Lower Overdraught?

Sophie-Mae

Hi all, pretty new here

I have been a student at uni for a year now, and have had a student bank account with HSBC for the whole year, this comes with the £1000 overdraught.

I am a student nurse, so receive a monthly bursary of £558ish with no course fees. Lucky hey?

No, because I currently live in my own rented home with my partner. I have a car, bills, tv, 2 cats etc, and a life.

Im seriously considering it reducing the overdraught if this is possible? Because I constantly go way way over, this month, £500 OD, and it is really getting me down. I know im a student and thats what its there for, but i hate being OD

My theory is, if I reduced my OD, then I would budget more and spend my money wisely! And only be £100 ish OD each month.

Is this wise? Or am I being stupid, and just accept that I am a student and this is what happens?!

Please help me!

PARIS_5000

Sophie-Mae wrote: »

Hi all, pretty new here

I have been a student at uni for a year now, and have had a student bank account with HSBC for the whole year, this comes with the £1000 overdraught.

I am a student nurse, so receive a monthly bursary of £558ish with no course fees. Lucky hey?

No, because I currently live in my own rented home with my partner. I have a car, bills, tv, 2 cats etc, and a life.

Im seriously considering it reducing the overdraught if this is possible? Because I constantly go way way over, this month, £500 OD, and it is really getting me down. I know im a student and thats what its there for, but i hate being OD

My theory is, if I reduced my OD, then I would budget more and spend my money wisely! And only be £100 ish OD each month.

Is this wise? Or am I being stupid, and just accept that I am a student and this is what happens?!

Please help me!

I have a student/graduate account with HSBC with the overdraft.
I would leave the overdraft in case you need it because HSBC gives you 2 more years interest free after you graduate which gives you time to pay it back.

The overdraft is interest free so you should make the most of it as long as you are careful and stay within your overdraft limit.

lucylollipop

It's entirely up to you - I've never had a student account, so only had the standard overdraft on my account (£400). However, in the 3 years I've been at uni, the only time I've been into my overdraft is over the summers, if I haven't been working - it's perfectly do-able to survive as a student without using £1000 or £2000 worth of overdraft - you just have to budget harder, but it's definitely handy to keep in case of emergencies!

Carnaby_lamb

Dont reduce your OD, you may need it one day and its soo much harder to extend than reduce.
If you have the strength to do it, Ive saved the few hundred into instant access saving account. You can transfer over the same day if needs be, and if you never need it's still there. And on top you should have at least earnt £50 or so interest.

saverholic

Sophie-Mae wrote: »

Hi all, pretty new here

My theory is, if I reduced my OD, then I would budget more and spend my money wisely! And only be £100 ish OD each month.

But if you had a bad month and went over this smaller OD you would then be hit by unplanned overdraft fees which isn't going to be helpful to maintaining a budget. I'd keep the largest OD they offer to you, you don't have to spend it but you never know when it might come in useful.

Carnaby_lamb wrote: »

Ive saved the few hundred into instant access saving account. You can transfer over the same day if needs be, and if you never need it's still there. And on top you should have at least earnt £50 or so interest.

I'd try this. I personally deficit bank and place a large chunk of my OD into savings. I am much more careful about my spending because

a. I'm closer to my OD limit so have to be careful not to accidentally go over.

b. when I look at my bank balance I look massively overdrawn. Even though I know that the money is sitting in a savings account it feels as though I'm in debt and so I think twice about purchases.

You could try taking your OD down to -£700 (for example) and try to live so by the end of the month its only down to -£800 (i.e. your wages + £100 ). The extra £200 will give you breathing room in case you don't quite make it.

stephyt23

There's nothing stopping you reducing it if you want, and I'm sure if you changed your mind could increase it again.

I can have a £1250 overdraft with Natwest but have only opted to have one for £500. I don't like using it if I can help it for the same reasons as you, it teaches me to budget better.

At the moment I'm with Lloyds (only opened the Natwest one yesterday) and haven't taken the full overdraft on that either, only £200. I'm back in it at the moment as the last of my loan ran out 4 weeks ago, but I'm still not at the £200 limit which any other time in my life I probably would have been, so it's working for me