, Answers: 3)
Asked on February 14, 2016 12:10 pm
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I like to have a buffer the size of my largest regular payment. For most people, this will be rent, the mortgage, or perhaps a regular tax payment. My reason for this is that if my autopay accidentally debits the payment twice, I will still have money in the account and I don’t have to unravel a mess of bounced payments or late fees; I only need my money returned to my account.

Like Beth said, this isn’t an emergency fund, it’s just a buffer, and it should be somehow proportionate to your regular income and expenditures. A more robust emergency fund should be a top financial priority and about 3-6 months of expenses is the most common recommendation.

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Posted by Hannah Rounds (MONEY FORUMS: 1, Answers: 54)
Answered: February 14, 2016 3:27 pm
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Lily, my take is that it is less about a particular dollar amount and more about how much you typically spend in a month/payment cycle, and how much you have in (a linked) savings account or other checking account. The most important thing is to set up account alerts when your balance drops below a certain amount. We can consider the balance alert amount to be your “safety net” amount. My suggestion would be if you earn/spend $500 in a month as a student, you set the alert to $100 or 20% and make that your buffer. Hopefully you have another account you can transfer money from if you have an emergency expenditure. Ultimately, you will want to have 3-6 months of living expenses in a savings account that is easily accessible to but not IN your regular checking/debit account for emergencies.

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Posted by Beth Tallman (MONEY FORUMS: 1, Answers: 61)
Answered: February 14, 2016 2:26 pm
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