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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think living in overdraft is the norm?

319 replies

user1490465531 · 26/07/2018 10:31

Beginning to think it was just me.
Despite working I am always in my overdraft a week before pay day.
I have paid it of before only to be in it the next month.
Speaking to people it seems very common due to rising costs of living and no wage increase.
AIBU to think unless you have a fantastic paid job you will living in your overdraft.
I live a pretty basic life apart from odd treat so not exactly due to extravagant lifestyle don't own car don't go on holidays etc.

OP posts:
SoupDragon · 26/07/2018 11:15

If you're in your overdraft by the same amount every month you aren't spending more than you have coming in, you've just got a debt you can't service. If you cut back temporarily you can clear it.

Yes, I agree.

Firesuit · 26/07/2018 11:15

The thing to understand about debt is that it doesn't enable you to buy more stuff, it costs you money, so it means you can buy less. So in an ideal world, poor people especially should not have overdrafts.

Overdrafts are for rich people who are too lazy to manage their money so as not to need an overdraft.

One can come up with special cases where short-term borrowing can make sense, but for most people most of the time, it would be better for them if they were unable to borrow.

TistyTosty · 26/07/2018 11:16

It's not the norm here!

It is very easy to get complacent about relying on an overdraft but it is far from ideal. For me, it would be considered an absolute " last resort", used for emergencies only and repaid as a priority.

Original poster
user1490465531 · 26/07/2018 11:16

Oh I know there would be the odd smug poster but I just ignore them anyway.
You always get them on here especially on aibu.

OP posts:
Nousernameforme · 26/07/2018 11:17

I got rid of mine i reduced by a tenner a month it was only £100 and we only got it as a temporary thing to cover a short fall one month ended up with it for over a year living in it most of the time. I am so glad its gone.

crunchymint · 26/07/2018 11:19

Moneysaving expert forums are good for advice on how to reduce expenditure.

PaulRuddislush · 26/07/2018 11:20

Debt does indeed cost you money. I know exactly how you feel op, nothing but good wishes for you.

DerelictWreck · 26/07/2018 11:21

AIBU to think unless you have a fantastic paid job you will living in your overdraft.

I don't think that's true, though I suppose it depends on your definition of fantastic paid job.

As with all things it's about expendiutre as much as income.

When I first moved to London 3 years ago I was taking home £1600 a month, my rent was £1000, and I still saved £200 a month. Just depends on what you prioritise e.g. I walked everywhere so I could save on transport costs.

Obviously not so simple when you add kids to the mix, but I think if you're genuinely honest about your outgoings, you can find places to trim (tv, phonme bills etc)

EdisonLightBulb · 26/07/2018 11:21

I think if you have an overdraft you are more likely to fall back on it. If you didn't have one you would have to manage.

I am fortunate now that I don't need one, but when I was younger I found I used my credit card as an emergency because it was there, before I knew it, it was at 2k and not spent on frivolous things either.

It took me about two years to pay it off, and I swore never to use one again unless I had the money to pay it straight off and it was as a security measure to protect my purchase.

I haven't and it was far easier to budget pretending I didn't have any kind of security back up.

Frosty66612 · 26/07/2018 11:22

I paid mine off and cancelled it. I do have a credit card that I owe about £500 on though

BarbarianMum · 26/07/2018 11:23

No never. For years too poor for an overdraft or credit card. Now I could afford it I have emergency savings instead. Brought up with an absolute horror of debt - only allowable debt for my parents was a mortgage.

waxy1 · 26/07/2018 11:23

If you’re struggling financially, an overdraft is a good way to keep yourself even poorer.

JacquesHammer · 26/07/2018 11:23

I don't believe it is the norm but I don't think it is uncommon!

user1473756940 · 26/07/2018 11:24

Its all very well and good until you want to borrow money for example to get a mortgage to buy a house. And then frequently going into your overdraft will not be looked at well by mortgage lenders.

BackforGood · 26/07/2018 11:25

Thing is, you asked if it is normal to be in your overdraft every month. If posters say no, then they are called smug. Confused
There needs to be a different AIBU board where posters can highlight at the top of the thread that they aren't actually wanting to know, they only want replies that agree with them.

If you pay your overdraft off every pay day, then go back into it for the next month, you are actually living within your means though, for all your expenses - you just need to do something drastic for a few weeks to clear the debt so you aren't servicing it each month. I smoke and spend 20 pounds a week

Fabricwitch · 26/07/2018 11:26

Husband makes an average wage and I work part time minimum wage, and we manage to live below our means and have saved quite alot. Budgets help a lot!
However, everyone around me seems to live paycheck to paycheck mostly, I'm sure some go into overdraft.

pacer142 · 26/07/2018 11:27

No it's not normal. I deal with people's finances every day and it's only a small proportion who have perpetual overdrafts.

You need to discipline your spending to get the overdraft down to zero and then stay within credit afterwards. Just chip away at it. No need to do it too quickly, but a tenner a month means it will reduce by £120 per year. The key is discipline. Assuming you're overdraft level isn't increasing, you're managing to discipline yourself to stay within the limit, so set yourself your own limit each month, of a tenner or twenty less. Before you know it, it will be coming down and the end is in sight.

ReevaDiva · 26/07/2018 11:28

I had one when I was a student and struggled so hard to get out of it.

I went to the bank to ask if they'd reduce my overdraft limit monthly, so for example, it would come down by £50 a month or something. They said no, because it would show up on my credit rating each time and wreck my rating.

Because I was so skint I couldn't not stray into it; to get out of it I had to pay it off with a loan that took me 7 years to be free of.

Banks LOVE you have an overdraft. Sad

BuggerOffAndGoodDayToYou · 26/07/2018 11:29

Our bank account has an overdraft facility but I can honestly say that in the 30+ years we have been together we have never gone into it. We’ve been down as far as only pence in the black but never overdrawn.

This is down to my DH being very “tight” when he’s needed to be and making sure I knew when I couldn’t just go and spend willy nilly. His financial attitude has rubbed off on DD who has only once dipped into her student overdraft (by £50 for two weeks) whereas her housemates are all permanently in theirs.

If your overdraft is not getting bigger each month then that is good but you do need to start reducing it or you could be in trouble if a financial emergency hits. If you don’t already have a mortgage you may want one in future and being permanently overdrawn is now going to be good for your credit rating. Also look at how much money you are simply wasting on charges.

In short...no I don’t think living in an overdraft is the norm, I live in the south east too and we managed on just my wage for several years and then just DHs while I was a SAHM. It was a struggle at times but if we didn’t have the money for something we simply didn’t have it.... yes that meant no TV for a while, walking a couple of miles so that I got the train from the next zone in (actually saved a LOT of money on my season ticket with that one).

Due to DHs prudence we now live mortgage free, and we actually can just spend money when we fancy something. It’s worth making the short term sacrifices .....

crunchymint · 26/07/2018 11:30

You don't need to give up smoking. But almost everyone can make cut backs, even if it is a couple of pounds a week.

StaySafe · 26/07/2018 11:30

No, not smug but I do budget very carefully. I would probably use some juggling of savings and credit card to ensure any unexpected big bills were paid without incurring interest.

crayoladreamz · 26/07/2018 11:30

No no surely that’s not the norm??

I can believe it happens but what a sad state of affairs if it’s the norm.

OP try reducing it just £10 a month and break the cycle.

theymademejoin · 26/07/2018 11:31

@Iamtryingtobenicehere - Op you’re not unusual, ignore the smug bitches

Suggestions such as cutting back on smoking are ultimately a lot more helpful than your comment which normalises a lifestyle where living on an overdraft is a reasonable way to manage your budget.

Getting into an overdraft is easy. Getting out of it, not so easy, but possible with determination. However, without the attitude that you should not be living on an overdraft, it is very, very unlikely that anyone will clear their overdraft.

LoniceraJaponica · 26/07/2018 11:32

“Oh I know there would be the odd smug poster but I just ignore them anyway.
You always get them on here especially on aibu.”

Being smug has nothing to do with it. You clearly have something that will save you money, yet refuse to consider it Hmm

I think overdrafts depend on where you live and how old you are. OH and I are not in the first flush of youth and don’t live in London or the south east, and have never had an overdraft. I don’t think any of our friends have one either, but we don’t discuss money with them.

Iwantaunicorn · 26/07/2018 11:32

When we had overdrafts, we were out of it when payday rolled around, and then quickly back in to it. It cost £1 per day, so fees were £30pm. What I did to clear it and clear it the cheapest way I could, was to take out a 0% Credit Card that I could take cash down from (money transfer card, not taking cash out of it like a debit card!). It cost me about one months od fee (added to the cc debt) but was 0% for just shy of 2 years, and so became much more affordable to pay off.

If you wanted to consider something like that, you can do a soft search through Moneysupermarket or moneysavingexpert (or google soft search Credit Card!) to see whether it’s an option for you, could work out to be the cheapest way to clear it.

Apologies if you already know this, and just to add as a disclaimer, I am not a financial advisor or expert, I’m just some random on the internet posting what I did 😉