Hate being overdrawn should I use savings?

hrj2922

I am with first direct and get a £1000 overdraft, £250 of which is interest free and the rest is 15.9% or something.. I'm currently about £400 overdrawn, am owed some money (£50), have some clothes to return to a store (£40) and will be getting some from switching my other account to co op (they give £110 or something if you switch) so that will make it so I'm only £200 overdrawn so no interest, however I still have about 16 days til payday so inevitably will be using more of it. I can't work out when and how much interest i will be charged for the overdraft? If the first £250 is free, say I go overdrawn by another £200 that i pay interest on, what do I pay and when??

I do have £600 left of some money I was given (which I have burned through too quickly as I moved city and use a fair bit to buy stuff for the house and keep myself going between jobs when I moved) and this is my 'emergency money' in case my dog gets sick(shes insured so I should get it back if she did)/my car has a problem etc. But would i be better off just getting myself totally out of my overdraft with this, then budgeting my pay so i don't get back into my overdraft and trying to save some of it? I just hate the thought of not having 'back uo' money in a savings account, but i also hate being overdrawn. I'm 23 and house sharing and going back to uni in september as a mature student so I know I can't expect to be saving heaps but i just stress about money a lot. Any advice would be great, thank you!

YorkshireBoy

Use your savings to clear the overdraft. The overdraft facility is your emergency fund until you've built your savings account balance back up. Maybe you'll think twice about spending money you have to pay for!

neverbrokensarah

Clear the overdraft with the savings in total, use the interest-free element until payday for essential spending and/or the amounts you are expecting are coming in. Top up the savings later on when you can. Your interest on your overdraft will be higher than what you receive on the savings.

DCFC79

Stop lending money.
Only buy what you need/what you can afford.

Get a handle on it now before it balloons out of control.

Yes use your savings to clear the overdraft.

Ben8282

As the interest payable on the overdraft will exceed the interest received on the savings it is obviously preferable to pay off the overdraft.
Also being constantly overdrawn on your current account looks bad,

getmore4less

you don't have savings.

you have borrowed money to make it look like you have savings.

mwarby

Sounds to me like you really need to budget. Clearing the overdraft with savings does sound sensible, but not if in a few short months your in the same place but no savings

agrinnall

mwarby wrote: »

Sounds to me like you really need to budget. Clearing the overdraft with savings does sound sensible, but not if in a few short months your in the same place but no savings

Exactly, the OP really needs to be posting on the Debt Free Wannabe board to find out how to avoid getting into the same situation again.

qwert_yuiop

DCFC79 wrote: »

Stop lending money.
Only buy what you need/what you can afford.

Get a handle on it now before it balloons out of control.

Yes use your savings to clear the overdraft.

Stop borrowing money.

System

They are giving you zero (or around that) for your money.
You are giving them 15.9% for theirs.

Either clear it off or at least to -£250

bma14

Yes definitely clear the overdraft with your savings - you are paying more in interest on the overdraft than you are receiving from the 'savings'. Pay it off, use the interest free portion to get you to payday and then work on clearing that interest free portion. Come over to the debt-free-wannabe board and you will get lots of tips about how to do it. It's not easy but it's necessary before you end up on a downward spiral of unmanageable debt.

I also for ages had a large overdraft with large savings, but it's just not worth it.