Considering my options...

WASHER

My advice is to get rid of the overdraft all together, you should be saving a little each month for your safety net. Overdrafts are expensive.

Change banks and put into your old account £200 per month if possible in order to repay your overdraft and ask your bank to reduce the overdraft by the £200 per month. No temptation then to respend on it. Why do you think you need a £5K overdraft?

daviesalie_2

eskkar wrote: »

Hey Davie
I'd like to be out of the overdraft but I'd still like to have it there for emergencies. Imagine you're a trapeze artist and the overdraft is your safety net. You don't want to fall but if you do it's better to have a net there than nothing at all

If you are paying interest on your overdraft its probably more than the interest on a loan would be (the ones I looked at were 8.9% but it would vary depending on your credit history), so why not get a little bit extra on the loan to put aside for emergencies. Put in a savings account thats easy but not that easy to get access to. If you don't take out a loan I really think you should reduce the overdraft limit every month, its just too much of a temptation.

Also, why don't you pay your insurance by monthly direct debit and put say £10 a week aside for car tax, mot, tyres, etc, then you won't need to rely on the overdraft.

foxgloves

You sound just like my partner used to before we both discovered budgeting!! He was worried about not having an automatic overdraft facility, but this was part of the reason he'd regarded his overdraft as additional income for years. The safety net isn't borrowing someone else's money. It's putting a small regular amount aside so that when you have a car repair bill or another emergency (Partner also had to come to terms with the fact that upgrading TV, phone, expanding already massive dvd collection, etc, were not emergencies!) then YOU can pay for it instead of paying to use some else's money. The credit cuture in this country is so ingrained, it can be difficult to get your head round the fact that this is how things always used to be. Some very greedy banks have lent people far too much money and its made us all think we earn enough to finance a lifestyle we can't really afford. I sound like my Mum.......God, how I wish I'd listend to her a bit sooner! So my advice is that your biggest saftey net for now is stop spending. If it isn't something essential, then don't buy it until you are in a better financial position.

pure_dead_dopey

foxgloves wrote: »

You sound just like my partner used to before we both discovered budgeting!! He was worried about not having an automatic overdraft facility, but this was part of the reason he'd regarded his overdraft as additional income for years. The safety net isn't borrowing someone else's money. It's putting a small regular amount aside so that when you have a car repair bill or another emergency (Partner also had to come to terms with the fact that upgrading TV, phone, expanding already massive dvd collection, etc, were not emergencies!) then YOU can pay for it instead of paying to use some else's money. The credit cuture in this country is so ingrained, it can be difficult to get your head round the fact that this is how things always used to be. Some very greedy banks have lent people far too much money and its made us all think we earn enough to finance a lifestyle we can't really afford. I sound like my Mum.......God, how I wish I'd listend to her a bit sooner! So my advice is that your biggest saftey net for now is stop spending. If it isn't something essential, then don't buy it until you are in a better financial position.

lot of sense there Foxgloves, I agree with every word, I'm in my early 50s and thought we could just continue to live beyond our means for ever, and we mostly have the benefit of really good salaries, so you are right it is ingrained into the psychie?? and the difficult thing is believing that its OK not to get something right away but to save and then have it. Go girl (I presume you are a girl:o)