overdrafts...

John_Meath

Hey guys,

First post on here, read a lot and its a great site!

I've realised today im paying around £30 a month in overdraft charges, I've just noticed a bank account with 0% for the first twelve months.

I have a £2,000 overdraft, my earnings is around £2,000 a month and outgoings around £650. I myself read that and can't quite understand what I'm doing still in my overdraft after so long. :mad:

How easy is it to switch bank accounts? I have quite a few DD and my pay and rent money from a property goes into that account. Also, will I know how much overdraft I will be allowed before I open it? There isn't any point me opening an account with £250 overdraft ATM.

Cheers, John.

greensalad

I believe with the switching service they handle moving all your direct debits and standing orders over for you automatically. I believe it's part of them being fair and allowing you to switch.

charmed1318

Does the rent money from the other property get used for anything.
Yo could switch to another bank account, whether its got an overdraft or not, get your wages paid into there, and as the rent money goes in you just leave it, treat it like a debt you are paying off. See where else yo can tighten up and pay more into it to decrease it...
Just a thought

Cycrow

The one problem with switching to a new bank is that there is no guarantee that you will get an overdraft in the new account, or that it will be big enough.

So when you using a switching service and you dont get the overdraft, your old account will close and you will need to cover the debt.

if the only reason you want a new bank is to get the better overdraft, it'll be safer to simply open a new account (leaving the old one the same). Transfer the overdraft amount to the old account to clear that off, then pay any extra money each month into the new account to slowly pay that bank.

if your overdraft has been maxed out for awhile, it would mean you are spending all your income each month, so you will also need to cut down on what you spent

Silian

I recently switched all my bank accounts and it was completely painless. They did the direct debits and standing orders for me.

I panicked a bit when my salary was paid into the old account, but there is also a redirect thing for a few months so it ended into my new account.

Also (if I remember correctly) , opening a bank account has a cooldown period so you can cancel it without issues if you don't get the overdraft you want. On my switch they also told me how much overdraft I would get before I had to press the final confirm button.

Definitely recommend switching if you can (also check topcashcack and quidco for cashback before you switch).

Also recommend seeing what is happening to your money. Go through a few months statements and put together a soa.

FireWyrm

Switching accounts means that the old OD is payable on demand and if you cannot get a big enough OD at the new bank, that means the second you close the account, you have to pay the debt. On the other hand, I would think very carefully about opening yet another account with an OD facility anyway since the idea was to get out of it, not just move it. ODs are probably the most expensive way to borrow money this side of a pay-day-loan, so you want to get rid as soon as practicable. If your outgoings are truly so low, you should be able to dig out of the OD in two months - just 8 weeks of graft. If however, you are vastly underestimating your outgoings, moving banks will profit you nothing. You need to change your spending habits first.

Why dont you post an SOA, or at least do a proper one privately, and then you know for sure what your outgoings are. You should also analyse the last 6 months of bank statements to see if reality reflects your assumptions.

Dobbibill

Hi John,

Firewyrm offers good advice. If your estimates of income/expenditure are quite accurate then you are wasting/missing approx £43.50 per day every month.

I agree with him to do either a public or private SOA. Here is the link. You may find that by going through your statements you find you have other payments which you didn't include in the initial estimate. It's a good eye opener too and gives you more structure going forward.

Hope this helps

DB

tea_break

Interesting comments about your old bank account being closed. I switched from Lloyd's to Santander a couple of years ago and my old Lloyd's account was left open along with the full overdraft facility. I have about £2 left in the account and haven't touched it in 2 years, but my statement shows the overdraft is still available.

Just a thought. Should I make that £2 available to budget in YNAB?

John_Meath

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1605
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 695
Total monthly income.................... 2300
Monthly Expense Details
Mortgage................................ 312.5
Secured/HP loan repayments.............. 0
Rent.................................... 400
Management charge (leasehold property).. 200
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 50
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 150
Clothing................................ 30
Petrol/diesel........................... 150
Road tax................................ 12.75
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Tax..................................... 125
Bank Charges............................ 30
Eating out.............................. 150
Total monthly expenses.................. 1685.25

Assets
Cash.................................... 500
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 5000
Total Assets............................ 145500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 99000....(312.5)....2.9
Total secured & HP debts...... 99000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CC.............................2900......150.......0
Total unsecured debts..........2900......150.......-

Monthly Budget Summary
Total monthly income.................... 2,300
Expenses (including HP & secured debts). 1,685.25
Available for debt repayments........... 614.75
Monthly UNsecured debt repayments....... 150
Amount left after debt repayments....... 464.75
Personal Balance Sheet Summary
Total assets (things you own)........... 145,500
Total HP & Secured debt................. -99,000
Total Unsecured debt.................... -2,900
Net Assets.............................. 43,600




Theres my report, I spend a lot more than I first imagined !!


Any advice?

FireWyrm

John_Meath wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1605
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 695
Total monthly income.................... 2300
Monthly Expense Details
Mortgage................................ 312.5 Mortgage AND rent?
Secured/HP loan repayments.............. 0
Rent.................................... 400
Management charge (leasehold property).. 200 A month? That's outrageous. Any chance of moving?
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 50 I spent £5 on PAYG.
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 150 Very good for a family of 2. Are you sure this is correct? It is based on reality right, not just wishful thinking?
Clothing................................ 30 You spend £360 a year on new clothes? What do you do to the old ones?
Petrol/diesel........................... 150
Road tax................................ 12.75
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Tax..................................... 125 Which tax?
Bank Charges............................ 30 Wow! £360 a year wasted.
Eating out.............................. 150 Um? £1800 a year! I dont spend a year what you spend a month
Total monthly expenses.................. 1685.25

Assets
Cash.................................... 500
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 5000
Total Assets............................ 145500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 99000....(312.5)....2.9
Total secured & HP debts...... 99000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CC.............................2900......150.......0
Total unsecured debts..........2900......150.......- This is chicken feed. You could get rid of this in 7 months flat just with what you have spare a month and that isnt even making sacrifices like your eating out.

Monthly Budget Summary
Total monthly income.................... 2,300
Expenses (including HP & secured debts). 1,685.25
Available for debt repayments........... 614.75
Monthly UNsecured debt repayments....... 150
Amount left after debt repayments....... 464.75 Are you sure?
Personal Balance Sheet Summary
Total assets (things you own)........... 145,500
Total HP & Secured debt................. -99,000
Total Unsecured debt.................... -2,900
Net Assets.............................. 43,600

John_Meath wrote: »

Theres my report, I spend a lot more than I first imagined !!

It usually is the way. How did you arrive at those figures exactly?

John_Meath

Mortgage and rent :
I have a apartment which I rent out (that's my mortgage)
Pay my girlfriend £400 a month that's all bills included

That's why groceries are £150 as she pays other half, and the eating out needs to stop, between us it's easily £300 a month which I know is ridiculous.

As for the management charges, my apartment is £150 a month and estate agent is £50.

Clothing is possibly more than £360 a year, I can't really work that out.

Getting these figures from my lloyds money manager.

Credit card is 0% and I've always had one, for car insurance, holidays etc. mainly bothered about getting out of my over draft, as you say it's £360 a year just on charges.

If I go for a 0% overdraft will I be told what limit before I commit?