Many years ago, I was offered an overdraft by my primary bank and at the time it made sense because I didn’t want any bouncing debit orders that would mess up my credit record but in time, I realised that I had become a slave to the overdraft. I got to a point where my account was always overdrawn to the full extent of the overdraft. I didn’t like this one bit & I realise now that this made me feel really poor. So when I had a bit of cash, I decided it was enough – I paid the overdraft in full. I didn’t close it because as an entrepreneur, my income is not guaranteed.
I notice that most of my customers that have an overdraft facility have their accounts fully overdrawn.
The sad trend is that the more people earn, is the more they just waste their money. Take this customer who has a net monthly income of R75 000 and an overdraft of the exact same amount R75 000. While that is not too bad per se, the sad thing is that by her pay day which is the 27th of each month, she has already spent all her money and her overdraft so basically she is at negative – R75 000 on the 26th of each month. Her salary goes in on the 27th and she then has a Zero balance. Imagine having a net income of R75 000 and yet never having any money! He bank balance is always negative or zero at best.
During our consultation I asked her “so you are now working for the bank?” Shocked she asked “what do you mean?” I told her, “your bank statement tells me that you work for the bank, you are a slave to your overdraft” After a long silence, she admitted “ yes I guess you can say that, sighed…. I don’t know how to break the habit any longer”
I asked her “ do you want to break the bad habit?”
After a long silence, she replied “ yes I really want to but it has NOT been easy. I have somehow accepted that this is it, at least I earn a good salary so I always settle it with my salary”
I have worked with customers who earn good incomes like her and they just spend it all and have very little to show for the good incomes, aside from a nice home and a nice car, sometimes 2 cars. But these are NOT assets! This is another sore point to note. These lifestyle assets give you warm, happy feelings you get when people congratulate you for a nice car or a beautiful home but these are short lived emotions, especially when they are accompanied by such big monthly debt repayments that you are left with nothing and you have to live on your overdraft.
Overdraft & your home loan application
If you manage your overdraft in a similar manner as shown above, you stand a small chance of having your application for a home loan approved or if it is approved, you are likely to pay a high rate of interest. So if you want to indicate that you are credit worthy and you command a better rate of interest, stop using your overdraft because it gives an indication that you cannot live within your means
Fees for helping you to stop being a slave to your overdraft
For R500 a month, for the next couple of months, we will be spending 30 minutes working through her bank statements, credit card statements, car loan statements and all the other debts she has. We are looking for all the “feel good money wasters”. I will turn her finances upside down and restructure her debts and finances to get her to a point where she has about R20 000 overdraft or so, just to ensure NO debit orders bounce and she lives within her very large means. It is time to get real.
So if you too are an overdraft slave and you are prepared to pay us R500 monthly to help you get out of the overdraft slavery, you can email email@example.com
If you want a home loan and you want the best rate possible, contact us at firstname.lastname@example.org