here's my idea...any thoughts?

angelpye

daveskey69 wrote: »

but how can i reduce it each month, if i still find myself needing it all the time.?

But then the obvious question is where is the money going to come from to pay it off slowly if you have a seperate account?
I would definately do a SOA and see what advice the experts can offer - I 'ghost' on here often and they are always offering realistic friendly advice.

JoKay_2

daveskey69 wrote: »

but how can i reduce it each month, if i still find myself needing it all the time.?

I agree with angelpye - you do need to work out where you're overspending, and completing an SOA would be the first step to that.

When I first opened our separate account, I must admit I plucked a figure from thin air as to what we would need to live on over the month (although this was based on us still having enough money left in the bills account to pay some money off the overdraft).

We found that by tracking exactly what we were spending the money on (on a spreadsheet), it really made us think twice about going out for a meal, going to the cinema etc. That's not to say that we didn't - but it was very empowering knowing that we could do it with a clear conscience and could afford it.

daveskey69

i do see what you are saying and we are going thru our finances carefully.
my plan would be to leave an amount in the account each month, so gradually we would be paying it off.

Jesthar

daveskey69 wrote: »

i do see what you are saying and we are going thru our finances carefully.
my plan would be to leave an amount in the account each month, so gradually we would be paying it off.

This is where doing a full Statement of Affairs will really help you - it breaks everything down into specific categories so you can see exactly where all your money is going. It also has spaces for you to input any debts you have, and does a whole raft of calculations which comepare you incomings, outgoings and debt payments so you get a fully accurate picture of your current position and where you can/need to make changes.

The SOA calculator is here: http://www.makesenseofcards.com/soacalc.html - use the 'MSE' button in the 'format for discussion board' section and you'll be able to copy and paste the results in here so people can help you with what to do next.

As to your overdraft, if the problem is that you take it to the limit (or over) every month, then setting up a new bank account is more trying to work around the issue rather than addressing the root cause, I think? If you simply reduce what you spend, then you will not go over the limit and incur charges - or at least progressively reduce how much you go over by and the charges you get. Yes, it's going to take a while, but that will be the same whicever route you chose.

Apologies if that sounds a bit simplistic or patronising - it's not meant to be, I'm just trying to understand why you feel the need for a separate bank account. It's perfectly possible you have other things on your plate I'm not taking into account (this is where the SoA rally helps). JoKay and anglepye both have an excellent point about keeping a spending diary, too - I do even though I only hve a mortgage and student loan, and it really helps keep everything under control so I can overpay my mortgage.

~Jes

Elsas_mamma

Hi,
We are thinking of doing a similar thing. We are going to keep the account and have my wages paid into it and our direct debits/ standing orders come out of it. The money left (about £90) will be left there to go towards the overdraft.
OH is not working at the mo, so any benefits we recieve would go into the new account for our general living expenses and hopefully a bit of savings!!
K

Little_Miss_Uni-Debt

Hi,

I don't post often on here but with this one I felt I should as I was in the exact same situation with HSBC this time last year. This will be a very long post - so apologies in advance! My advice is yes, most certainly. Treat your overdraft as a separate debt. It is the only way to stop using it each month.

I had an overdraft with HSBC (which I used to the max each month as I had been made redundant and got a lower paid job) but I also had a graduate loan with HSBC. They regularly 'off-set' money from my current account to go onto my loan. 1/2 payments, two full payments taken the same day I had been paid. They basically took what they wanted and I didn't know what I would be left with to live off. :eek:Then when my own regular direct debits went out days later they would get returned as I was up to my overdraft limit again. I would get charged for going over my overdraft limit, charged for a returned payment and charged again for an 'informal' over draft request. HSBC would charge me a total of £75 for one direct debit that was over my overdraft limit plus interest for every day too!!! If that isn't punitive then I don't know what is! Then I'd also get charged at the other end i.e my credit card company for missing a payment. It got very stressful not to mention the damage it did to my credit score!!!!

I decided to do what you are looking into and get out completely. I did a very accurate SOA for my regular bills for each month and opened another account just for bills ( with a small overdraft) Then the following pay day I drew out the amount needed for one months bills and paid that into my new bill account. I promptly cancelled my direct debits with HSBC and set them up with my new Lloyds account which had a months bill money waiting patiently in it.

I then opened another simple bank account with Natwest - NO overdraft. I contacted my employer and changed my bank details so that all my wages went to there. I then set up 1 direct debit for the first of the month to go to my bill account.

I also contacted HSBC for a copy all of my previous bank statements, invested in a snazzy highlighter pen and sat and went through every charge they had ever put on my account. It sounds a boring task but when you total it up it is really astonishing!!! I wrote a list with the amounts taken and each date. I was very organised and I think this helped my claim greatly.

Then I enclosed this list with a letter to HSBC exlplaining how they were compounding my financial difficulty and requested they return the charges to the account based on the fact I was in financial hardship. I have a list from the FSA what is classed as hardship and it is surprisingly a wide range of things. I think if you have over £300 of charges in any one financial year then it is certainly worth it.

I sent the letter even though the bank charge case is on hold and I waited. I did get a standard letter in response saying the chages were fair etc but I followed up outlining the same details again. They then refunded over £400 of charges to my account which has helped me to clear a good chunk of my overdraft. I now only pay in to HSBC what I have to, to service my loan each month. Also I'm set up with a good system of managing my spending money, debts and bill money. No more worries!!!

I doubt HSBC are worried about you when they stick you with extra bank charges each month so why should you worry how much goes through your account each month. Separate it and pay it off. I'd certainly recommend it.

Hope this helps! Let me know if you would like to see a template of the letter that I used to help me claim my charges back.

daveskey69

thanks so much for the response. I am still probably thinking of doing what i said before.
Still get everything paid into HSBC but then just transfer it all out to a new account, except for leaving a little bit in it so the overdraft will go down.
Any ideas on the best new basic account to get?
should I get one with my current bank, or use a totally new bank?
All I need is an account with internet banking.
thanx again.

Elsas_mamma

Quote

'Any ideas on the best new basic account to get?
should I get one with my current bank, or use a totally new bank?
All I need is an account with internet banking.'


We have been looking at the Co-op. No overdraft
We decided it would be better to go with a different bank after reading on this site about the banks taking money from accounts to pay any other accounts you may have with them - can't remember what it is called.
K