Finding it tough managing my OD, any advice?

L-M

I was hoping maybe a wise and knowlegable DFW could help me out a bit:D

I have got several debts, some small some not so small:o I have done a snowball calculation so I know which ones to target first. I can't so my SOA just yet as Im still waiting for my income details to be confirmed

The problem I'm having is this...

I have a big overdraft on my current account (£2700) for years now I have lived in my OD, so eg if there is £300 available I think of that as 'my' money- what I've got to spend/pay bills with. When I've tried to pay off my overdraft in the past I let a bit of money build up but then have just spent it when I've needed it for other thingss:(

So how do you pay off an OD while still using the account? I would like to be able to put a set amount towards it each month, would it be easier to put the money in a 'savings' account then pay it off when it's built up? (I know interest wise this would not be a good move!) I'm really embarrased that I'm finding this so difficult:o

VanillaDelia

The best thing to do is to decrease it each month by the amount you can afford to lose from your wages...e.g. £100. What you leave with the intentions to try and pay it back, decrease it by that amount.

special-k_2

Hi there,
I'm no expert, In fact i'm new to this, and am very much in a similar position as you! I live in my overdraft, and have decided I would apply for a balance transfer. search that in this website, and that is the action I have just decided to take.
I have opened an account with Virgin, and decided that I am going to make a transfer to my current account to pay off my overdraft, then I am going to make a direct debit each month to the new virgin card in order to start paying off the debt - Virgin is offering 0% for 14 months. There are some small fees to do this, think it worked out at £40 per £1000, which is added to what you owe, and included in your monthly direct debit to them. Hope this helps, good luck. K xx

Fiddlestick

L-M wrote: »

So how do you pay off an OD while still using the account?

Either have the willpower not to touch the money or call the bank up and reduce the overdraft limit each month.

Make sure you stick to it though, as if you go over the new limit you will end up with charges and that's likely to put you in a worse position than you were before.

nicnoo99

I'd like to 100% echo what special-k said. I did exactly this in April this year with 2 x overdrafts and 1 x CC. I was doing exactly the same as you, living in my overdraft and seeing the end of the limit as the end of my money.
You need a LBM to realise that this is debt and not your money at all. Try imagining it was on a credit card and how much you'd want to pay it off. How much interest are you paying on it?
Can you get a 0% deal?
Also looking forward to seeing your SOA eventually.
Otherwise you just need some willpower, or a system. You could pretend to yourself that your overdraft limit decreases by X a month?
Best of luck - and well done for realising that living in your overdraft is not a viable long term solution. Even though I'm still paying the debt off, it's such a good feeling looking at my bank account and seeing positive numbers there. One month I accidentally went £20 into my overdraft and I was so angry with myself - what a turnaround!

special-k_2

nicnoo99 wrote: »

I'd like to 100% echo what special-k said. I did exactly this in April this year with 2 x overdrafts and 1 x CC. I was doing exactly the same as you, living in my overdraft and seeing the end of the limit as the end of my money.
You need a LBM to realise that this is debt and not your money at all. Try imagining it was on a credit card and how much you'd want to pay it off. How much interest are you paying on it?
Can you get a 0% deal?
Also looking forward to seeing your SOA eventually.
Otherwise you just need some willpower, or a system. You could pretend to yourself that your overdraft limit decreases by X a month?
Best of luck - and well done for realising that living in your overdraft is not a viable long term solution. Even though I'm still paying the debt off, it's such a good feeling looking at my bank account and seeing positive numbers there. One month I accidentally went £20 into my overdraft and I was so angry with myself - what a turnaround!

-Great to hear from someone that this is working for!! Well done you! All the best... K x

pinkarsenalprincess

I did the balance transfer thing too and I feel like a huge weight has been lifted from my shoulders. I had two o/ds both at £2000 and it was getting so difficult to pay money into one to try and clear it and then be back at square one every time they charged me the £100+ interes/fees. I also found it incredibly hard to stick to my budget when I was in minus figures and kept having the wrong attitude about my O/d.
My balance transfer cost me £72....less than one months interest and I have 14 months at 0%. The O/ds have been drastically reduced so that I can't build up more debt in them and have it on the CC too.
I feel so much more able to budget properly now and enjoy seeing my money in my account. It has made me think twice about any spending now as I like keeping the money in my account 'high'!

I wish I had done it years ago. The bank convinced me that I would be able to get out of my graduate O/ds before they started charging interest, but I never did in 3 years.

isy1011

I have a spreadsheet and each month I put in my overdraft level and make sure it is less than the month before.

Katyroo62

I was/am in a similar situation. A few big bills and issues with my car etc left me in my overdraft permenantly. I decided a couple of months ago to take control of the situation. I worked out how much realistically I could afford to pay off each month and looked at how much my overdraft was on the day before pay day. I then wrote a list with how much i'm aiming for my overdraft to be each month. For example my October aim is -£2600, my November aim is -£2400 etc. I'm hoping that by November next year I will be overdraft free.

Watalie

isy1011 wrote: »

I have a spreadsheet and each month I put in my overdraft level and make sure it is less than the month before.

That's a fab idea - I consider myself to be the spreadsheet queen but I'd not thought of that!

I have a savings account where I'm saving monthly to pay it off. My o/d is £1320, it'll take me 11 more months to pay it off and I know it's bit daft saving the money in a separate account but I'm making sure that temptation to spend it is removed from my hands!! When I've saved up enough to clear it, I'll pay it off and reduce to something more appropriate.

closed

Saving money in a savings account to pay off an interest bearing overdraft makes your debt position a whole lot worse.

http://www.moneysavingexpert.com/savings/pay-off-debts