ditching the overdraft

chocolatepiggybank

Hi, newbie here! Trying to finally get rid of the overdraft I've been dragging around for the last decade so I thought I'd start a debt free diary to keep track. It started with what is probably a familiar story. Young student me + free £2000 overdraft = spend spend spend. 10 years later, I'm still £2000 overdrawn, with a second overdraft of £300, owe £600 on two credit cards, regularly borrow from my partner when the big bills come in, and pay £40-£50/month in interest and fees. It's not an enormous amount of debt compared to some, I know that, but I've had enough of it, especially knowing that £40/£50 is going absolutely nowhere month after month, when friends are all getting married and buying houses and I'm stuck on minimum wage with no chance of saving for either.

So, here goes. Step 1 for me is to Stop Paying Interest. I have a 0% balance transfer offer on a new credit card, so £1000 is going on there (with a little bit of shuffling since I can't transfer the money directly to my overdraft). I'm also opening a new bank account with a £500 interest free overdraft, and plan to transfer the full amount. In February I'm due the return of a house (rental) deposit and a bonus from work, which between them should be enough to pay off another £500. That should leave me with:
£0 left on the big overdraft
£500 interest free overdraft (12 months)
£1000 interest free credit card (18 months)
£300 overdraft - interest free plus £6.50/month fee
£500 credit card - plus interest
£100 credit card - plus interest

That's roughly half my debt going interest free, and £500 going altogether, to save approx £35/month on that big ugly overdraft. I want to pay only the minimum on the new card for now, and pay off any debt that's still accumulating interest first.

The worry is that having all the extra 'available' credit, I'll fall into old habits, spend without thinking and make my situation worse! So I think I'll ask the bank to cancel my overdraft or reduce it to £200 or something as soon as it's paid off.

After a quick budget, I reckon I can pay off about £80/month in 2016 (except in January because we're moving house - boo) and put that up to £100 a month once I stop paying interest. At that rate I'll need to transfer balances again when the interest free offers run out, but one step at a time eh?

Gotta go, the boiler's broken. Wish me luck!

chocolatepiggybank

Alright I'm gonna do this before the interest free period runs out. 535 days to go! I need to sit down and work out a proper budget at some point, but for now:

£2400 ÷ 18 paydays = £133/4weeks

(skipping januarys pay because house move blah blah expense)

That's an extra £33 to find on top of what I thought I could pay. Hmm.

Anyways, todays goals:
-Pay Christmas money into the bank. (And no spending it until I can do so without going overdrawn)
-Buy weekly bus ticket, 2 days lunch for work and shampoo - budget £15.00
-Remember to take mug to work for free drinks

I do want to start taking lunches to work but there's nothing much in the house right now so pot noodles it is :eek:

(Boiler update. Yep, definitely not working. Hoping someone coming out today. Have resorted to wearing santa hat around the house. Brrr)

chocolatepiggybank

Mission successful! Even borrowed a pound instead of buying something from the corner shop to get change for the bus. Just need to keep thinking this way and not slip back into zombie spending...

And I fixed the boiler myself too. Show off.

Strictly_Serious

Hi, good luck with your mission! I have wasted so much money breaking into bank notes for bus money! I have started collecting spare £1 and £2 coins just so I don't buy crisps, coke, magazines and other rubbish whenever I need bus fare and so far have not slipped back (but I know it'd be so easy). Hope it goes well, Strictly

chocolatepiggybank

Thanks! That sounds like a good way to do it, pity I never use cash for anything normally! Maybe I'll have to start

chocolatepiggybank

Well, bit of a mixed day yesterday. First of all I slipped up Tuesday night and went for the reduced mince pies and Christmas wrapping paper. Better than buying full price paper before Christmas I guess.

Yesterday's goals were:
Spend nothing, which I did.
Make lunch for today so I could spend nothing again today, which I didn't do.

Today's goal:
Spend no more than £1 on lunch.

Tomorrow will be difficult. Pub with the other half and his family. Suspect rounds are the norm. Goal is simply to spend as little as possible, but don't know what's realistic in that situation. Also don't get too drunk or embarass myself!

533 days to go.

chocolatepiggybank

Budget done, a little more in debt than I first calculated, it will take £144 every 4 weeks to pay it all off before the 0% offers run out. Assuming I haven't missed any expenses in my budget, I can pay £100 to start with, and increase that as I start to pay less interest, up to £150. I should also be able to pay some in January, even though we have extra moving expenses, because of the overtime I did at Christmas. So for the first time I think it might actually be possible within 18 months!

Just 529 days to go...

Goal for the week is packed lunches. Exciting stuff. I've set up a budget app on my phone to record expenses. I've used it before but just drifted out of actually using it. Want to stick with it this time.

Payday on friday. Whooo!

chocolatepiggybank

Can't sleep tonight so thought I'd update with a little background info. Alright, maybe it's quite long, not so little.

I'm 30 years old and currently work 30 hours a week in a supermarket. I suffer from vertigo on a fairly regular basis, since just over 3 years ago, which I'm particularly prone to when I've been stressed out or run down (hello Christmas in retail) Supermarkets, unfortunately, are one of the worst places to be with vertigo because they exaggerate the symptoms, so work is extremely difficult during flare up episodes, which so far have lasted between a day and three months. They also tend to be pretty harsh with sickness policies, so to avoid the stress (which also makes me worse) I often take holidays instead of sick leave. I use more holiday entitlement to cut down my hours during dizzy periods than for actual holiday time, and overtime is something I actively avoid most of the time, because I'm always wary of overdoing it. Boosting my income will most likely have to be done some other way, if at all.

I also suffer from mild anxiety and depression. I am on no medication for any of it, though I have tried various anti-dizziness drugs with no effect (except for that one that made me feel drunk, although that wasn't the effect I was looking for) I don't know what effect antidepressants or anti-anxiety meds would have on vertigo, and it doesn't feel 'bad enough' to find out. I have also tried CBT, with some results, and am still trying every day to implement what I've learned. A huge part of beating the anxiety and depression for me is to sort my career out, which would help my finances out eventually as well. Being regularly unwell, being constantly worried about becoming unwell, moving house regularly and having a tendency to procrastinate when not faced with an external deadline - none of that helps with the career plans and the time and effort needed to get out of the rut.

I have moved house 13 times in the last 12 years, and will move again in three weeks time. Some due to relocation, one due to moving in with my partner, and many due to circumstances out of my control, as is this one. I guess I'm unlucky with houses. I don't expect to make any changes in my career in the next two months (unless that single job application I made before finding out we have to move comes through for me), but I fully expect to be tired, stressed and dizzy. I've been dizzy since Christmas day already.

So although my debt isn't that great, and I know it could be much MUCH worse, I guess I'm trying to make a change before it can get worse, and I'm trying to assert some control over my finances, partly to prove to myself that I can stop drifting through life. Paying off that £3100 is just one step in a much bigger journey.

GoingToDoIt

Hi again choccy. Sounds like you have a good plan there, it's tough when you have to be mindful of your health as well. Is there any way to boost your income? Not sure computer use is good for you but I've been amazed I how much I've made from survey sites in the last few months, took a bit of effort but made over £70 as well as doing a bit of ebaying, or maybe do a car boot sale? There are some good threads on here about earning a bit extra plus I find I (was, slipped a bit recently) valued my money a bit more knowing how hard it was to earn a fiver from online surveys!

chocolatepiggybank

Hi again! Funnily enough, I do have a pile of stuff destined for ebay but haven't quite got around to it yet So that will be happening at some point. I've tried survey sites before and didn't really make much at all, I seemed to be disqualified from so many of the surveys, but maybe it's time to have another go. I also have plans to try to make something extra from making and selling arty/crafty things, but need to get over the fear of putting myself out there and actually do the work as well will be setting up space to do it after moving and then we'll see!

GoingToDoIt

Personally I tried survey sites years ago and it wasn't the quick money earner I'd hoped for. I recently got into sw@gbucks and found that quite good as they have a lot of other things you can earn points for such as downloading a new app - that's the one I've been amazed at. You can also sign up for free trials and then cancel them (I keep a list on a pad!!!!)
Crafty stuff sounds more fun though!