Do you pay your bills out of a savings or checking account?

[Minnesota!]

I have certain bills set up out of savings - but, I have a savings for each bill (utilities, mortgage, student loans, insurance, security system, etc.). So, the only transactions in each are what I direct deposit in each month, then the 1 transaction for it to be withdrawn.

Other bills that are not a set amount each month - credit card, doctors, etc. come out of checking. I set them up 2 days prior to payday, when I can view my pay slip at work.

 

[StacyStrong]

I pay my bills with a credit card to get the cash back and then use my checking to pay off my credit card in full every month.

 

[NYCgrrl]

Reading my credit report was interesting. It shows loans, and accounts at institutions that I have never ever had any dealing with. But those are the companies that bought up the original banks, etc. Sometimes DECADES after the loan was paid off.

Good reason to check your credit history regularly. When creditkarma.com opened about 15 years ago, I signed up immediately so I could check my history's accuracy at will. Free cost and no time limitation. Errrrr also useful for "winning" in-house discussions about finances.

 

[tvguy]

Good reason to check your credit history regularly. When creditkarma.com opened about 15 years ago, I signed up immediately so I could check my history's accuracy at will. Free cost and no time limitation. Errrrr also useful for "winning" in-house discussions about finances.

Yeah, I recognized all the loan AMOUNTS, and they were correct. But the names of the lenders weren't who I borrowed the money from originally.

 

[tzolkin]

Just noticed that "Other" has jumped to 11% on the poll, but haven't seen anyone give an answer other than checking or savings, so now I'm curious how the "other" people are paying for things.

I did see one poster mention paying for some things out of saving and some checking, so maybe "Other" just means both?

 

[Carlymouse]

She did, and they won't wave the late fees.

Bummer! Sorry to hear that.

 

[NYCgrrl]

Yeah, I recognized all the loan AMOUNTS, and they were correct. But the names of the lenders weren't who I borrowed the money from originally.

Bank consolidations can do that for you. As a teenager, I opened an account at Chase Manhattan Bank. They got on my nerves when I deposited a tax refund check and it took in excess of 3 weeks for it to clear so I closed the account in a huff right out of a scene from "Mary Poppins" and went to Manufacturers Hanover Trust. Stayed there for years until they were purchased by Chemical. Then Chemical was eaten by Chase frmrly known as Chase Manhattan. By then I was older and figured out that there was no escaping, LOL. I no longer argue with banks since life's too short and too few of them still exist.

 

[nkereina]

All of my transactions are done out of my checking account. I have my direct deposit set up so a set amount each pay period goes into my savings account, and the remainder goes into my checking account for bills, purchases, etc.

My parents do it the opposite - all of their money is deposited into their savings account, and they transfer a lump sum to their checking account on the first of each month to cover that month's bills and auto drafts. They pay cash or credit card for everything, and payoff their credit card out of their savings account once a month.

There's no right or wrong way to do it, but the 6 transfer limitation will be in place at any bank. Its because a savings account is meant for savings, not transacting. I would encourage her to turn off her auto pays for now and open a checking account. If she doesn't want to change her direct deposit, have her open a checking account and just do a lump sum transfer once a month, paying the bills out of the checking account going forward.

 

[Moliphino]

Sometimes you want a safe place to vent to someone. I know there are tears when I get angry sometimes and tears when I get frustrated sometimes, and there are more likely to be tears if I am angry and frustrated with myself for messing up when I feel I should know better. It doesn’t necessarily mean she’s looking to them to fix the situation or that she feels incapable of handling things herself. She was just having a bad day . . .

All of that and maybe she needed some guidance on what she should do. I know I go to my parents often enough for help in new situations (I also just bought a house for the first time, I had A LOT of questions).

 

[tvguy]

All of that and maybe she needed some guidance on what she should do. I know I go to my parents often enough for help in new situations (I also just bought a house for the first time, I had A LOT of questions).

She was frustrated. She has worked for 3 years to establish credit and save money to buy a house. She had to buy a car on credit to establish her credit. Paid it off in 9 months. That got her qualified for a mortgage, then she had to find a property she liked and could afford at the low price end of the market in a hot market were houses sell within days if not within hours of being listed. Now that she has the house, she felt things were finally settled, then these little surprises caught her off guard. But that comes with homeownership

 

[skyblue17]

I've always used my checking account vs. savings account because otherwise, what's the purpose of the checking account? The savings account should be used if only necessary, whereas the checking account holds funds for everyday expenses and bills. That's replenished by a directly deposited paycheck.

 

[fla4fun]

Just noticed that "Other" has jumped to 11% on the poll, but haven't seen anyone give an answer other than checking or savings, so now I'm curious how the "other" people are paying for things.

I did see one poster mention paying for some things out of saving and some checking, so maybe "Other" just means both?

I did see one or two mentions of investment accounts, but not sure how you would use one to pay regular recurring bills.

 

[StacyStrong]

Just noticed that "Other" has jumped to 11% on the poll, but haven't seen anyone give an answer other than checking or savings, so now I'm curious how the "other" people are paying for things.

I did see one poster mention paying for some things out of saving and some checking, so maybe "Other" just means both?

I used other to indicate that I pay the actual bill with a credit card rather than directly from either account.

 

[tzolkin]

I did see one or two mentions of investment accounts, but not sure how you would use one to pay regular recurring bills.

Right. I don't think people are paying their utilities directly from an investment account, so that's why I'm confused what the other options are.

I used other to indicate that I pay the actual bill with a credit card rather than directly from either account.

Gotcha. I pay for almost everything with a credit card, but I still pay the cc bill out of my checking account so in my mind that would still count as being paid from the money in my checking (instead of savings). I also have a few bills that don't allow cc payments so those auto draft from my checking as well.

 

[msjprincess]

My Fidelity Brokerage account allows me to pay bills if I wanted to.

 

[mrodgers]

Just noticed that "Other" has jumped to 11% on the poll, but haven't seen anyone give an answer other than checking or savings, so now I'm curious how the "other" people are paying for things.

I did see one poster mention paying for some things out of saving and some checking, so maybe "Other" just means both?

Lots of others have stated credit card for bills, then pay the credit card at the end of the week/month with the checking account.

It's what I do as well. Rent is a check, car payment and loan for my furnace is electronic from checking, and everything else is on the credit card and I send money from checking to the card for what I purchased the previous week on Fridays.

 

[tzolkin]

My Fidelity Brokerage account allows me to pay bills if I wanted to.

I know for many you can make a payment from them. I just can't imagine someone choosing to not have a checking account at all and paying for every bill out of an investment account.

Lots of others have stated credit card for bills, then pay the credit card at the end of the week/month with the checking account.

It's what I do as well. Rent is a check, car payment and loan for my furnace is electronic from checking, and everything else is on the credit card and I send money from checking to the card for what I purchased the previous week on Fridays.

To me, that's still paying bills (even if it's just the credit card bill) out of your checking account. I pay for most things with a cc to earn rewards, but I would select "Checking" in the OP poll not "Other" because the money going to pay for that ultimately comes out of my checking account. I guess that's why I was confused.

 

[Mackenzie Click-Mickelson]

Just noticed that "Other" has jumped to 11% on the poll, but haven't seen anyone give an answer other than checking or savings, so now I'm curious how the "other" people are paying for things.

I did see one poster mention paying for some things out of saving and some checking, so maybe "Other" just means both?

I think other could be combination methods like you may not be using every bill you ever get with your checking. I selected Other because of that.

We pay our normal utility bills via a joint checking EFT each month, escrow shortage once per year is from our money market account though mortgage each month is out of our joint checking, insurance is EFT from my husband's checking and we have it set up as a 1-pay for both auto and home which are both 12month policy terms, (ETA: forgot about life insurance which is also out of joint checking each month), everyday purchases and then bills from services (like mechanic, repair stuff, etc) as well as normally travel expenditures on our SWA CC which are then paid off each month. Prior to having our SWA CC we used more our Delta CC and while we still use our Delta CC every so often mostly we use the SWA CC because the points are better utilized there.

 

[disykat]

Interesting. I can still see my youngest son's bank activity since I was a cosigner on his accounts and he hasn't changed them yet. I've noticed he has his paycheck deposited into savings and transfers money to checking. His auto pays also come out of savings. The opposite of how I've always done mine.

I need to remind him to get me off his accounts!

 

[bethbuchall]

A few years ago, the credit union decided that all ATM cards would also be debit cards. I personally have only a savings account (I do have a joint checking account with my husband, but that has a separate ATM card). I was never informed that there was any sort of limit to the number of debit transactions that I could make in a month with that debit card. I don't believe in debit cards, especially linked to savings accounts, so I went in and told them that I wanted the card to be just an ATM card. At first they told me that was no longer how they did things and that it would have to be both. Once I elevated the discussion, they agreed to disable the debit card in the computer system so that it cannot be used. But there was never any mention of being able to use the debit card a certain number of times per month.

My youngest son is still in college. His credit card bill is paid from his savings account every month, but that's the only bill that is paid that way.