Today one of my fellow tweeters asked me for my tips for reducing their overdraft, which at this time of the year always seems to be high on peoples agendas, after all we are now a couple of months into the new year and many of us are still counting the cost of what is usually an expensive December, especially those of us who have a large family etc.
So as we slowly move towards the spring and away from the cold dull days of February and March let’s start to look at some ways which might help us reduce our overdrafts.
Consider switching banks.
When did you last change your bank? Research by Santander shows that on average, people have held the same current account for more than 16 years. By comparison, the longest romantic relationship with a partner held by the average adult is 14 years and four months. So it would seem that we have longer lasting affection for our bankers than we do our partners! The fact of the matter is that if you have been with the same bank for an extended period of time, its probably time to shake it up a little and move banks or at the very least talk to your existing bank about other better products which may be cheaper for you.
This is my broken record mantra, it is in fact my most common answer to the many questions I am asked on a daily basis, but by making sure that you have a budget for all of your monthly expenses and more importantly sticking to it, you can and will save an small fortune, and you know what budgets can be a lot of fun and they even become quite addictive too once you see the money you are saving.
Once you have completed that budget take some time to study it at length, and then make some cutbacks, start with the big stuff such as any memberships you may have that aren’t being used, can you walk to work rather than drive? Do you need that coffee every morning or would a treat once a week be better? It’s also worth while taking a look at my top tips for shopping at the supermarket as there is another small fortune to be saved there too.
Ask your bank to reduce you overdraft limit
Once you start making saving on your monthly expenditure, your reliance on your overdraft should become less, so remove the ability to give into temptation by asking the bank to reduce you limit each month, it may well be worthwhile making an appointment to see your manager to talk about a six month plan to get you to an overdraft free situation.