How to clear my overdraft

JOOLS13

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 459
Total monthly income.................... 1759

Monthly Expense Details
Mortgage................................ 438
Secured/HP loan repayments.............. 182
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 33
Telephone (land line)................... 16
Mobile phone............................ 10
TV Licence.............................. 13
Satellite/Cable TV...................... 36
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 10
Petrol/diesel........................... 40
Road tax................................ 10
Car Insurance........................... 32
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 6
Life assurance ......................... 7
Other insurance......................... 0
Presents (birthday, christmas etc)...... 57
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
swimming lessons x 2.................... 35
lottery................................. 5
school dinners x 2...................... 64
Total monthly expenses.................. 1616


Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 121500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 53000....(438)......6.24
Secured Debt.................. 15000....(182)......8.2
Total secured & HP debts...... 68000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 1,759
Expenses (including HP & secured debts). 1,616
Available for debt repayments........... 143
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 143

Personal Balance Sheet Summary
Total assets (things you own)........... 121,500
Total HP & Secured debt................. -68,000
Total Unsecured debt.................... -0
Net Assets.............................. 53,500

When you look at this is does not look too bad, but my problem is the overdraft. We have an overdraft of £1700 on our account and we are constantly overdrawn to the max.

Any advice would be appreciated :rotfl:

Tixy

Hi and welcome and well done for posting.

I think the reason it doesn't look too bad is that whilst you are showing a surplus of £143 a month you haven't budgeted for everything you need. I would guess you need to budget for car maintenance (take the total spent last year on MOT, servicing, tyres etc and divide by 12 to get a monthly budget), and probably haircuts and something for entertainment. As you haven't included the overdraft in the list of debts you haven't built in the cost of the overdraft, whether you pay a daily fee or an interest charge there will still be a cost each month that you need to include.

I would guess after those items your surplus is probably less than about £70, and if you don't have this then its a good idea to try to identify where its being spent. A spending diary kept for a couple of months might help you find this.

As you want to reduce your debts down then I've made some suggestions below about where you may be able to cut some costs

JOOLS13 wrote: »

Electricity............................. 50
Gas..................................... 5shop around for gas & elec to see if you can find a cheaper supplier, also look at the different tariffs available as the online bills tariffs are usually cheapest.

Satellite/Cable TV...................... 36 reduce to a lower package or switch to freeview (or threaten to cancel and see if they will offer a reduced deal for 6m or 12m)

Groceries etc. ......................... 400 Could trim quite a bit off this with some changes to your shopping habits. Should be able to do for £250 if you need by trying things like changing where you shop, the drop a brand challenge, meal planning for the week before you go shopping, cooking more from scratch etc.

Presents (birthday, christmas etc)...... 57 this is pretty high, could be reduced if you need to.

Is the adult who doesn't work looking for work? are you getting all the benefits you are entitled to?

JOOLS13

Thanks for the advice. I see what you mean about not listing everything, i will re-calculate!

My youngest son has just started school so i am looking to get back to work, just part-time, not sure if we will be any better off financially though.

We don't receive any benefits as my husband apparantely earns enough, so we have to pay for everything.

Thanks

Tixy

Good luck with the job hunting.
With the benefits - you are getting child tax credit I assume at the moment? along with child benefit? and are you gettin JSA now you are looking for work?
This calculator is quite useful to check you are getting all you can - http://www.turn2us.org.uk/benefits_search.aspx

david_hellier

Unfortunately overdrafts are very difficult to reduce because it is necessary to effectively ignore your bank balance. I suggest you allocate a specific monthly amount in your budget towards a payoff of the amount including any interest and charges. If you keep to your overall budget, you should see the balance fall back to zero. The spending diary idea of Tixy is ideal for this as helps to keep on track.
Regards.

JOOLS13

In response to the reply which Tixy sent, apparantely i am not entitled to JSA as i left work to start a family 6 years ago so i have not paid enough stamp to claim. Even though i have worked since leaving school at 16 and i am now 36 ! :mad:

2tontess

We are/have been in a similar position to yourselves, income, overdraft, soa all pretty much the same. Over 18 months we have decreased our overdraft from £1500 to £250. It was so frustrating to continuously feel as though we were chasing our tail. I got into the habit of calling the bank on payday and decreasing the overdraft limit in small amounts depending upon what expenses I knew we had coming up throughout the month. Sometimes it was £25, other times £100. We have also drastically cut our groceries down from £400 to £250 - 300. I now get my shopping delivered at the cheapest time (Tues night) and top up on a Sun morning with fresh produce and lots of reduced meat. I meal plan around whatever meat we have. Once a month I make sure we have a meal of what we fancy (usually steak). It's not easy initially but once you start seeing the light at the end of the tunnel it becomes a piece of cake. Good luck, your on the right path!

JOOLS13

Thanks 2tontess for that information, it's nice to read and it proves it can be done!