Help In Clearing Debt Faster

GreenSaints

Hi All,

Today I received a call from First Direct regarding my joint account. Basically long story short, we have a £1000 overdraft which we are in every month and have been frequently over due to the mortgage and other bills coming out at the wrong time of the month before our share of the money goes in. He basically said keep doing this and we can refuse to pay any direct debits that need to come out and you don't have the funds.

So, we need to get out of this debt and reduce our bills where necessary. Simples? The only problem is, I just need some advice on some options I've come up with. With my own debt (detailed in my signature) I can manage that and already this year cleared another overdraft of £1000.

OK, the things I've come up with:

Stop mortgage over payments for a few months (currently £214) Reduce electricity payments (currently £83) Question - how can we change supplier if we are in debit to our current one? Reduce food shopping weekly bill to £30 (currently £50-60)

Also, for both mine and this joint debt, if anyone has any ideas on how to clear debts quicker would be greatly appreciated. Selling items is no longer an option as we've already done that and have a nice minimalistic house! :rotfl: We don't have jobs where we can get overtime and I already do surveys - so any other options would be great.

Thank you in advance

Tixy

I'd stop your mortgage overpayments for at least a couple of months, to get you the right side of your overdraft, so that you ensure you never go over the limit. On top of first direct potentially recalling the whole overdraft by going over your limit regularly this is likely to severely hamper your chances of getting new 0% cards when your deals finish.

Any particular read for the overpayments compared to putting the money towards something costing your more money? I see your cards are at 0% but presumably your overdraft costs you each month? and certainly if you go over the limit? What is the APR on the mortgage, i.e what rate are you saving by making the mortgage overpayments?

If there are just the 2 of you I'd also try to reduce/limit grocery shopping to around £40/ week

DizzyDizzy

I think it will help if you also become super-organised regarding your DDs to. We have a timetable pinned on our fridge detailsing exactly how much comes out of the bank account and on what date. That way we always know what we need to have in the bank account everyday. We also check the bank balance every morning before work - that way I know if I need to move money around at lunchtime to top up the account!

Also - it might be an idea to double check your banks policy regarding when a DD will clear. For example, Natwest will allow a DD to clear if you pay cash in over the counter at lunchtime on the same day. However Barclays won't - the money has to have cleared the day before, and on the day you can't do anything to affect the balance.

Hope this helps - I know after doing this for a couple of months we've stopped all bank charges reoccuring and that has also helped us to have a bit more available cash!

topcat9

Hi GreenSaints,

You may also be able to change the dates of some of your direct debits to ones which suit you better. I did this with Egg when my husband changed jobs and the day he was paid altered.

fracturedsun

I don't know if this a second account you have or not but if so this may help. I get paid weekly (urgh contract work) and pretty much everything goes out monthly. So I worked out what all my direct debits and standing orders add up to a week (rent, phone, bills etc including the odd quarterly payment) and set up a direct debit so the money for these go out immediately from my salary every week and then sit there in credit ready for when they are taken from the account and so I don't end up overdrawn.

This also means that I know that the money I have left in my other account is not needed for anything else and I can see how much I have left to budget and save with.

GreenSaints

Hi All,

Thanks for your replies.

Tixy - we are on a variable mortgage at the minute (and have been since our 5 year fixed finished nearly 2 years ago) at it's at 2.5%. The reason for the overpayments is simply to get rid of it quicker.

Being £1000 overdrawn with FD costs us £5ish a month.

As my CC are my debt and not my boyfriends, the extra money wouldn't go on that.

DizzyDizzy - The man from First Direct is going to send us a list of all our direct debits and standing orders with the dates, so the idea of putting them on the fridge is great

Thanks for your responses so far - any other suggestions would be great