sick of living on the overdraft

hdmummy

Hi I need some enlightenment!!

We are currently using our overdraft as we never seem to be able to get in the black. Its a real stress because obviously once that runs out we have no money at all, and its even reached the stage where we have not been able to pay the mortgage on a number of occasions. Our mortgage provider is really good and we have an arrangement in place and we have arrangements with credit card companies.

We are doing things like selling on ebay etc but I wonder is anyone has any ideas what to do re: getting back in the black. Everytime we pay money in it just gets eaten up by the overdraft its a vicious circle and we are getting sick of it. Really don't know how to get out of it.

Thanks
xx

MartinSpoon

Do you have a budget that you worked out, and that you use to track your purchases? That's the first thing you always need to do. You should complete a 'Statement of Affairs' (SOA) so you have all incomings and outgoings recorded, and then post it on these forums, where the good people of MSE can offer advice. There is a sticky post at the top of this forum section with info on SOAs.

Your SOA will tell you what you have available for debt repayment. Depending on how quickly you want to get back into the black, you'll simply need to adjust your available budget (e.g. spend less on groceries, cook more in bulk and freeze to reduce costs etc).

If you have CCs and/or loans, balance transfers etc may help ease the burden - once again, posting your SOA can help us help you with advice.

Sorry, no magic bullets here!

poppasmurf_bewdley

You could open a basic bank account and use that to have salaries paid in, and direct debits, etc, paid out. Then there is no future facility for an overdraft.

Then contact your present bank and arrange to pay your overdraft off at a rate YOU CAN AFFORD. It may affect your credit rating, but that's better than being skint all the time.

CH27

Do a SOA & keep a spending diary.
That will give you a true picture of what & where you are spending.
You can then work out how much you can pay off your overdraft each month.

Still-in-debt

poppasmurf_bewdley wrote: »

You could open a basic bank account and use that to have salaries paid in, and direct debits, etc, paid out. Then there is no future facility for an overdraft.

Then contact your present bank and arrange to pay your overdraft off at a rate YOU CAN AFFORD. It may affect your credit rating, but that's better than being skint all the time.

We did something very similar to this.
We opened a basic account with Co-op that we use for day to day things and grocery shopping, Oh's DLA and ESA get paid into this account.
My wages get paid into our overdrawn account and all our direct debits come out of them. Any left over gets left for the overdraft........there's not much, but the bank seem to be happy enough!

JLL

I set up a payment plan for 6 months with the bank. They reduced it by so much a month. I asked for this and they set an amount that i thought we could afford. It was a struggle but 31 July was our last payment to them. I didn't think we would manage it once we were in it but we did.

sharronej

HD Mummy,

I am childminder and one of 'my parents' used to be a bank manager, he once told me that this was the number one question of couples needing to cut their budget. The ideas above are all really good and we've actually just opened another account ourselves for putting our wages into (we're both self employed) and set up transfers into three other accounts to pay the dd's (I think Martin Lewis calls it Piggy Banking) and it's a really good first step. Once you've decided on a system then it really is down to hard budgeting - cutting back on everything you can which isn't essential. Try the Grocery Challenge boards and have a look at the other boards such as the nsd boards, keep posting for other ideas but unfortunately it'll be hard work however if you're both committed then that'll make it easier and you might even find aspects of frugal living fun