Hi guys, so today I’m going to talk to you about the dreaded overdraft, things you can do to avoid getting into an overdraft. What even is an overdraft, and just some general financial and budgeting tips. So first of all, what is an overdraft? Well, an overdraft is kind of like free money, but don’t go rejoicing just yet and by free money, I mean you are going
to have to pay it back, so it is really important to check out the repayments,
when you guys have to repay out how much you’re going to have to repay versus how
much you borrow it’s essentially a loan. So try try try as well as you can to
stay out of your overdraft. An overdraft just means that you’ve get like a lump sum from student finance, which is like this side of your bank account, that’s really nice that’s really nice, and then you have zero here which would normally mean that obviously you have no money. Well what an overdraft is the bank will give you, and I say give you very very loosely give you some money in order for you to get through your studies, Now often, these are around a thousand pound overdraft and then they generally increase as you go through university so if you keep your bank account with them open for your first, second and third year, you can also pick up some really really great perks such as free NUS cards and free rail cards and things like that so it’s definitely worth shopping around especially as you have to work out repayments and how much we’re going to have to repay versus how much you’re going to take of your overdraft. So it’s definitely something you have to consider. Please please please read the small print before you open an overdraft. An overdraft is a really great thing to have in the summer holidays because it does mean you don’t have to work if you don’t want to. You can go into your overdraft but please please please be mindful that your first chunk of student loan when you start the new academic year will be used to pay back what you have spent in the summer, it’s not something that you know you can easily wipe clean, it’s something that you’re going to be stuck with paying back So, last year, one of my flatmates had about £3.60 left with a month of term to go before he maxed out his overdraft, which is a terrifying thought. to be in that much debt, especially after paying £9000 a year for tuition and a lot of money to live, eat, travel and things like that. So the less that you can be in your overdraft is great, but sometimes it’s not always an option you can have, I know that the lowest rung of Student Finance barely even covers the rent where I live and the cost of living is really really reasonable. You can get a contract that includes electricity bills and things like that it saves you money which sounds insane because the ticket price is obviously a lot higher if it’s all-inclusive than it would be without. But my friends have gone into a house with the bills aren’t included, actually end up forking out a lot more for unforeseen costs like internet and things, than we ever did when it was all inclusive, and the great thing about that is when you’re living with a lot of of other people, it’s nice to know that they can have their straighteners on and leave them on, I don’t advise leaving your straighteners on. But you know what I mean, if you ever have that person who has every light on in the house and every electronic device, then this gives them the freedom to do that and you can do whatever you need to do and you don’t have to pay out them leaving every light on. So if you are worried about going dramatically in your overdraft and I’m talking, not just a £100 I’m talking maybe into the four digits, then here are some tips about how to hopefully keep you from avoiding it Well, a lot of my friends ask their parents for help, so their parents will pay for their rent and they will use their student loans for the weekly shop. If you are not in a position to do that, which I know a lot of people aren’t then I would definitely advise going getting a job. Now I think I have some fair experience for getting a job, and being a student. So, in my first year, I didn’t have a job, I enjoyed University and it was more about the location of where I was which is half an hour from like the town where I would be working, which was a little bit problematic. It was a half hour bus journey the buses weren’t all that reliable and I don’t want let people down. Whereas, in my second year, I actively started looking for jobs now I’ve had two student related jobs, both have been really really really flexible, they fit really well around my studies and the Student Union job centre will help you with this. Hands down best place to look for student jobs because otherwise you might end up getting roped into contracts that don’t appreciate that you are a student and you might end up working dodgy hours which I’ll explain in another video all about video all about jobs. So getting a job is a great great way to have financial freedom, if you can figure out a compromise where you can work just enough hours, I mean even if you can work to the value of £40, £40 will help you do the weekly shop, it will not be crazy amounts to live on I know people who will spend £40 on a night out and not even blink but 40 pounds is a reasonable amount that you can earn, it will help do the weekly shop and it’ll help you survive, which is kind of what university is all about. It’s about learning those survival skills for later life. So what other things can you do? Well you can budget. I worked out my weekly budget and I worked on my budget per day. Now obviously per day is not realistic but per week is fantastic. I didn’t stick to this religiously, I have friends who do and tally everything that they buy in a notebook and then they work out their finances from there. I personally think that it’s just a little bit tedious and boring and I have several thousand more things that I prefer to spend my time on. So what I do is kind of create a rough tally in my head. I, as a blogger and a vlogger, I really really do like my shopping, so yes, I do spend just a little bit of my earnings on that. Obviously at university, not all your going to pay out for is weekly shops. You do have to live and you have to enjoy it. So if I go out and I see a really really nice pair of shoes, or I see… I bought a tablet in my 1st Year at university, which I have used pretty much every day since. So consider that tablet is like a huge purchase, I said okay I spent this much this week and it’s a lot more than I’m going to spend any other week I’m at University. So how can I compromise that? I basically took a proportion of what I would have spent every week and saved it to put it towards paying for that, but you also have to remember when you’re spending like that, to always leave some money for rainy days. Whilst at university, my laptop broke, my phone screen smashed, it was just disastrous, so I always had to have a little reserve for emergencies. Now looking back that wasn’t much of a major expenditure. It was relatively cheap to get fixed, quick and easy and sorted itself right out but at the time, it felt disastrous. It was it relative sum of money that was going towards something that I really didn’t want to have to pay for but had to anyway. Saving some money for a rainy day is excellent and that’s kind of why the overdraft is really good idea, because if you do hit absolute zero, and then something catastrophic happens you’ve always got that extra money to fall back on. I kind of agree with the overdraft, I think it’s a really good idea but, you have to also learn to budget and act responsible with your money because if you think that the overdraft is essentially a bunch of free money that you’re going to get you’re going to get yourself in trouble. So I know this video was a little bit more serious than a lot of my videos but I feel like an overdraft is a serious thing that you have to treat well otherwise it can have a knock-on effect right up until you’re in your first job and you’re earning that and you’re paying back what you spent as a student and you will really regret it if you do go that far into your overdraft. So try and be mindful of your finances but enjoy yourself at the same time, and I’ll speak to you guys next week. Bye!