Constantly going overdrawn

simplyswede

Hi all

I don't know if this is the right place to post this, but I need to get on top of my finances, so I'm hoping someone can help.

My situation is this: I get paid into a First Direct account (as recommended by Martin), then transfer £750 into a Nationwide account which is for all my bills. Recently my bills have all gone up so I keep going overdrawn (I've got a £100 overdrawft on the NW account) and getting charged for DDs coming back unpaid.

I keep forgetting to check the NW account throughout the month, as I suppose I assume the money in there will cover my bills - then I'll suddenly get a text from Orange asking me to ring them as my DD hasn't been paid. I then log on to NW banking and realise I'm £140 overdrawn (which has happened today).

I don't know how to get on top of this, I've been trying for months to sort my finances out and keep getting myself into a teary panic whenever it doesn't work. Please help me

E

cornishchick

Can you set up a text alert to let you know when the account is below a set Limit?

simplyswede

That's a good point, I thought I had it done on that account as well but just set it up - thank you!

bekkki1

Can you go through your DDs and make sure they are all correct?.

Then adjust the amount you transfer over to cover them all so you wont go OD

gayleygoo

Hi, welcome to the forum! First of all, don't panic, you can do this What have you tried that hasn't worked? You need to sit down and go through your bank statements and work out how much goes out each month, and when. Preferably have a pot of tea and some cake on hand when you do this, cake makes everything better!

Don't think about it all at once - you seem overwhelmed and it will put you off doing anything. Think of the first step, perhaps that is increasing the amount that gets transferred from your pay if possible? If you can, it's a good idea to add some extra because sometimes bills come out on different days each month, maybe earlier or later than you expect. If you can do that, do it before thinking of the next step.

Another idea might be to reduce the amount you have going out, especially if the increased bills are leaving you struggling. Is there anything you can cancel, or negotiate a better deal with the company?

If you don't already keep some sort of record of your finances, start now. I use a small notebook to record all my spending, and a calendar page in it to remind me when money should be coming in and direct debits going out. You could also use a regular diary or calendar, or a computer type spreadsheet if you are technologically inclined.

Get into the habit of checking your bank balance regularly, perhaps every other day if not every day. Can you switch to online banking? You can check it anytime then, and move money when you have to.

simplyswede

Thank you both for your replies!

I definitely only have current/relevant DDs going out of that account, and none are really for things that I can cancel (the only thing would be the gym which is £28/month but I'm loath to stop going as it helps me so much with my depression).

My utilities are locked in for two years so can't really change the amount I pay (at least I submit regular meter readings so I can see that I'm not falling behind on what I'm actually using - phew!).

I'ev just increased my DD into the Nationwide account to £850, as I've calculated my total outgoings from that account to £795. But then why am I going over £100 overdrawn? It doesn't make any sense. Unless it's the charges I'm incurring...hopefully they'll stop now.

I downloaded a free spending app that I've been using, but then things like this happen and it's now telling me I have less than £3 to last me until the 28th...so it doesn't seem to be helping me much unfortunately.

joedenise

I suspect the reason you're going over by more than £100 is because of charges. As you've increased your DD to Nationwide hopefully this won't happen anymore, although it may this month if you don't transfer enough cover the £140 you've gone overdrawn plus whatever the charges are, no idea how much they are likely to be so would suggest you need to transfer £150 immediately to take care of the OD + charges.

Denise

smssms

Can't you just bin one of the accounts so that your pay goes into the same account the all your bills are paid from?

simplyswede

smssms - I set up two separate accounts because I kept getting confused about my balance, thinking I had X amount left till payday, and then a DD coming out mid-month. This way, once the bill payment has gone out, whatever is left in my FD account is what I actually have to spend.

smssms

OK, I see.

If you are into your tech, could you get more into the online banking, that way it could be a lot easier to keep an eye on the live account balance(s). They often have automatic alerts too. You may even be able to get apps for your phone/tablet.

PasturesNew

You need to increase the amount you put into that account immediately, that'll stop it.
Then look at your ins/outs and see where what is going out differs from what was on your initial calculations - and look to increase your monthly amount by that amount, or reduce your usage if it's a bill you can control (electricity, gas, phone).

It's probably a case of "out of sight, out of mind" and having done the initial maths you're just using your services freely without double-checking each bill against your original maths.

Or, you calculated the bills over a year, say, but some things have occurred earlier in the year, before the money had accumulated to pay for them.