Overdraft

5 Budgeting Steps To Help Clear Your Overdraft

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Clearing an overdraft can be a long journey depending on how much debt you have. Whether you’re a student, professional or unemployed, there are some successful steps you can take to wipe that overdraft and wave it goodbye forever. It’s best to do this gradually and be consistent with your budgeting steps, but the more you can pay off every month, the better.

Pay off a set amount every month

Staying consistent can be difficult, so we recommend having a set amount to pay off every month. If you take this off your paycheck straight away there will be no going back, if the money’s gone at the beginning of the month you can’t spend it. Sometimes emergencies occur and there are options for loans for bad credit if you are desperate and believe you can pay it back without any trouble in the future.

Using a bank card app with a money management option

Using a bank card that is connected to a phone application can be a complete game-changer, every time you spend something you will be notified on your phone, and consequently, it will be easier to track spending instead of just aimlessly tapping your card. Some applications have management settings to sort your spending into categories, for example, food, transport, entertainment, and much more. You will also be able to set budgets for each category and this can be very helpful if you want to budget in certain areas.

Cook your own meals instead of eating out or ordering takeaways

Planning your meals and shopping at cheaper supermarkets will also help you save money and gradually boost efforts to pay off the overdraft. It can be good fun to cook for yourself, try doing it with your friend, a partner, or a sibling. There are plenty of recipes online and on social media platforms.

Actually sticking to your budget

Self-control is important if you really want to clear your overdraft, you will need to stick to budgeting over a long period of time. Unfortunately, you won’t manage to clear your overdraft if you keep spending and don’t limit your outgoings unless you of course get a big pay rise or suddenly find a really well-paid job.

When you get paid but aside from all your outgoings

Before you spend any money on payday make sure you put aside all your bills, this can be put into a separate savings account or you could transfer your leftover money into another bank. The trick is to divide out your money between four weeks. If you get paid once a month, you can then work out food, transport, clothes, entertainment, and anything extra you will be spending your money on. Maybe some weeks you will completely budget and cook everything at home and other weeks can be for treats and eating out, it’s about seeing what works for you.

When you have finally paid off the overdraft, close it completely and there will be no looking back! We hope our top 5 budgeting steps to help clear your overdraft will work for you.

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