How to Pay off a Large Overdraft in Super Quick Time

There are many of us that use our overdrafts regularly. It can all too easy to be able to borrow money this way. We might even find that we are in a situation where we go overdrawn without even noticing because we do not monitor our spending or just run out of money too frequently. It may then lead to us getting a larger and larger overdraft until we have one that feels like it is unmanageable. Then we can tend to bury our head in the sand; try to hide form it and ignore it as it is too stressful to think about. This can lead to further problems and debt as we are just not addressing it. There are things though that we can do to get it paid off quickly.

Face up to it

To start with you need to face up to it. It can be really hard but you need to know exactly what you owe, how much income you have each month in the household and how much you pay out on essential items such as utility bills, rent or mortgage, food, insurance, travel to work and such like. Once you have done that you can start to put together a plan.

Find a cheaper loan

Firstly you need to be aware that an overdraft is a very expensive way to borrow money. Therefore if you can pay it back by borrowing in a different way, this could help you to reduce your interest payments and have more free money available to repay the debt. You may just see this as moving the debt and moving the problem. It can be, but it can save money and this is important when you are trying to repay it. You do need to be careful though. If you think that after getting a loan to repay your overdraft you will then start to get overdrawn again, then you will end up in even more debt and it will cost you even more money than just leaving the overdraft as it was.

Use savings

If you have any savings then it is worth using these to pay off the debt. You might be saving up for something or like to have some money to fall back on, but the debt is so expensive that it is well worth paying it off and then building up your savings again afterwards. If you calculate how much you are paying out in interest and other fees for your debt compared with what you are making in interest on your savings, you will see why it will pay off financially to do this.

Spend less

It is so important to prioritise paying off your debt over spending on most other things if you want to repay it quickly. So make sure that everything that you buy is necessary. Think about everything you are buying and decide whether it is necessary for you to have it right away or not or whether you can wait until the debt is paid before you buy it. Also compare the price of everything you buy to ensure that you are not paying too much. This includes things that you pay by direct debit such as utilities and insurance If you can pay a bit less for everything you buy and buy less overall then you should be able to spend significantly less money.

Earn more

By spending less you will not need to borrow so much and hopefully will actually have enough money to start repaying the overdraft. However, it is unlikely to be enough to pay it off really quickly. Therefore you will need to also think of some ways that you can earn more money. A lump sum could be very useful and you might be able to get this by selling some of things that you own but that you no longer use or need. This could be clothing, accessories, homewares or children’s toys and games. There are many options and it can be quite surprising what sorts of things people will actually buy. There are many different places to sell things such as local social media groups, auction websites, car boot or garage sales. Consider the types of things that you are selling and this will help you to be able to choose the appropriate way to sell them. Lots of cheap little things are better off sold at a car boot or garage sale but more valuable items at an auction.

Earning more money can help too. This might mean asking for extra hours in your current job or seeing whether you can get a pay rise. You may also need to consider taking on extra work. It could be possible for you to pick up some evening or weekend work if you are able to be flexible enough and have the energy to do it. If you do not work at the moment and are having trouble finding a job then contacting a temping agency might help you to pick up some work. Although it will not be a permanent job it will still help you to get some income coming in to help towards the debt.

How to Afford all the Luxuries in Life

It can sometimes seem really unfair that some people seem to be always spending money and yet you cannot afford to do so. We all know people that seem to holiday multiple times a year, have their home redecorated regularly, always have new clothes and things like this. It is hard not to feel envious or wonder how they can afford to live like this. Obviously there are some people that earn a lot or inherit wealth and can afford this, but there are also many people not in this situation who still seem to be buying lots of luxuries and we may wish that we could afford them as well.

Having money

It is worth starting by understanding that we cannot have money and spend it. What I mean is that if we want to build up some savings, pay off debts, have enough to cover our bills and some to fall back on in case of emergencies, then we cannot spend lots of money as well. Otherwise we’d find ourselves relying on payday loans without credit checks etc. This means that those people that seem to be always spending money are unlikely to have this. They do not have the security of savings, knowing they are paying off their debts and managing their bills well each month. There is also a possibility that they are borrowing money in order to pay for their things. Many people have loans, credit cards, overdrafts and things like this and use them in order to buy themselves things. They feel that they deserve that holiday, those new clothes or to redecorate their house and they buy it when they want it and if they do not have the money they borrow. This can seem easy, but once you have to start repaying the money it can get very tricky. You will need to find the money for those repayments and have to cope with a loan. It could end up leading to a lot of stress, especially if you struggle to find the money that you need and so this could outweigh the fun and relaxation gained from buying the holiday, clothing etc.

Spending money

It is possible to buy luxuries without borrowing money but you have to realistic and think about what you really want. We could buy all sorts of bits and pieces, lots of books, cushions, candles, clothes, shoes, kitchen equipment and many more things, but where would we store them? We could go on holiday all of the time but when would we have time to spend with our friends and family, to go to work, pursue our hobbies and things like that. We do not have the time or the space to buy everything that we want and so we will have to limit our spending anyway.

Justifying spending

It is also worth thinking about why we want these things. Is it really that we need them, that they will make us happy, that we will feel better when we have them? Or is it because we think that will happen as the marketing companies have sold us the idea that it is only when we have lots of possessions and take lots of holidays that we will be happy. There are lots of ways to be happy and many of them do not involve spending money. Obviously we are generally happier if we can afford the basics that we need and know that we have money to fall back on if we need it. However, beyond that will we really be happier if we spend lots of money, have lots of things and go on holiday a lot? Think about times when you have been happy and whether these were due to you being on holiday, having lots of things that you bought or for other reasons?

Spending less

One way to have more things is to pay less for the things that you are currently buying. This may sound a bit odd, but many of us are paying more for things than necessary. If we start to look at everything we buy, then we could pay less for them and save money. This not just by comparing prices in the supermarket and spending less on food but by switching suppliers and looking at the costs of everything we spend money on. So starting with rent or mortgage, looking at financial products, utilities, contracts and everything else we buy, we could find that we could reduce what we are spending on many things and therefore have more money available. There is a problem though with saving money. Once you start you will not want to stop and therefore you will enjoy spending less and may decide you do not want those extra possessions or holidays after all! It can feel great knowing that you are not overspending and that you are able to put money into your savings or pay off your debts.