Are you one of the 4.5 million Britons who live permanently in their overdraft?
A remarkable new survey has shown that one in 10 of us are constantly in the red financially with a further 11% dipping into their overdraft every month when the money runs out.
Charges
We have become the overdraft generation with many of us living beyond our means and racking up charges, even with authorised overdrafts. Millions of us are seemingly happy to part with around £30 a month or £300 a year so we can spend more than we earn.
An overdraft are useful if you need to just dip into it once in a while when you have a particularly heavy month, but it can be very expensive if you start to rely on it and never pay it back. Charges start to build and you slide further and further into debt.
How do I get out of it?
The simple answer is stop spending more than you can afford. Make a budget and stick to it. Here are some handy tips:
- Check your statement for direct debits and standing orders. Are there things on there that you are paying for but rarely use (like a gym membership) or a subscription to a magazine you never read.
- Check the cash withdrawals you are making and what they are for. Buying lunch five days a week at £5 a day adds up to £100 a month when you might consider taking a packed lunch to work.
- Are you paying too much for your gas and electricity? With prices going up yet again could you be on a cheaper tariff? We can help you with switching.
- How much are you paying for your house and car insurance? Could you get it cheaper? It’s well worthwhile shopping around.
- Could one of your nights out a month be swapped for a night in with a good DVD and a bag of popcorn?
Big dividends
Looking after the pennies could end up paying you big dividends in pounds, making it that much easier to live within your means and let you start chipping away at your overdraft.
Another idea might be to get yourself a new bank account with Card One Banking which offers you an on-line account which guarantees you will never be overdrawn. It’s a current account available to everyone, even if you have a bad credit score!
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