If you are stuck in debt, there are things you may be able to do to escape your overdraft hell. We took a look at steps you could take.
Escape Your Overdraft – Start Budgeting
First and foremost, you must determine how you will be able to live and survive.
Calculate how much money you have left over each month by looking at your incomings and outgoings.
As part of a sinking fund, consider birthdays, MOT and car servicing, and the expense of new glasses.
Is there, however, anything you can trim from your budget? The thing is, it won’t last forever. Debt will go, and it will do so considerably more quickly if you reduce your monthly expenses.
When you’ve paid off your overdraft, there’s no reason you can’t start spending on extra luxuries. Making a few short-term concessions will assist speed up the process of getting your overdraft cleared.
Escape Your Overdraft – Change Spending Habits
Spending on a daily basis can also have an impact.
Keep a spending journal to see where your money is actually going.
You may believe you have your budget under control, but impulsive cash spending can rapidly undo all of your meticulous preparation.
And, if you want to reduce your overdraft, whatever savings you make should go toward that, not towards random expenditures.
When you truly understand and are aware of where your money goes, you may be able to rein it in and save even more.
Baby Steps
It’s all about doing small things frequently.
Your budget will show you how much you can pay off your overdraft debt, so reduce it as soon as you get paid.
This will keep you from succumbing to the temptation to spend the money. If you find yourself with extra cash for whatever reason, don’t spend it; instead, put it in your bank.
Reduce your overdraft limit by the same amount by going to your online banking or calling them. Don’t save money for a rainy day or just in case, because it will be spent on ordinary items and you won’t see it again.
What’s more, when you check your statements each month, you’ll notice right away that you’re winning and that your overdraft balance is shrinking.
Use Savings
If you have any savings, it may be worthwhile to use them to pay off your overdraft.
Your savings account has a lower interest rate than the debt and charges you pay each month. If you don’t have any, try these easy ways to save money without even trying, and then put that money towards it.
Using an app like Chip, you can have money transferred from your bank every few weeks without feeling broke. It calculates how much you won’t miss using algorithms. You may use the app while you’re in your overdraft, and you can set goals for yourself.
It’s Good To Talk
First and foremost, if you’re having financial difficulties, please contact your bank. Increasing your overdraft won’t help you because you’ll merely end up in more debt. Instead, inquire about the possibility of a charge freeze or a reduction in the interest rate. The worst that can happen is they say no.
