Maxed out my overdraft, how do I stop things getting worse

-Peppermint

Firstly, I'm new to this forum- and I have to say it's made me feel so much worse despite all of the helpful threads I've read. There are tons of people on this forum who have got deep into the red, deeper than me, just by paying for the bare essentials- I on the other hand have managed to get myself right into my £1000 overdraft just on frivolous purchases in six months.

I'm a student, and since I've been home for the past two months- I've managed to extend my overdraft by £300 for no good reason. Every time the letter confirmations come through I race to the doormat and hide them before they could even consider what they are. They think I just have a £150 overdraft for dire emergencies.

I've lived in halls for the past year and therefore budgeting and paying rent and bills hasn't really occurred to me yet as my loan (+ a little bit extra to top it up) would go in, then out again and I would be covered for all of my food, rent and bills for that term.

When I return back to university on September 1st- I need to pay all of these things. And knowing how I'm even going to start with this debt hanging over me is annoying.

The funny thing is, is that I have a job that pays me £360 p/m with out over time, and during my time at uni my parents would (and will in the future consider they never find out about my mess) give me £50 p/w for travel, lunch and essentials. This was more than enough for a student, but my spending got out of control.

Now is my turning point, I want to be out of the minuses and I want some help and support to do this. I am currently £997 OVERDRAWN :rotfl: (all you can do is laugh sometimes)

I have a reimbursement from a work conference I went on of £179 due into my account in the next two days.

Pay day is the 27th of every month. Will be getting my £360 basic pay (and overtime payment of at least £240, I haven't worked this out properly- I'm terrible at managing my hours)

Currently living in my parents house, rent free, board free, everything free- so this is the time to clear it. I'm going to be turfed out on the 1st September and fending for myself, so I'd to be at least £100+ by then!

How do I do this? Does anyone have any plans?

I was considering opening another bank account, and transferring my overtime hours into there (vary from £200-£250), and only carrying that accounts debit card so I know if I want to buy lunch or need bus fare (or even want a tenner to go to the cinema)- it will be coming out of actual money and not my overdraft.

Then I would send this £179 reimbursement, and all of my basic pay into the student account with the overdraft, reducing the overdraft limit with each transferal into the account.

Would this work? I just want a bit of support and help really

HappyMJ

Being a student it's inevitable you will end up in some debt. Don't worry too much about it. I don't think your overspend (£40 a week) isn't that bad and by investing in your future by being a student and having a little bit of frivolous spending means you should be enjoying yourself and worrying less about such a relatively small amount of debt.

Just wait try not to spend too much in the mean time and when you get a full time job then you can clear the debt in no time. With your education qualification you should be earning much more than minimum wage.

pistolpete123

Uni is always one of those difficult times. Try to take the positives and take action while you can:

1. Set up a spreadsheet (all my incoming and outgoings go in here)

2. Use it to work out your exact position now. If you're not sure how much you've got coming in, work it out using payslips etc. It might be painful at first but you'll know exactly where you are.

3. Then use it to work out how much you need to put in each week to get back to zero.

4. Stick to it! Once you're in the black, set yourself a budget of your essentials each week (i.e sensible food budget, travel, phone), then give yourself some 'walking around money' to treat yourself. If you're still struggling, consider asking the uni for help or getting a part time term job.

Best of luck and hope this helps...

DragonAK

You might be surprised at how understanding your parents are.

Mine found out by mistake a few years ago, and my situation was a lot worse than yours.

They were more angry at the banks who kept giving me credit than they were with me. Don't forget your parents have been there and done it all before. I'm yet to meet any Adult who does not have some sort of debt.

Maybe work out what you think needs to be done. Then go to them with your "plan". I am confident they will see it as a grown up thing to do. Do not be ashamed to ask for help or advice from your parents.

debtfreeby2013

DragonAK wrote: »

You might be surprised at how understanding your parents are.

Mine found out by mistake a few years ago, and my situation was a lot worse than yours.

They were more angry at the banks who kept giving me credit than they were with me. Don't forget your parents have been there and done it all before. I'm yet to meet any Adult who does not have some sort of debt.

Maybe work out what you think needs to be done. Then go to them with your "plan". I am confident they will see it as a grown up thing to do. Do not be ashamed to ask for help or advice from your parents.

This^^^^^^

I was in a much worse position than you before I moved back home. I didn't complete my degree but in the one and only year I did I maxed out 2 credit cards (totalling £8000), my student overdraft (£1400) and took out a loan (£3000). I was living right in the depths of my overdraft and at the max of my credit cards for 3 years after leaving uni and staying in the same city (so paying rent, bills etc). As well as missing out on some of my debts payments I was living on £50 a month to pay for petrol and food (and I worked 20 miles away so petrol was an essential). I didn't tell my parents until my mum made a jokey comment about me owing her £5. I flew off the handle and she eventually got it out of me that I was stressing so much and the situation I was in. I lived an hour away from my parents and within 2 hours my dad was there with a car full of shopping and a handful of cash. I left my place at the end of my 6 months contract (thankfully only 6 weeks later) and went back with my parents. They seriously couldn't have been more supportive.

Since this time I often sit down with my mum and go through paperwork etc to make sure I'm still steady. I bought a car on finance which upped my debt by another £9000 but in the space of 6 years I have brought my debt down to £5500 (from approximately £20,000) and have moved out into my own place with £360 disposabole income after bills etc. I'm a student again so that £360 is on a part time wage. I honestly couldn't have done it without my parents.

Sorry for the long one but I just wanted you to see that you're not alone and that, usually, parents are an amazing support for things like this. good luck, whatever you decide.

DragonAK

debtfreeby2013 wrote: »

Great post, glad to hear you have got yourself sorted. Well done!

I can't stress how much of a relief it was when my parents found out. Felt like the weight of the world being lifted from my shoulders.

MrsJG

Well done to you both for working on from this, I can't really speak for myself, but my husbands daughter got caught in the same trap whilst at uni.
I won't say it's all her fault, as her mother was struggling for money she offered to give her half of her loan, which should have gone for rent.
We only found out when the LA contacted my husband (he is the guarantor). He then sat her down and worked out a payment plan. We will pay off the remainder and when she gets a job she can start to pay us back.

I totally agree with whats been written so far, tell your parents, it will be a weight off your shoulders and start forward planning on a spreadsheet.
Good Luck

killerpeaty

Hi peppermint, well done for coming forward.

First things first, from what I understand you're going into your third year? Your university (as long as it's not private) will have an access to learning fund, it's there to ensure that students will have some back up. Typically to get it you have to be disabled or third year or raising a child or in debt, you have to get student loan for it and 6ish months of your bank statements. Your staff liaison should be able to point you in its direction.

Don't feel bad about getting into debt (other than the obvious), while I didn't, most of my friends did. You actually did a lot better than one boy I knew, he got to christmas and run out of money for the whole year, he was stuck eating 9p noodles.

I do think going to your parents is a good thing, I was always open with my parents about my spending and they were brilliant if I was really struggling.

Good luck! x

-Peppermint

Woah, thank you very much for all of the lovely replies. It means a lot to let this off my chest to people.

To all the people suggesting I tell my parents- I really can't. They have no financial worries themselves, or have ever, so they really judge people who get into debt they seriously didn't want me to have my overdraft and even came with me when I opened my student account last year to ensure I could only have an emergency £150 OD put on it. If they knew I've done this and kept extending it and extending it, they would kill me!

If my situation was much worse (ie, Wonga payday loans gaining interest, credit cards, a maxed out 3k overdraft) then yes, I would probably bite the bullet and tell them, but because I feel like this situation is manageable- I reckon I can do it on my own without upsetting anyone and causing arguments even though it will be hard.

Because they have no financial worries, our 'household income' that I am assessed by student finance on is high- meaning that when it comes to being assessed for hardship loans and bursaries, I'm entitled to nothing so that isn't an option.

Am going into my second year and I will continue to have that £360 p/m part time job whilst at university, just in case you wanted some background.

drowninginunpayabledebt

Been there, done it and blown through waaay more money on waaay dumber stuff!!! I completely understand about not telling the parents - I didn't tell mine. They both work in the financial industry and cannot understand people who don't manage their money. They found out by accident and you know what. They were more annoyed that I had lied to them and kept them in the dark. In the end they paid all my debts off for me to save me on the interest.

Expect my student overdraft. They were of the opinion that I had to learn and the overdraft was occurring no charges as I was still within my limit (£2000 by the way!!!). I earned about £100 a week and me and mum used to sit on payday and work out how much money I needed to get through the week and the rest of it went into a pot. When I marched into the bank and cleared the overdraft in one go it was a fantastic feeling knowing all my being good and not going to every night out had paid off.

By the sound of it you're pretty well motivated to get it cleared. Don't open another account - it's a slippery slope into opening another overdraft. Work out how much you need each week and draw that (and *only* that) from your account. Don't go too mental with the living tight stuff either - you still need to enjoy yourself or you will wind up feeling really down. I'm not talking massive purchases but I used to keep £10 a week for going out or going to the cinema (for example). Once you've cleared the overdraft put the limit down to £150 again and stick to it! That's the real hard part but any time you feel like extending it for something stupid just remember how awful this feels. And come back to this site to remind yourself of people doing this and getting into a bigger mess. Like me for example

Chin up - everything will be fine. Good luck