Turn your debt to riches and tackle your overdraft with these 3 simple steps

Tim Mak
Tim Mak
Dec 2, 2019 · 3 min read

Financial independence doesn’t have to be a mystery anymore.

The elite group of people who have figured out how to retire early and make their dreams a reality, all have a single trait in common.

Financial mastery.

By utilising a few key strategies, they have managed to build their money and eliminate negative assets. Let us share some of these tips to help you stop your debt from spiralling out of control and get back on the road to wealth.

What is an overdraft?

Before you learn how to take control of your finances, you first need to understand what type of debt you owe.

If you have gotten yourself into trouble financially and need a little cash boost, your bank will allow you to borrow a small lump sum of money through your current account.

The trouble is, like debt, you are borrowing money and there is usually an extra high-interest charge added on top that you will need to pay back. If you are not careful and leave it too long, the amount you will have to pay will grow to be substantially larger.

In 2018, it was reported that 25% of all UK adults have taken out an overdraft loan in the year, with interest accumulated equivalent to roughly £1.2bn a year*. With proper money management, there doesn’t have to be any nasty added charges being racked up.

1) Focus on paying off the highest interest debt

You first need to start off with a debt-busting game plan. List out all your debts (If you have more than just the overdraft) and figure out which one has the highest interest rate*. You should prioritise your efforts on paying this off first, to prevent the compound interest from getting out of hand. If you are successful, it will feel like the rest of the debts that you may have will be easier to start tackling as well.

2) Utilise the 70/30 rule

The aim of this rule is to put away a % of your income* and assign portions to different things. You can however, adapt this rule to pay off your debts. To use this rule effectively, want to calculate your monthly take home pay and split it up into percentage where:

  • 70% is used to pay off your monthly expenses.
  • 10% goes towards paying off your debts.
  • 10% goes towards savings & investments.
  • 10% is put towards donations to charity.

So for example, if you earned a salary of £29,400*, then your monthly take home pay after tax would be roughly £1,960.80 a month. Of this £1,372.56‬ (70%) would go towards expenses, £196.08 (10%)‬ would go towards paying off debts, £196.08 (10%) would go towards savings & investments and £196.08 (10%) would go towards charitable causes.

3) Start keeping a close eye on your money

Keeping tabs on your expenditure will help you realise where most of your money goes, allowing you to better plan where you can make adjustments to your spending.

It can sometimes be very difficult to know whether you are overspending, especially if there is no easy way to keep track of your weekly spend. There are many useful budgeting apps available to use and even if you are more traditional a spreadsheet can also work just as well.

Knowing what money is coming in and how much of it is going out will help you understand your finances and know how fast you can get to your financial goals.

The Zeux app can make this easier for you with its itemised transaction history and categorised spending feature, you can also easily track your daily and monthly spending from your Zeux account at a glance.

Start managing your money better and tackling your overdraft with Zeux, where money never sleeps.


FinTech, Lifestyle & Tech, Blockchain & Personal Finance content

Tim Mak

Written by

Tim Mak

Head of Marketing at Zeux



FinTech, Lifestyle & Tech, Blockchain & Personal Finance content

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