help me see my overdraft as debt

debtfreehopeful_2

thanks everyone a spending diary seems like a good plan, i will keep coming back to this fr the kick i need

pwally2

Hiya debtfreehopeful one way would be to organise your bank to lower your overdraft a set amount each month eg £50 or £100 then you cant use it making you budget better. post up an SOA and the good people on here will add all thier advice.

debtfreehopeful_2

thanks pwally, my soa is above. i dont think i can do that as money comes in in bits throughout the month so i couldnt guarantee that on such a date i would have x amount spare as it changes monthly

foxgloves

My partner was in a similar postion to you a while back with loans but a big overdraft too. I had my lightbulb moment re clearing debt before he did and I couldn't get him to see the overdraft as debt. He'd had it for ever and would almost treat it as additional income. i.e This much is my salary plus I've got that £1500 overdraft or however much it got to. We have now paid off everything except a car loan (budgetted for & manageable) and one other small remains of a loan. However, he found it much easier to get loans paid off & to budget once the overdraft was paid off and his current account was in credit (or at least solvent) every month when his salary went in. It's much clearer to see where your money is going if the amount in your bank is exactly what you have, not having to work in minus figures, etc. We all do things differently, but I'd tackle the debt problem by getting the overdraft cleared first. Do a spending joournal so you can stop frittering the £300 or £400 & get it to offset some of what you owe. We have consolidated smaller loans into bigger ones in the past but ultimately for us, this made things worse rather than better as we borrowed a little more than we needed every time (just in case!) & it has also dragged the debts out to last more years than if we had just persevered with cutting our spending right back to the minimum & paid off the orignal ones. But I can honestly say from experience than once your bank account is in credit, everyday budgetting becomes much easier because what you see is what you have so you are more aware of when you have started paying to borrow someone else's money (which is essentially what an overdraft is) rather than living within your means. Didn't mean to do such a long post, but it just seemed quite like how we used to be. Best of luck with it.

bluebag

I have mentioned before on the forum that I no longer have an overdraft, ever. In the last ghastly recession my bank called the whole thing in at once. Not good! Treat it as the first debt you need to clear. Banks, can at any time call it in. Believe me they do.
I was in a terrible financial position at the time and the stress it caused was hellish. The bank was it's usual 'understanding' self.:(