How do I get out of my overdraft?

Tixy

Catriona_P wrote: »

That was part of my original question - is it worth doing this by opening another account? Is it working for you?

I think it tends to work for people in terms of being able to see it as a separate debt to tackle. But doing it that way can work out to cost a lot more in interest, as you are charged for being at the full level of your OD for the whole month, rather than the daily balance of your salary going in and then gradually going out.

I'm sorry you feel things are not improving much. Its great that you tried talking to OH, but its a shame he hasn't compromised as much as he perhaps could have done.
You say none of your outgoings have gone down, and I know thats depressing but remember that costs in general are going up - with things such as food etc. If your costs have remained level with where they are then that does show you've managed to make some changes.

It does sound like there is no instant fix for you to be able to pay off your debts quickly, and so even if you are only paying small amounts off each month then its better than paying off nothing, or slipping further into debt.

Keep going.

rising_from_the_ashes

AlwaysWorking wrote: »

I opened another bank account and have gotten my wages transferred there. I am then putting money into my overdrawn account each month in an effort to pay it off.

Catriona_P wrote: »

That was part of my original question - is it worth doing this by opening another account? Is it working for you?

The problem with doing this is that if the bank see your wages are no longer going into the account - they may well call in the overdraft.

You're much better to mentally reduce the OD limit in your head (eg by say £50 / month) and stick to that.

What you could do is .... keep your wages going into your account with the OD but transfer all the D/debits to the other account and then pay in a set amount each month to cover all the payments that come out (but you don't use this account for anything else - no switch payments / no cash withdrawals etc)

2 great advantages of this a) you will never miss a payment as there is always enough money in to cover everything and b) you know what is left in your main account is "yours".

I did this a while ago and I must admit it's been fantastic - no worrying in case a payment hasn't yet come out your account etc.

I also then withdraw a certain amount each month on payday (up to the OD limit - what I'm paying back IYWSIM) and that's what I had to spend. I then didn't use this account for anything else (no switch payments / no cash withdrawals) and at the month end, I'd have reduced the OD limit a little.

Catriona_P wrote: »

This lunchtime I sat down with the budget planner I've had for myself since last July and worked out if my outgoings for the categories I use (baby, food, bills etc) have gone down since I started putting it together. None of my outgoings have gone down. I'm so depressed about this I could cry.

Off to have a look at your SOA to see if I can suggest anything (((hugs))) - it will get better.

rising_from_the_ashes

rising_from_the_ashes wrote: »

What you could do is .... keep your wages going into your account with the OD but transfer all the D/debits to the other account and then pay in a set amount each month to cover all the payments that come out (but you don't use this account for anything else - no switch payments / no cash withdrawals etc)

1st thought immediately springs to mind - and you don't have to say anything but maybe something to think about..... why are all your finances separate when you have joint bills?

What a (sorry) but pain in the butt way to organise things that whoever's paid more gets money off the other ....

2 options - either set up a joint account which all the bills are paid out of & you both pay a set amount to them each month or all the bills come out your 2nd account (as above) and DH transfers a set amount to this each month.

SOA comments - you may have already seen / sorted some of these out as I haven't gone through the whole thread.....

• Income - you must get some benefits ......
• Mortgage - this is huge if only 50%
• TV license @ £18.82 - this should only be £12.37 so 50% = £6.18
• Landline @ £14.14 - on the high side if this is 50%
• Groceries @ £150 - high if 50%..... try the Grocery Challenge on the Old Style board as a comparison families of 4 manage on £220 (incl cleaning stuff, toiletries & nappies etc). Very friendly bunch, loads of fab recipes & great tips (don't know if you know but Al*di nappies are supposed to be absolutely fantastic & a fraction of other sm or branded ones)
• Satellite/Cable - sorry not essential until you've paid off the OD
• Mobile - can you drop a tariff?
• Presents - on the high side, try to cut in 1/2
• Other travel - anyway to reduce / get lifts to work? If you don't use the car very much (which is obvious from the petrol spend) it may well be more economical to get rid of it - a hire car for when you visit family could well be cheaper

Catriona_P

rising_from_the_ashes wrote: »

What you could do is .... keep your wages going into your account with the OD but transfer all the D/debits to the other account and then pay in a set amount each month to cover all the payments that come out (but you don't use this account for anything else - no switch payments / no cash withdrawals etc)

2 great advantages of this a) you will never miss a payment as there is always enough money in to cover everything and b) you know what is left in your main account is "yours".

I did this a while ago and I must admit it's been fantastic - no worrying in case a payment hasn't yet come out your account etc.

I also then withdraw a certain amount each month on payday (up to the OD limit - what I'm paying back IYWSIM) and that's what I had to spend. I then didn't use this account for anything else (no switch payments / no cash withdrawals) and at the month end, I'd have reduced the OD limit a little.

That sounds like a good idea - I'm going to look at my direct debits later and see about it. I know when they all go out but if I put the money in a separate account, you're right that it might be easier to focus on the rest of my non-essential funds.

rising_from_the_ashes wrote: »

1st thought immediately springs to mind - and you don't have to say anything but maybe something to think about..... why are all your finances separate when you have joint bills?

What a (sorry) but pain in the butt way to organise things that whoever's paid more gets money off the other ....

2 options - either set up a joint account which all the bills are paid out of & you both pay a set amount to them each month or all the bills come out your 2nd account (as above) and DH transfers a set amount to this each month.

You're right about it being a pain to keep finances separate. It IS a pain, but I prefer it that way. He's very controlling about money - I get the third degree for spending any money unless its something he deems that we need and I find it very stressful. We have discussed setting up a joint account for bills but he says the mortgage 'has' to come out of an account that at least one of our wages goes into. Whether this is something he's decided or our mortgage company have I don't know. I will suggest it again though.

rising_from_the_ashes wrote: »

• Income - you must get some benefits ......
• Mortgage - this is huge if only 50%
• TV license @ £18.82 - this should only be £12.37 so 50% = £6.18
• Landline @ £14.14 - on the high side if this is 50%
• Groceries @ £150 - high if 50%..... try the Grocery Challenge on the Old Style board as a comparison families of 4 manage on £220 (incl cleaning stuff, toiletries & nappies etc). Very friendly bunch, loads of fab recipes & great tips (don't know if you know but Al*di nappies are supposed to be absolutely fantastic & a fraction of other sm or branded ones)
• Satellite/Cable - sorry not essential until you've paid off the OD
• Mobile - can you drop a tariff?
• Presents - on the high side, try to cut in 1/2
• Other travel - anyway to reduce / get lifts to work? If you don't use the car very much (which is obvious from the petrol spend) it may well be more economical to get rid of it - a hire car for when you visit family could well be cheaper

• Income - we get £81 a month child benefit which goes into his account. Until January when I asked him about it he was taking the lot himself, but now he splits it (although as I've said, I buy 95% of baby stuff, but he won't budge).
• Mortgage - sorry that was an error on my part. Our house is worth £160k when we bought it, not £80k as I put. Jointly it costs £986 a month (so £493 a month for me). We have another 18 months fixed rate.
• TV license - another error on my part. We did pay quarterly which is £150.48 a year. I've now changed it to monthly since I did the SOA as you get charged an extra £1.25 a quarter more for paying quarterly for some reason.
• Landline - this IS expensive. Since I did my SOA I spoke to BT as I felt it was too high, they told me it was fine and they'd review in 3 months, which should be coming round now. I'm going to chase them again
• Groceries - I have managed to cut down a bit since January, and have been encouraging husband to do the same. I can usually get my fortnightly grocery spend to about £37 when it was at £50 - but I keep this quiet from him as he usually still spends £50 and gets the hump if I spend less than him as he thinks it means the lions share of grocery costs are on him. Which isn't true. Thanks for the tip about Aldi nappies - I use As*da Little Angels during the day as they're cheap, and only Pampers at night as the little one gets a sore bot. I've looked at the Grocery Challenge but will go back to it, I think I can probably do more.
• Satellite - Agreed its not essential, I have suggested we get rid of it but husband disagrees. To be honest as we don't get to go out anymore it is quite important to both of us.
• Mobile - In October I went to contract as my PAYG phone was getting old (I've had it for 6 years) and was costing me too much in top-up. I'm actually saving £5 a month on what I was with PAYG so I'm ok with that for the moment.
• Presents - Have been cutting it down as much as poss. Not easy, and embarrassing to me, but I'm doing it by being cleverer about where I shop (and getting cashback etc).
• Other travel - I walk to/from work almost every day with the little one (but I do have the occasional morning where I need to visit another site for work so need the car). The main cost here is husband's train season ticket - he has a long 2 hr each way train journey every day which costs a fortune. He's been trying to get a job closer to home for about 18 months but hasn't had much luck at interviews. His job is specialist so there's not many around. Not sure a hire car would be the best option really.

I hope this doesn't sound like I'm just rubbishing all your suggestions, I'm really not. I really appreciate you all taking time to talk to me. It's really hard not to see a way out and when you feel like you've been making progress but the figures say otherwise it really blows the wind out of your sails!

rising_from_the_ashes

Catriona_P wrote: »

You're right about it being a pain to keep finances separate. It IS a pain, but I prefer it that way. He's very controlling about money - I get the third degree for spending any money unless its something he deems that we need and I find it very stressful. We have discussed setting up a joint account for bills but he says the mortgage 'has' to come out of an account that at least one of our wages goes into. Whether this is something he's decided or our mortgage company have I don't know. I will suggest it again though.

Sorry but that's carp .... my wages go into my main account and all my d/debits - incl the mortgage - come out of my 2nd account.

If it's going to cause more stress to have a joint account then leave things as they are and I can totally understand your reasons if you have to justify every penny - however, a joint account for solely bills, leaving each of you with your own money, that you could do with as you please, may be worth thinking about. You do really need to work as a partnership with regard to finances to be able to get the best deals, not argue about finances etc so it's maybe something to work on over the longer term.

Catriona_P wrote: »

I hope this doesn't sound like I'm just rubbishing all your suggestions, I'm really not. I really appreciate you all taking time to talk to me. It's really hard not to see a way out and when you feel like you've been making progress but the figures say otherwise it really blows the wind out of your sails!

Not at all and you're taking steps to sort things out which is brilliant:T keep plodding away and you will get there.

Catriona_P

rising_from_the_ashes wrote: »

Sorry but that's carp .... my wages go into my main account and all my d/debits - incl the mortgage - come out of my 2nd account.

If it's going to cause more stress to have a joint account then leave things as they are and I can totally understand your reasons if you have to justify every penny - however, a joint account for solely bills, leaving each of you with your own money, that you could do with as you please, may be worth thinking about. You do really need to work as a partnership with regard to finances to be able to get the best deals, not argue about finances etc so it's maybe something to work on over the longer term.



Not at all and you're taking steps to sort things out which is brilliant:T keep plodding away and you will get there.

Thanks! I have a list of things to do money wise tomorrow lunchtime, so with any luck will soon be able to report making a bit of headway. I think having an account for bills is the right way to go long term and we have had a short chat about it, but I want to make sure I don't get under too much pressure from him because of it. Hoping I might sleep a little better tonight!

PiggyBankShaker

AlwaysWorking wrote: »

I tried the same thing recently with my bank but was told that each time they lowered my overdraft I would be credit scored and that it was a bad idea. I opened another bank account and have gotten my wages transferred there. I am then putting money into my overdrawn account each month in an effort to pay it off.

If only we'd always been this sensible with money....:o

I did a similar thing to pay off my overdraft of £1400. I never saw it as a 'debt' per se as I was in it for so long.

I opened a new current account with a smaller overdraft (£300) and got my pay paid into there. Then I made a direct debit to pay money into the old current account until it was paid off.

I was more happy about paying off the overdraft which was £1400, than I was about the crefit card that was £7852. And it was all down the the bank's attitude to me and the debt and their interest and extra charges.

Really hope you find a way of sorting it that suits you best.

Good luck

PiggyBankShaker

Catriona_P wrote: »

• Landline - this IS expensive. Since I did my SOA I spoke to BT as I felt it was too high, they told me it was fine and they'd review in 3 months, which should be coming round now. I'm going to chase them again

YOU need to tell BT that it is NOT fine, they do not know your circumstances. Tell them that unless they find a way of reducing your bill you might be in danger of defaulting on payments and they wouldn't want that, would they? Their job is gto get you to pay as much as possible, you job is to pay as little as possible. Even if you meet in the middle, you will still be better off financially.

allybee101

Hi Catriona,

I'm in the same position of clearing my overdraft. I've not been very dilligent but it is slowly reducing.
My wages go into the overdrawn account, any direct debits come straight out at the start of the month. I move my monthly budget (food, petrol, etc) into another account and use this for daily spending. Pay with cash! It's so much more limiting if you're handing physical money over rather than just sticking the card in.
I reduced my limit in a chunk of £500 rather than smaller amounts monthly. As others have already said, each time you change your limit it's another credit check which isn't good for your credit rating.
Good luck and keep at it

trix-a-belle

Catriona I just wanted to drop in & say good on you for tackling things, but I'm saddened at how your OH is taking advantage be firm with him girl! (& BT!)
Re the account the mortgage is paid from: You said you don't know if it was something he had made up or was a stipulation of the mortgage, don't ask him go ask the mortgage company & find out its in your name too (i presume)!
You pay 95% of outgoings for your child, ok so last time you looked he was a grown adult not a child & therefore should not be getting child benefit to spend on himself.
& satellite if he wants to keep it he pays it, surely he can see theogic in that

I don't mean to sound harsh but to me it appears you have to pay all the bills but in charge of decisions on none of them. You are doing so well at wanting to get yourself out of this situation but getting little if no support from your partner, he should be proud of you like we are!!