Checking account tango, or, The peace of mind from always knowing your balance

So I applied for a KeyBank checking account in order to get the free iPod nano, and was thinking of what I should use the account for, or whether it would be better just to wait and close it after enough time had passed. My first idea was to put $200 or so in it, and just leave it there, for "uber-emergency" money - ie if I needed money NOW and couldn't wait for it to be transferred from ING. I had a $200 savings account cushion at Fifth Third, but at the credit union you only have to keep $25 in your savings account (it's your "share" account, ie your membership stake.) So I'd want to have a little money there too. Not that I foresee having that many emergencies, but hey, no emergency is foreseen.

The other idea I had was to use the account for revolving bills that are generally billed to my credit card. I know that these expenses come (the cell phone bill, Netflix, and Lingo accounts) but I still get a little upset when there are charges to my card that I didn't precisely make. (Well, I ran up the charge, but it's not like I handed my credit card to T-Mobile.) So I might feel a little better if I had a direct deposit going to that account that would cover those charges, so I wouldn't have to pay the credit card every month. I don't want to have them auto-charged to my regular checking account because that would drive me nuts in a very short period of time, when $60 goes missing and it takes me a while to remember where it went. (Also, sometimes it gets down that low, especially when we are close to the end of the month and we just went on a big food shopping trip or something, I don't bother transferring in any money since we're not likely to need to spend any more before I get paid again.)

I have a great online direct deposit system where I can divert my pay (by percentages, not fixed amounts unfortunately) into any account I want. I don't think that they even have a maximum, because at one point I had money going in four different directions at once. (My obsession with multiple accounts at ING.) I think it would make me a lot calmer and happier to not have charges appearing on my credit card, and to have a checking account dedicated to this purpose. Also, over time extra will build up (because I can't allocate in my direct deposit the precise amount that will be needed) and that will be a nice cushion if I need it.

So here's what I'm going to do. I'm actually going to go all the way and have ALL of the money that I need for bills, other than rent, deposited into the Key account and all of the bills will be paid out of there. They have a great online system (I used to have an account before I moved) so it should be pretty easy. My regular checking account (at the credit union) will contain just rent money and the spending money for the month. Boyfriend writes me a check for his half of the rent plus parking pass and half the cell phone bill, but during the regular school year, since he gets paid the same day I do, the check doesn't actually make it to the bank for a day or two. So I need to be able to cover the whole rent out of my regular checking and still have some money left over.

Here's my fixed expenses:

Netflix - $13
Phone bill - $57
Newspaper - $5
Lingo - $10
Student loan - $150
Credit card - $250
Electric bill - $75
Gas - $15
Roth IRA - $125
Total: $700


Obviously in the winter I will have to raise the allocation a little for the gas bill going up.

So here's where the money will go. I have to divvy things up by percentages since that's how my direct deposit works, and 1% is about equal to $18.

KeyBank - $702 or 39%
ING: $162 or 9%
Normal checking: $936 or 52%

Our rent is $695, so that will leave me a comfortable margin of about $240 in the account between when I write the rent check and when Boyfriend's check clears in my account. Then I will have about $660 to spend for the month on all non-bill items, which I think is a good amount. I was budgeting $500 before and always ended up a little over. (Since I make more than Boyfriend, I buy all the groceries.) I spent a while playing around with the percentages, as I decided how much should go to savings and how much to the Roth and how much to the credit card. I had originally set the savings at $198, but decided to up the debt payment instead. Which actually worked out quite nicely because now the actual needed amount for the Key account is $700, and what will actually get deposited is about $702, so the extra $15 can go into savings instead.

I am extremely pleased with myself! I bet you can tell. With this system, I won't have to worry about anything clearing. All of the bills will just zip out of the Key checking account. And I'm also bumping up my savings and debt payments - my minimums are actually $137 for the student loan and $140 for the credit card. I really want to get my emergency fund up to a good size, so once I do, then I'll probably cut down the ING contribution and put it towards debt. But it just makes me really happy to know that I won't have to put anything on my credit cards anymore, won't have to pay them off even for the automatic things anymore.. it'll be great.