One in four people are already overdrawn this month

A third will be in the red by the end of the month - which could be disastrous

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stack of credit cards debt ...

A new study has revealed that a quarter of Brits are overdrawn by the 17th day after payday. By the end of the month, a third of people will find themselves dipping into their overdraft or spending on a credit card, and shockingly one in 100 people say that even on payday they never manage to get themselves back in the black.

This could have potentially disastrous implications.

The survey, by Thinkmoney, found that we spend an alarming proportion of the month in debt. One in 100 are in debt on day one, one in ten are borrowing just a day later, and a fifth are overdrawn within a week of being paid. A quarter are in the red by the 17th, and a third are in debt by the end of the month.

Alarmingly, the younger people are, the more likely they are to be happy going into debt. Half of 18-24-year-olds are overdrawn for at least part of the month - compared to a fifth of people over the age of 55.

Spokesman for Thinkmoney Ian Williams says: "An overdraft should be a safety net, there to help when something goes wrong. But it appears for many people being overdrawn has become the norm. In fact, many don't regard it as a debt, but it is and spending most of the month overdrawn is a worrying position to be in."

It's worrying enough if there are no unexpected shocks in the household - because people will be paying handsomely for their borrowing, and the longer they spend in the red, the more at risk they face of going over an agreed overdraft limit - which will start racking up significant charges.

Meanwhile, if anything was to go wrong, not only do they have no safety net, but they will immediately find themselves in financial trouble. All it takes is an unexpectedly large phone bill and they find themselves with the choice of slipping into unauthorised borrowing, or falling behind on their bill payments.

What can you do?

The problem is that the right thing to do at this stage is also the hard thing: it involves planning, budgeting, and sacrificing for a few months. You'll need to draw up a budget of everything you earn and spend, and work out how you can cut your costs until not only do you break even, but you also pay back your debts and start to build up a savings pot for emergencies.

This can start with the easy things like shopping around for cheaper utilities, insurance and groceries. However, if you're going to make an impact it may also mean lifestyle changes like giving up TV subscriptions for a while, or severely curtailing your social life until you are back on track.

It's easy to see that for those who are managing on a knife edge, the prospect of all this sacrifice may be decidedly less appealing than the idea of crossing their fingers and hoping there won't be any shocks. However, when a member of the family falls ill, the central heating fails, or someone loses their job, those who have managed to get on a firmer financial footing will know it was worth any amount of scrimping and saving.
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