Even if your bank posts credits first, if they post debits by largest first, think about what that can do to you. Let's say your rent payment at the end of the day overdrafts your account by $100. And let's say that on the same day you made six small $5 - $10 purchases. Instead of one overdraft (which you might have calculated and accepted as the cost of managing your finances that day such as due to an unexpected expense), you would get one overdraft for the big transaction and then five more besides, one for each smaller debit. Yikes!
In my opinion you should be aware of these risks, and always consider the potential effects of something happening by accident.
Next, what if the company processing your employer's electronic payroll transfers has an issue and is late? What if your employer suffers a power outage, or a site incident, or even simply switches payroll providers, and the normal processes get delayed by a day or two? Or some holiday foul-up happens. Or any one of a number of things.
Personally, I get extremely nervous if I don't have at least $3,000 in my checking account, and I prefer to have quite a bit more. This has saved me multiple times when I made some boneheaded mistake, or someone else did (such as one day when the credit card representative swore up and down that the other payment I'd tried to submit was not in the system and would NOT post, but she was wrong, and two multi-thousand-dollar payments posted). The other day, the rent payment system my landlord is using double-charged me for rent. It was nasty, but I could handle it. Or let's say you're on vacation and your car breaks down. You might need that cash. Of course, a credit card protects you, but who knows what situation you'll encounter or whether your credit card won't be having some problem, itself (such as your bank thinking fraud is going on because you forgot to tell them you were traveling)?
The interest you lose by having that money out of savings and available to you will be far smaller in your lifetime than the money you save by avoiding fees, hassle, and missed opportunities.
So either change the automatic bill payments to the next day (or even 2-3 days later!), or start building up a bigger float in your account, or both. It's okay to take several months to get that float built up, but do it—you'll thank me some day.
P.S. When I'm considering options, I have several questions I use to help me weigh them better:
- What is the reward possible here, if things go well?
- What is the penalty possible here, if things go badly?
- What are the chances of getting that reward?
- What are the chances of incurring that penalty?
My first general rule is that the reward has to be likely, and significant, for me to risk something that has a medium to high penalty, and the chances of that penalty have to be reasonably low.
My second general rule is that if the penalty is extremely high, then the size of the reward has to be ridiculously stupendous, or the risk of getting the penalty has to be vanishingly small, or both.
In your case, here are my versions of the answers to these questions. You should come up with your own answers, though.
- Reward: I get to pay my bills a day or three sooner. There isn't a long period to mistakenly think my account has money in it, when I can't really afford to spend it.
- Penalty: Overdraft fees at my bank ($39?), and potentially being late on a payment to a credit card. Potentially having my bank raise my credit card interest rates and/or lower my credit card limit.
- Likelihood of reward: It's almost certain you'll get it most of the time.
- Likelihood of penalty: I wouldn't be surprised if you incurred this penalty once a year.
For me, the reward is so small that the penalty isn't worth it. I hate losing any money that I could have avoided. Is there some pressure or factor that forces you to take a risk of losing $39 in overdraft fees? Would you enjoy taking two twenty-dollar bills out of your wallet and throwing them into the street right now?