I wish school taught me about… overdrafts
Mate. Overdrafts they either teach you how to handle money or it can expose how bad you are with money. Why is this topic so important? Because, overdrafts are literally trial-run for a credit-card or a loan, how you use your overdraft will show you how you will use a credit-card or a loan in the future. This can highly affect your credit score, we which can hinder you from getting a house, a car, even business investments.
My sisters told me about overdrafts before I went to University, but no-one told me how to use it or even why I should use it. So when I got to uni things didn’t go so well. I was really good at saving, however, I was really good at spending! I saw my overdraft as extra cash and not as emergency cash. So though I was saving, I was also doing a lot of unnecessarily on spending on UBER, taxi’s and dinners. Which made no sense at all? I basically had to use all the money that had saved to pay back my £2000 overdraft and was left with £0. So learn from me ladies, it’s not worth it. My tops tips for overdrafts are;
Act Your Wage:
I spent a lot of my overdraft on cabs and Ubers because I didn’t want people to see me taking a bus. I calculated that I spent around £600 of my overdraft on cabs. Moral of the story it’s not worth it. Don’t build unhealthy spending habits because you’re trying to ‘live your best life’. I can drive, but I will gladly take the bus to save money. ACT YOUR WAGE!
Pay it straight back:
Don’t Get an overdraft unless you need it I truly don’t think you need an overdraft. But if you do get one, use it only for emergencies and learn to pay it straight back. This habit will teach you how to use a credit card. Your credit score will stay high and healthy when you pay it back before the month ends.
Do you know that you can go into your local bank and get advice about finances. I remember walking into my bank after I graduated and booking a free appointment just to get advice on saving and spending. The women was so shocked that someone my age was asking for advice, she scheduled follow up meetings with me to make sure I stayed on track with my savings. It helped, so do it!
Change your mind-set
It’s not free money… you have to pay it back:
Due to things like student loans and even looking at the borrowing going on in our government, in my opinion I believe that we have taught our generation to be numb to borrowing. We have a mind-set of "we will pay it back later"and that "later is a long way away". We think that because over drafts are interest free its, FREE money and the future is far away, Trust me borrowing will catch up to you and we need to seriously wake up and change our mind-set towards borrowing. I’m not saying borrowing is wrong, I have seen a lot of successful people start business from borrowing. But you have to be smart, ask questions before you spend.