How do I get out of my student overdraft debt??

jjg95

A little introduction, I graduated university last May with a film degree and managed to get myself an entry level job last September in the advertising industry in London, which is great!

So I was one of the many students that took out a student 0 % overdraft while at uni and once I left i ended up getting deeper and deeper into it and that now amounts to £1,850. This has now converted into a graduate bank account which gets gradually lower over a 3 year period, so basically I need to reduce this to £1500 by this summer, and eventually £0 in two years time.

The thing is, i have no idea how I can do this!! My salary is £20k before tax which leaves me with around £1390 a month, being in London expenses are also quite high so I usually put aside £850 for everything like rent and bills (excluding travel and food). This usually leaves me with £75 a week for general living costs. The thing is, i always end up going over this. All it takes is maybe one occasional night out, or needing to buy clothes, neither of these I do THAT often. So this means I basically just scrape breaking-even every payday, so I can't save anything or pay any off any of my overdraft, which is very worrying considering i need it to be reduced ASAP.

So im basically asking for any general advice, maybe from people that have been through the same position. Is there any support available? Researching online some people have said about using a credit card to pay it off slowly, or putting larger expenses on there, but that seems like a bad idea to me.

Any ideas would be greatly appreciated!

BorisThomson

Reduce outgoings and/ or increase income.

Get a second job.

Give yourself a budget for going out and stick to it. Buy clothes when you need them, not when you want them.

spadoosh

The usual go to option is worry about it until the banks call the overdraft in at which point theyll very kindly offer you a loan to repay the overdraft which is where they start to recoup some of the interest that hasnt been paid.

Sounds like theyve changed a little the aim being to reduce gradually as opposed to please pay it all back now.

Youve got a few options. Pretty much what Boris Thomson says, reduce expenditure or increase income.

I cant encourage you enough to take the hit now. That is reduce expenditure as much as possible to get the debts repaid. It will put you in a much better footing for the future. I only wish i couldve been more hard on my spending habits when i was younger. Now have a wife and kid and whilst i can keep my spending to very little, family life is expensive. The other option is find another income, again take the hit now, much better working 70+ hours when your mid/early 20s than when youre trying to 'settle' and restricted by how much you can afford to pay a nursery.

£350 isnt a huge amount to find in a few months. I'd say most people have that knocking around in 'stuff' (gadgets, tablets, consoles, clothes, bikes, you get the gist.) if its not important try and sell it.

cms-help

jjg95 wrote: »

A little introduction, I graduated university last May with a film degree and managed to get myself an entry level job last September in the advertising industry in London, which is great!

So I was one of the many students that took out a student 0 % overdraft while at uni and once I left i ended up getting deeper and deeper into it and that now amounts to £1,850. This has now converted into a graduate bank account which gets gradually lower over a 3 year period, so basically I need to reduce this to £1500 by this summer, and eventually £0 in two years time.

The thing is, i have no idea how I can do this!! My salary is £20k before tax which leaves me with around £1390 a month, being in London expenses are also quite high so I usually put aside £850 for everything like rent and bills (excluding travel and food). This usually leaves me with £75 a week for general living costs. The thing is, i always end up going over this. All it takes is maybe one occasional night out, or needing to buy clothes, neither of these I do THAT often. So this means I basically just scrape breaking-even every payday, so I can't save anything or pay any off any of my overdraft, which is very worrying considering i need it to be reduced ASAP.

So im basically asking for any general advice, maybe from people that have been through the same position. Is there any support available? Researching online some people have said about using a credit card to pay it off slowly, or putting larger expenses on there, but that seems like a bad idea to me.

Any ideas would be greatly appreciated!

What hours do you work as that's not a fantastic salary for London living? Just wondering if a temporary part-time job might be an option? You can quit as soon as you've repaid the debt if you can pretty much afford to live otherwise. Are there any fees associated with the overdraft at the moment? If so, it might be worth looking to move it.

You could post up a Statement of Affairs and people could see if they can help you make savings. Do you take your own work to lunch as opposed to buying it whilst at work? Those sorts of things.

nkkingston

It sounds like you need a more thorough budget. It's much easier to hold yourself to account if you know you've got £25 to spend on work lunches, £20 for a night out and £5 for a top up shop than if you've got a nebulous £50 for mostly food and drink type stuff, and find you spent £45 on the night out and can't afford lunch for the rest of the month. Keep a spending diary to make sure you know exactly where the money is going, and then decide if that's where you want it to go. Changing habits accordingly.

Candyapple

You earn £1390 after tax.
£850 rent and bills
£240 food and travel
You have £300 left each month.

If you knuckled down and didn’t go out, buy any clothes or wasted any excess cash you could clear your overdraft in 6 months.

6 months and you would be debt free. Think about that.

Your salary is shockingly low for London. Can you actually afford to live the London lifestyle? I'm guessing you live in a house share in zone 4 or on the outskirts and you probably work in central hence the travel cost. What happens if you fell ill / lost your job? You have no savings to tide you over.

If you don’t increase your salary or end up getting a second job, you’ll find yourself falling into a debt trap very easily. Have you looked to see if you can find similar jobs elsewhere in the country? Your housing costs will reduce drastically as well and you will probably find that your quality of life will increase as well.

newmum1

When I graduated I went into the branch every pay day and asked them to reduce my overdraft, e.g month 1 reduced by £40 month 2 by £80 this worked for me and meant that I didnt really notice it over the time that I paid it off. I paid mine off years ago but I have never had another overdraft again as I decided that I didnt need one.

Silver_Queen

You can ask if they will reduce your overdraft by say, £100 a month.

Unfortunately your salary is not that unusual IMO for the field of work and the (lack of) experience.

As long as you're disciplined and stick to your budget, you'll be OK.

sbgriseum

It is such a low salary, though film degrees offer so much and offer so little at the same time.
If you into mobile phones (can you afford one), use a spending app to track what you are spending it will change your habits.
Get CASH out only and spend only that leave the debit card at home its amazing how much you save by doing this.
A second job , your own film blog , you never know whos watching.
All the best and well done for coming to the site it can be done , think outside the box, ask for a raise , ask for extra work you never know.

Superhoopza

I can't quote on my phone but Candyapple seriously what a ridiculous statement to make. I do not believe anyone never spends a penny outside their food, rent and travel budget. Not a penny? They aren't allowed a single beer, t shirt or coffee?

All your other points about the salary being low are fair but don't underline your point about not spending a penny extra, not for a few weeks but 6 months like it's good advice. I hope you were being sarcastic otherwise that is useless and unrealistic advice. Sorry if I've misunderstood but nobody can live like that.

Superhoopza

Also reading the OP he's a grad. Grads move to London to work up the chain to their ideal jobs. There are unlikely to be jobs in the country for his level and his best experience will be in the centre. Just because he has an overdraft he should shift his whole life and give up on his dreams.

I've had some good advice on this site but God it frustrates me the amount of people that think they are helping when they are actually harming someone and talking so much rubbish.