So What would you do?

newshoes_2

Help! Not a huge problem compared to some, but keeping me awake at night. I am being an ostrich and need to take head out of sand!

I have £1500 overdraft facility on my Barclays current account that I use - and sometimes exceed by about £100-£200. I never pay it off - the bank haven't recalled it yet but I feel they will (I had this problem many years ago and Natwest made me take out a loan to pay it off, at nearly 30% interest - the baddies). I bring in only about £900 a month.

I need to start getting the overdraft down, I obviously need to cut back about £300 a month on spending, I currently spend in the region of £1200 it seems - I have no idea what on as I have nothing to show for it. I am very good at starting budget plans and writing down all spending (sometimes in a new notebook, with a new pen, bought specially for the occasion, I'm sad to say) - but they only ever last a few days.

I am hopeless with money - should I get a 0% credit card - can I even transfer the balance? I thought if I put it on a credit card I could pay off a set amount every month about £100 - £150 and pay it off that way - perhaps 'tarting' the credit cards to keep it at 0% for longer.
That way the bank gets its money back, I feel better about receiving and actually opening my bank statements, I get some sleep.

Does this sound like a good idea? I hate to leave it as is - it makes me anxious. Can anyone tell me if I can get a credit card that will let me make a credit to my bank account?

All help very very gratefully received.

pinkkat8910

Hi Newshoes,

Its always a worry resorting to more credit to pay off existing credit as if you have no self control you could end up with a credit card balance and an overdraft as well (speaking from experience!).

I think the best thing you could do is exactly what you've done previously but you need to discipline yourself to write everything down ... cut back on your spending and that balance will drop down - or alternatively give yourself a weekly allowance and once thats gone ... tough (which is what i'm now doing as like yourself i was hopeless at writing down all my spends) hehe.

immoral_angeluk

a 0% wouldn't be a bad idea IF

• You can get one with a decent term (12 months 0% etc)
• You can get one with a lower interest rate than your current one once the 0% ends
• You have the self control to not run up the overdraft again or even better get the bank to cancel it once it's paid
• You have the self control not to spend on the 0% card.

Seaxwyn

I agree with pinkkat - taking out more credit is setting out on a slippery slope.

I don't see why your bank would recall your overdraft if you have a regular income. Presumably they are making lots of money from you! I have had overdrafts for many years and they've never been recalled.

I agree your best course is to pay off your overdraft by cutting down on unnecessary spending. If you have anything to sell (eg on Ebay, Amazon or at a carboot sale), that could help.

And if you want to avoid paying interest on your overdraft while you pay it off, look at switching your account to Alliance & Leicester, who offer a current account with interest-free overdraft for one year.

Good luck

MrsTinks

Set yourself a budget. Then get 5 glass jars and mark them Week 1, Week 2 etc and the 5th you mark "Treats". Now split your money into the 5 jars, so if your budget is say £120 for the month each jar gets £25 and "treats" gets £20. Any you don't spend that week goes into the Treat jar or next weeks jar. I find this helps me where as spending diaries has NO effect on me

pinkkat8910

tine wrote: »

Set yourself a budget. Then get 5 glass jars and mark them Week 1, Week 2 etc and the 5th you mark "Treats". Now split your money into the 5 jars, so if your budget is say £120 for the month each jar gets £25 and "treats" gets £20. Any you don't spend that week goes into the Treat jar or next weeks jar. I find this helps me where as spending diaries has NO effect on me

Thats a really good idea, thanks - i'll have to get onto that - as I just withdraw my allowance every sunday but thats a cracking idea! :money:

newshoes_2

Yes, good idea with the jars - however, it will be tricky not to dip into following weeks' jars. I know I won't write things down. And the slippery slope thing is so me. That's the danger with a credit card, I will have to have a will of steel not to use it. My will power is more like candy floss.

pinkkat8910

newshoes wrote: »

Yes, good idea with the jars - however, it will be tricky not to dip into following weeks' jars. I know I won't write things down. And the slippery slope thing is so me. That's the danger with a credit card, I will have to have a will of steel not to use it. My will power is more like candy floss.

oooh dear .... if you're adamant you want to transfer this debt onto a credit card you would have to be certain to cancel the overdraft afterwards and cut up the credit card once the balance is transferred.... otherwise it will be a huge slippery slope into more debt if you're saying you have no control / willpower.

maybe you could try the jar thing for a month and see if you do save anything? you're going to have to look at it with fresh eyes and lose your previous spending habits if you want to get it paid off newshoes :undecided

bedhair

When my husband wanted to reduce his overdraft, he arranged a meeting with a personal banker at his bank and agreed to reduce the OD by £50 each month. This way he managed to pay it off without incurring charges and he said that he didn't really notice the £50 loss each month. You could easily make that up from Ebay, bootsales etc.

poodlehorse

I think it would still be useful for you to do an SOA for us to pore over and see if we can't work out where any unnecessary spending is going. I am inclined to be worried about the credit card option if you don't think you have the willpower.

newshoes_2

Monthly Money incoming:
£72.40 child benefit
£700 standing order from joint account* - 'housekeeping'
£125 average earning from freelance journalism
*to which I have no access- or I'd spend the lot

Monthly Outgoing (approx figures):
Lovefilm £10
Milkman £20
School dinners £20
Petrol £90
Supermarket/food £400
Other household purchases/clothes £200
Son's activities/sports £60
Magazine subscriptions (including gifts) £5
Gifts/birthdays etc £30
Interest on overdraft £5
Cash £100

You see, on paper there's not much discrepancy but on my last bank statement the money in was £945 and the money out was £1295.60. So there is a discrepancy in reality, this month it was in the supermarket - £570 instead of the usual £400, and I bought a domain name and business stationery (about £100 combined) to set up a cookery/cakes business, which should bring in a bit more in the long run.

This of course varies from month to month and I have just had an expensive time as my son needed new Everything to go back to school as he's grown about a foot over the holidays! I have no major outgoings coming up - and should be earning quite a chunk more from the journalism as I have a few articles pending - have been tapping the editor for a job in her ad agency too - actually working for a living would help. But the fact is when I do earn, I STILL spend more than I earn. I just up the standard of living a bit. I need to pay if off the overdraft and then reduce the overdraft - that idea of ramping it down every month is a good one.

Sigh.