FoxxDenShrink your overdraft a little at a time
For years I treated my overdraft as part of my money. Pay day came in, and within a week or two I was back below zero, living on the bank’s £1,000 until the next pay day. It didn’t feel like debt. It felt like normal.
It took me a while to see it for what it was: I was paying the bank interest on my own income, month after month, just for the privilege of spending my wages before they arrived.
An overdraft you’re in every month isn’t a safety net. It’s a loan you never decided to take out.
Why it’s worth fixing
- It’s dead money. Overdraft interest is often far higher than people realise, and it buys you nothing.
- It hides what you really have. When the overdraft is always there, it’s hard to know what you can actually afford.
- It can cost more than interest. Go past your arranged limit and you can face refused payments and charges you didn’t need to pay.
What I did: small steps, not one big one
I didn’t clear it in one go. I couldn’t have. Instead, I set myself a lower limit than the bank’s and tried to stay above it. Each month I nudged that limit down a little.
Once I’d been comfortably above my own limit for a while, I contacted my bank and asked them to lower the actual overdraft to match. Then I did it again a few months later. And again.
It took about 18 months to get from £1,000 down to £200. That might sound slow, but it was worth every month. These days I rarely go into it at all, and the feeling of not starting every month in the red is hard to put a price on.
How to do it yourself
- Find out your arranged overdraft and what it costs. Your banking app or statement will show both.
- Pick a small step, like £25 or £50 a month. Small enough that you barely notice it.
- Keep your balance above your new, lower line for a month or two.
- Ask your bank to lower the limit. Most banks let you do it in the app, or with a quick message or call.
- Repeat until you reach a level you’re comfortable with. That might be £100, £200 or nothing at all. There’s no right answer, only what helps you sleep at night.
FoxxDen can help with this. Add your arranged overdraft to each account, and set up an optional overdraft plan. Each month it checks your forecast, and when you’re safely above the next, lower limit, it suggests it’s a good time to ask your bank. You’re never forced to do anything; it’s just a nudge at the right moment.
You don’t have to fix it all at once. You just have to start making it a little smaller.