Somewhere cheap and rubbish or expensive and good?

hungledink

I have been looking at flats to rent in the past month. When I initially started looking, I was willing to pay £450 pcm. Having viewed a few flats in this price bracket I was less than impressed.

I have subsequently been looking at flats for 550 pcm and like these a lot more.

I will have to use my overdraft facility (I dont pay charges on the overdraft facility) to cover the bills each month if I go for the higher price flats. My wages will then be paid in each month and clear the overdraft, but I will then go overdrawn again to pay the bills and so on each month.

My opinion is that if I have a charge free overdraft, that will effectively 'clear' each month then why not use it.

I was just wondering what peoples opinions of my predicament are. Should I pay the higher price and live somewhere I like or live within my means and live somewhere I dont like.

KateLiana27

My personal opinion? Live within your means. Overdraft facility doesn't count towards your means. It's very stressful having no cushion whatsoever for unexpected expenses (and there will always be unexpected expenses).

I'd keep looking and get creative (smaller place, slightly less convenient, not as posh area etc) until you find somewhere you can at least tolerate.

BitterAndTwisted

Dipping into overdraft every month (even an interest-free one) is a slippery slope to hell. Renting and running a home always costs more than you anticipate so I'd advise you to live within your means. Even (shock horror) try and get some savings behind you.

Errata

You will be up spit creek the second your Bank reduces your overdraft limit.

cjmumto2

Be sensible, dont use your overdraft. Rather look further afield in a nice area than get yourself into trouble. You may need that overdraft one day.

westlondonbuyer

You could:

*Flat or house-share in a nice area; loads cheaper than renting on your own, especially when bills are factored in.
*Find a grotty but affordable flat in a nice-ish area and spend a bit of your own time and money on giving it a professional deep clean, a lick of paint (your landlord is unlikely to refuse, but ask first) and some rugs, cushions and plants.
*Look further afield on your commuter route until you can find something you can afford and will be happy to live in.

Do NOT treat your fee-free overdraft like "free money" - this is exactly how banks reel you in; and then roll you over.

Annisele

So, you were initially looking to pay £450 per month, but now you can go up to £550.

That implies that you can *easily* save £100 in a month. So - can't you just stay where you are for another month or two so that you can afford the £550 straight off?

gazfocus

Another vote here for staying out of your overdraft as much as possible.

While I was at university, I had a £1300 fee free overdraft and spent the money almost straight away. After I graduated and got a job, it was depressing seeing my bank balance going not much past £0 once my wages cleared the overdraft and then with paying rent, bills, etc, I was soon hitting the £1300 limit again. It took a very long time and a lot of determination for me to get to a position where I was not using my overdraft for monthly 'living' but it feels much nicer knowing I've got that safety net there if anything goes wrong with the car and things like that.

As westlondonbuyer suggested, how about look a bit further afield? Maybe you could get something a bit nicer but cheaper that way.

hungledink

Thanks for your opinions so far. Seems most would recommend the cheap and rubbish option.

My overdraft is charge free, as a benefit of working for the bank I have the facility with. The rent I intend to cover is only around 5% of the overdraft so it isnt as though I will be rinsing it every month. Apart from the extra £100 rent everything else is budgeted for.

I dont see the point of having an overdraft if its not being used, and there is still plenty of scope to cover any emergencies.

DVardysShadow

hungledink wrote: »

... I dont see the point of having an overdraft if its not being used

These are the words written in the stone which paves the road to hell.

An overdraft is useful for covering one off emergencies and opportunities. But as part of your plan for regular monthly expenses, it really is the road to financial slavery. If you cannot cover month to month expenses by starting off without an overdraft and staying out of it, then that overdraft will be certain to get bigger. And when you bust the limits, you will have to start paying interest to some lender or another. And then you will end up borrowing from less and less prime lenders, ultimately ending up with payday loans.

See you in DebtFreeWannabe's about 2.5 years from now ....

hungledink

DVardysShadow wrote: »

See you in DebtFreeWannabe's about 2.5 years from now ....

Unlikely, in 2 years I will have paid off my only loan freeing up an extra £250 or so a month, and have a huge share option to cash in.

This is only a short term solution, not a long haul one.