What do you think when you hear overdraft? Debt, financial instability, buying all the drinks?
You aren’t wrong – but you aren’t right, either.
For some people, people that I like to call ‘frivolous’, have landed themselves into grands of debt, by taking out an overdraft that they realistically didn’t need, and spend it willy nilly and wonder why their credit and general spending is so poor.
For me, getting an overdraft was the best decision I made at university – and here’s why:
Firstly, I must outline my experiences with Student Finance – I’m not bashing them or anything, but they were nothing short of awful when dealing with my loan in my second and third year, and put a lot of stress on me financially as they miscalculated my grant, and were calling me up to pay them back (even though it was their fault for miscalculating it in the first place, ha.)
I didn’t end up taking out an overdraft until my second year, mostly because I worked and I felt like I could survive off that comfortably without having to borrow money from my bank.
Getting an overdraft originally stemmed from the fact that my timetable was so brutal in my second year (9-5pm every day apart from Wednesdays, and I worked 3/4 nights a week finishing at 2-4am depending on the night.) and due to this, I couldn’t physically get up for uni most days. This meant my attendance started to dwindle, and my marks weren’t that great either:
Bad attendance = unhappy lecturers
unhappy lecturers = they think you’re a lazy piece of shit
lazy piece of shit = no win for anyone.
And I know at this point, you’re probably thinking ‘why did you choose to work a night job’ and the reason was because at the time, it was convenient in my first year, and no one is expecting a timetable as awful as that.
Secondly, if I didn’t work – I wouldn’t have income, and unfortunately I wasn’t one of those people that had the bank of mum and dad to call whenever I was in a spot of bother.
Anyway, back to the original story. I decided that enough was enough, and I was sick of being tired, having no social life and just being a walking slug.
I cut my hours down, and consequently I made a small step and took out a £200 overdraft. This lasted me a total of 3 months, and once more I extended it – by another £200. Around exam time I had a £500 overdraft, and didn’t feel guilty about it one bit.
My marks improved substantially, and I didn’t feel so controlled by my finances, or by my job (as much as I loved working there).
In the summer I extended it to a full £1,000, alongside working. This paid not only for my deposit but also for some advance rent for my third year accommodation as well as my summer.
Admittedly, I was still tight for money, but it meant I could enjoy myself and travel around to different festivals and not have to miss out.
It was a great decision because it meant that I could cut my hours down at my job, and focus on my studying.
In my third year, I changed my job and worked in retail, around the time of my dissertation deadline approaching I cut my hours down again and extended my overdraft to cover my (very expensive) rent for that month.
My overdraft was at a total of £1500, and stayed that way right up until graduation. I was lucky enough that my bank (Barclays) offered really good student accounts and I have 3 years interest free on my overdraft still, so I’m not going to be charged until 2019, which is great.
I would most definitely go as far as saying that my overdraft was up there with the ‘best decisions’ I made whilst at uni. Some weeks it made a difference between being able to afford food for the week, and my mental health considerably improved when I wasn’t stressing about money all the time.
I think a lot of people rush into overdrafts in their first year, and it seems that other banks almost encourage freshers to do this.
I think I was lucky to have good advisers at my bank who never convinced me to extend it unless I had an ‘immediate need’ and I think that really is the key thing to consider before you make that call/appointment with your bank.
If you don’t have an immediate need for the money, there is no point doing it. Also, definitely check out different banks and what each student account offers, as each bank operates differently on how much you can extend it by on a certain period, and how much time you have to pay it off after you graduate.
*Disclaimer: Everybody is different with money, and has different outgoings & incomings. Do not take this as bible.