Constantly going overdrawn

pigpen

I got into this trap too..


I cancelled ALL the DD's.


I went through each of my bills and set up to pay them manually through the bank so I had control on when they were being paid.

I write a list of who I have to pay.. then how much the payments were .. then the interest rate (check out snowballing links)


I pay the mortgage and bank loan weekly so split the monthly payment into 4 and set up Standing orders for those 2.

I am billed monthly for electric, gas, mobile, internet etc so they were paid when I had the cash through their own website by card or through bacs.

other stuff such as warranties, insurance came out of what was left..


I hate direct debits they are designed to make life as difficult as possible especially as they all want money on the 1st which is difficult if you are paid 4 weekly or weekly.


As for savings.. I'd transfer extra to cover the bills and whatever is left in there after the bills are all paid transfer that to the savings account.

simplyswede

Thanks all, I am on a water meter and it's just me (and the cat!). It was about £19 a month to start with but it's just gone up by £10 a month! :sad:

Probably doesn't help that I usually wash up under a running tap...not very environmentally friendly, I know!

Butterfly_Brain

As others have said don't panic, just take a deep breath and sit down and work out how much is going from your account first and make a note of the dates that the DD's come out.

Increase how much you put in to the account maybe £900 just to cover the charges in the first month and even if you do not use all of that money you can start building up a bit of a buffer so that you never go overdrawn again. Bank charges are crippling.

Set yourself a food budget and make a meal plan. Then write a list and only take cash with you when out shopping, this will stop you impulse buying.

Have you thought of going to pay and go for your mobile phone?

joedenise

Have you actually got 2 mobile phones as in your list you have at the beginning of the list "mobile phone" and at the end of the list "Orange mobile phone"? If so, can you get rid of one of them to save a bit on your DDs. Seems pointless to me to be paying for 2 mobiles.

Denise

simplyswede

Hmm, my contract with Orange runs out in April. But my phone is absolutely rubbish so I would need a new one to go on PAYG. But it's definitely something to think about, thanks.

simplyswede

Butterfly Brain - one of those is actually meant to say broadband, thanks!

BitterAndTwisted

Actually, £650 a month for travel, food and any other discretionary spending seems like a huge amount to me for only one person. Putting enough away in the bills account should be quite simple, you've just got to get that discretionary spend right down to compensate.

Get yourself a note-book and pencil and jot down every single penny you spend for a whole month as an absolute minimum. Warning: this can be quite shocking, especially when you discover that you're spending something like £50 a month on not-really-absolutely-necessary take-away coffees and snacks for instance.

mummyroysof3

I'm having a similar problem keeping track. How much of the £650 goes on travel?

Badrick

Ask NW about increasing your authorized overdraft limit, it gives you a buffer in an emergency and will stop the charges for unpaid items eating up your account balance, but put some of the other suggestions on here in place to avoid becoming overdrawn.

lushlifesaver

simplyswede wrote: »

Sorry for the confusion, the formatting went all over the place - changed it now!

Mrs Bones, I've taken your advice and upped my standing order to £900 a month. That leaves me with about £650 a month for travel, food and any other spending, which should be ok really.

I've also got a standing order of £50 going into my savings account but I've only got it up to £100 once before, and then I had to transfer it into my main account as I had gone overdrawn. I'm up to £100 again now - maybe I should just transfer that into my NW account as a buffer for this month?

It really stands out that you are paying almost as much on bills as you are on food, travel and other spends. Is this just for yourself? How much of it goes on travel per month? What are you spending on groceries per month? And where is the rest going? And where are you based (as London is more expensive for many things than many other places).

I think I would look at upping the standing order to £900 for the foreseeable, plenty to cover all standard bills debited from that account plus begin to build up a nice buffer. I would then set up a payment in to the savings account to start building it up - how much depends on where the £650 is currently going - and set firm budgets for all other expenses. For me saving is a priority not a 'wouldn't it be nice if I could expense'

I've recently started to straighten up my finances (having graduated from my MSc and having finally been able to get a real full time job with regular pay - that took a while!) and am just starting my savings pot. From this months pay I will be implementing the strategy above for myself. I'll be going on Maternity leave in March so living on a strict budget again for 6 months should get me back in the right mind set!