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Using overdraft every month?

8 replies

Overmylimit · 27/08/2018 22:18

Does anyone else use their overdraft every month? I work 4 days a week with one child and my partner works evenings/weekends.

I don't have a lavish lifestyle but still seem to end up needing to use it every month and it worries me that as my DD gets older things will become more expensive and I won't be able to manage!

So yes just wondering if it's just me and maybe I should be working more or my partner should? I've always tried to prioritise time with my DD rather than working lots and lots, I have been in that position working long hours and found it hard not seeing her etc.

OP posts:
Overmylimit · 28/08/2018 08:55

Bump!

OP posts:
GrumpySausage · 28/08/2018 08:57

Yes monthly. Me and my husband both have decent incomes but every month we go into our overdraft. This is historic from when we both earned less and we've never clawed our way out.

We are now starting to budget better each month so we're making steps to get out of it.

NerdyBird · 28/08/2018 09:01

No. We have a couple of times recently and I hate it. Hadn't been overdrawn in 20 years. It's quite a difficult debt cycle to get out of unless you make an effort but there are lots of budgeting apps to help you. I also find carrying cash works as you can't just pull out your card and tap, you have to be more aware of what you have.

dalmatianmad · 28/08/2018 09:03

I earna decent amount but am still overdrawn every single month! I don't think about it.
I don't have a credit card/loans etc.

Isleepinahedgefund · 28/08/2018 09:06

How big is your overdraft? I sometimes go into the £20 buffer overdraft on my current account, but £20 is easy to recover from.

If it’s a proper big overdraft of hundreds, it takes quite an effort to come back from that to having your account in credit again. When I wanted to stop living in my student/after graduation overdraft, I asked the bank to reduce it by £100/m until it was smaller. Of course that assumes you can spare £100/m but even £10/m would start you off on that path.

The trouble with an overdraft is that the bank essentially have control of your funds as you’re relying on them giving you access - if for any reason they revoke that at short notice, you’ve got a problem. At least have another basic account available so you can have one account in credit.

Now is the time to get control of it, while you DD is still cheap to run! It’s not really a question of working more, but working out how to pay off what you owe, and working more if that’s the only way you can achieve it. Think about it - if your o/d is £300 and you can tighten your belts by £100/m for a short fleeting three months, you’ve solved the problem!

SandysMam · 28/08/2018 09:07

Do you have savings though? Would it be better to clear your over draft once and for all with savings and start a fresh then when you get a full months salary in, budget hard? 4 days a week is quite a lot with a young daughter so not sure it’s a case of working more. What are you spending on?

BarbaraofSevillle · 28/08/2018 09:17

Too many unknowns to advise, but the big worry is that overdrafts can be expensive and there's always the risk that the bank will recall it and you'll have to pay it off more quickly than is comfortable.

Whether it is a worry depends on how much it is and how much it costs. If it's not very much, you can get the same cashflow help by putting your spending on a credit card and paying it off in full every month without fail. Therefore the money that would have taken you into overdraft remains in your current account until after payday and you could even earn a bit of cashback with the right card.

But you should also honestly think to yourself whether there are any costs you can cut out of your 'not lavish' lifestyle.

There are plenty of things that people spend on that they think as normal/necesscities, that are actually luxuries, that the could cut back on. Things like food and drink out of the house, can cost hundreds of pounds a month if you do it every day, so plenty of scope to cut back by taking a packed lunch most of the time. Also what are you spending on grocery shopping. Some people spend 2 or 3 times more than others do, so again, possible scope to cut back if you are a high spender.

Also check you have cut all your regular costs as much as possible and shop around and use voucher codes and cashback sites too. The difference between doing all this and not can also be hundreds of pounds a month between a wasteful and a careful approach.

You say you don't want to work more, due to lack of time with your DD, but if you've never really thought about budgeting before, it could be far more productive to spend some time getting a good handle on your finances, to see if you are leaking money anywhere

www.moneysavingexpert.com/family/money-help/

Mabelface · 28/08/2018 09:20

I live in mine. Currently taking steps to try and earn more money so I'll eventually get out of it.

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