Eight years ago I was sat in the University library typing into Google “How to get out of your student overdraft” so it feels pretty surreal to be sat here, not only out of debt but financially independent writing this today.
At the time I had an overdraft of £1,400 with Natwest, and it was on a zero per cent commission for the first year of graduation.
It was my first introduction to debt, and while it wouldn't be my last it would certainly be the last of it's kind.
Here's how you get out of your student overdraft…
Budget Your Money
Most students I know don't have a budget. I certainly didn't
While I was conscious of where my money was going I didn't track or monitor it.
There are loads of budgeting applications out there that can help you quickly and easily set up a realistic budget.
From there you can ‘trim the fat' from your expenses and begin paying down your debt.
Prioritise Your Spending
University often entails a heavy social life. In fact, socialising was my FAVOURITE thing to do at University.
However, this comes at a cost.
Luckily, it's a cost that can be significantly reduced and in order to save money and get out of your student overdraft, that cost is going to need to be significantly reduced!
Along with a whole host of other things.
You're going to want to begin prioritising your spending. If you truly want to get out of debt you're going to have to make sacrifices.
£20 on a night out?
£20 on new clothes?
£20 eating out?
or £20 to reducing that student overdraft?
Speak To The Bank
If you currently have a student overdraft with an interest rate then speak to the bank about transferring that to an account with zero interest rates.
If that's not possible then shop around for another bank that offers zero interest on student overdrafts.
Side Note: It's unlikely you'll be able to pay off the student overdraft with a credit card.
This overdraft calculator will quickly and easily help you see just how much you could save by transferring from an interest rate overdraft to an interest-free overdraft.
That money you then save can be put towards your debt.
Clean Out Any Clutter In Your Home
From old clothes to unused textbooks.
Clear out anything and everything and sell it either online or at a local car boot sale.
As a former student, I know how expensive textbooks are to buy. One or two of these alone is an incredible amount of money towards any student overdraft.
Use Your Savings
Depending on the interest rates of your savings and overdraft, the accessibility of your savings and the mental impact the student overdraft is having on your life you may want to consider using your savings towards the debt.
I sometimes feel that this can be too much of an easy “Get out of jail free card” that, there's been no real sacrifice made, and perhaps no lessons learned. Therefore you're more likely to get back into debt.
Either way, this is personal preference and will require some additional research and likely advice in the form of a discussion some close friends or family members.
Get a Part-Time Job
It's no secret that holding down a job alongside studying at University is hard.
However, the extra money will heavily impact the rate in which you're able to pay off your student overdraft.
The reduction in free time and increased social activity is often a benefit too. I know from personal experience the social life I gained from a part-time job meant I spent less time spending money going out.