Sick of living in my large overdraft

adypearson

I have had a very large overdraft for years (£4300) which built up and up and reached it's current limit when I went travelling back in 2001. My bank (Lloyds) seemed happy to increase it every few months when I needed a bit more money for whatever reason. I am in Sales so my wages fluctuate every month but on average they're around £2500 a month after tax so I never get into a positive and have just lived in the red for over 10 years and I've truly had enough of living like this.
A few months back I applied for a 0% transfer credit card as I read on this site that would be a way of clearing the debt, but my application was turned down. This was the first thing that I've been turned down for for many years, I even got a mortgage back in 2010.

So if there's anyone out there who can help me get back into the black I would be forever in your debt!!! (debt pun)

matttye

Do you have any money left at the end of each month? Why not just keep whatever's left in your current account and after a few months you'll be in the black. Any savings you could use to pay it off?

adypearson

I rarely have much left at the end of the month, I have a family of 4 to support so after bills etc. it's all gone. Some months my wages are low so we have to tighten our belts just living for the month, and when they are higher we tend to feel that we can live a little so tend to treat ourselves to a meal out here and there or some clothes for us or the children. I was hoping there was another 0% interest transfer that I could try, but I presume if I've been turned down for one then I'll probably be turned down for any others.

matttye

adypearson wrote: »

I rarely have much left at the end of the month, I have a family of 4 to support so after bills etc. it's all gone. Some months my wages are low so we have to tighten our belts just living for the month, and when they are higher we tend to feel that we can live a little so tend to treat ourselves to a meal out here and there or some clothes for us or the children. I was hoping there was another 0% interest transfer that I could try, but I presume if I've been turned down for one then I'll probably be turned down for any others.

Every lender has different criteria so you could be accepted by another lender. A lot of applications in a short space of time can be damaging but 2-3 shouldn't hurt.

However you should check your credit files to make sure everything on there is correct before you apply for anything else.

If you're interested, a lot of people on here have suggested clever ways to cut back on outgoings. If you are, post a statement of affairs (SOA) from here: http://www.stoozing.com/msoc/soacalc.php. Then post in the Debt Free Wannabe section.

grumbler

--> Debt-Free Wannabe board

Smoggie69

I have the same problem from when my wife didn't go back to work straight after being on maternity leave. She wanted a part-time job to spend time with our son and cut down the childcare costs.

I put some money into an instant access cash ISA (at least £100) which in time will build up to pay off the overdraft. You could put money aside each month where you're income is high and miss a month where your income is low.

grumbler

Smoggie69 wrote: »

I put some money into an instant access cash ISA (at least £100) which in time will build up to pay off the overdraft. You could put money aside each month where you're income is high and miss a month where your income is low.

What you suggest makes no sense. Just use this money straight away to reduce the overdraft. This just requires a little more willpower and self-discipline.

• Should I Repay Debts or Save?

Gromitt

Or open another current account with no overdraft, use this for your fresh start. Ensure you never spend more than you earn, which includes the fees and charges you'll get for the other account. Make sure you at least pay these - treat them like a bill. Then try and pay off a portion of the balance as well, 5% of the balance to start then 10% after 6 months. Close the account once the overdraft is paid off.

This way will save you far more money than any savings account.

ALIBOBSY

I would definately have a look at total budget, we live on self employed wages so things fluctuate, but in most months we (2 adults, 4 kids, 2 cats and the chickens) manage on around £1200-£1400 including all bills.

Now obviously I don't know which end of the country you live at and so how much your rent/mortgage will be, but your income is pretty good compared to most. Sometimes its easy to live upto the amount coming in, we all have done it. But you need to adjust your mindset to spending as little as possible, whilst still living. Is your partner working? Surely you get some benefits? I bet you can really make some savings when you look at it.

I would post a budget on the debt boards as other people can sometimes spot stuff we miss ourselves or don't want to face/admit. Once you address the budget and you see how much you can save/spare to clear the debt you can then look at upping your income.

One big area most people can save on is food and household budgets. Now prices have gone up, but if you cook from scratch and bake (and plenty have started from no knowledge and learnt from brilliant posts on the old style boards), you can live on really low amounts.
We can comfortably live on £80 a week with treats etc, and at a push can manage £40-£50 a week. In summer can go even lower as we grow alot ourselves at home.

A number of years ago we had an overdraft not a million miles away from where yours is, plus other debts. Its a long slow process, but you get to like it and even resent spending money sometimes lol, but the best day was the day our overdraft was cleared. We NEVER go into the red now.

With kids especially it sometimes feels like they are all little money pits, but there are ways to have wonderful, fun days out together and especially young children simply want your time and attention FAR more than cash spent on them.

Its hard to say without looking at the figure, but you need to look at all your debts, not just one in isolation and do a joint budget to clear the debts.

Good Luck

Ali x

matttye

Gromitt wrote: »

Or open another current account with no overdraft, use this for your fresh start. Ensure you never spend more than you earn, which includes the fees and charges you'll get for the other account. Make sure you at least pay these - treat them like a bill. Then try and pay off a portion of the balance as well, 5% of the balance to start then 10% after 6 months. Close the account once the overdraft is paid off.

This way will save you far more money than any savings account.

Are you suggesting he pays his wages into the new account while he still has an overdraft on the old one? If so, hell end up paying more interest on the old account.

Smoggie69

grumbler wrote: »

What you suggest makes no sense. Just use this money straight away to reduce the overdraft. This just requires a little more willpower and self-discipline.

• Should I Repay Debts or Save?

I have a Santander current account which charges a fixed amount - £20 a month max, rather than a percentage. The money in the ISA will accrue interest whereas leaving it in the bank account will not. Therefore for me it makes sense. It all depends on how your bank charges interest on the overdraft.