Time to clear the overdraft

april87

As the title suggests, I want to clear my overdraft as I am constantly in it every month.

I got paid today, and after paying my half of the bills etc with some bills still to come out, I am back in it.

It's £800 and I want it gone before I hopefully *fingers crossed* start back at uni.

What is the best way to do it? Pay off a bit each month and reduce it or are there other ways to go about it?

I have previously made a mess with my financials, with the last thing coming off my file later this year! YAY! And I also have an Aqua CC that I spend on and pay fully.

Any suggestions would be greatly received

Sharon87

If you're at uni is it a 0% student overdraft?

If that's the case I would put money that you are saving to pay it off into a savings account and earn a bit of interest on it!

If it's not 0% interest, then there are other options. Open a new account and transfer your spending money for the month into that one and don't use the overdraft account for any spending.

april87

No I am not at uni now, I was aiming to clear it before I go back. I pay about £8 in interest a month for the overdraft. I am a part time student at the moment and from what I have found online, would not be eligible for a student bank account.

andyfromotley

Hi April,

Assuming that you go back in Sept, Thats 7 months, so you need to 'repay' your OD by £115 per month. The simple way to do it is to work out your budget and ensure that you spend £115 less than your income every month. This will see your balance come down each month. (assuming that its free to do so i would also reduce the OD limit by the same anount each month in order to reduce the temptation to use it) Bingo, you'll be clear by Sept.

There are no doubt other ways to do it but really, why reinvent the wheel?

If you are stuggling with your budget post an SOA - http://www.stoozing.com/calculator/soa.php and we shall find some savings.

If you are struggling with HOW to keep track of spending your budget then i highly recommend YNAB which for me id the best budgeting program around and well worth the very small caost. But there are plenty of free ones around too.

HTH

april87

Here is my SOA

Household Information[/b]
Number of adults in household........... 2
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1236 (just my wages, as its my o/d i want to cut down, OH only debt - mortgage)
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1236

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 350 (my half of the mortgage and any bills that aren't on my list inc £66 for gas & electric- regularly shop around for good deals, mobile phone - joint account, when my renewal came around was getting a better deal with him taking out a 2nd line then me getting my own renewal)
Management charge (leasehold property).. 0
Council tax............................. 50 (again halved)
Electricity............................. 0 (see above)
Gas..................................... 0 (see above)
Oil..................................... 0
Water rates............................. 0 (Scotland - so inc in Council Tax)
Telephone (land line)................... 18 (deal expires this month, not sure I could get it much cheaper)
Mobile phone............................ 0
TV Licence.............................. 12.12
Satellite/Cable TV...................... 21.5 (currently on a deal - half price package with sky, runs out July)
Internet Services....................... 0
Groceries etc. ......................... 150 (the biggie for us, both on a plan were we do eat a fair bit, always shop with a list, look around and order especially meat in bulk and on offer as and when Musclefood have it)
Clothing................................ 30 (I tend to buy sports gear & underwear often, as I'm training and my body shape is pretty much changing a fair bit)
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0 (travel is in the form of a bus pass that comes through work, and is deducted before tax)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 33 (We had 2 cats that the OH's mum has taken in, still paying insurance as we didn't want her to take on all the additional costs)
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15 (huge family, usually spend about 15-20 on a gift and bake a cake for them)
Haircuts................................ 60 (every 3 months and its a friend who does it)
Entertainment........................... 70 (gym membershio & coaching fee - tied in till end of April)
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 809.62


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
overdraft......................800.......0.........0
Total unsecured debts..........800.......0.........-


Monthly Budget Summary
Total monthly income.................... 1,236
Expenses (including HP & secured debts). 809.62
Available for debt repayments........... 426.38
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 426.38

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -800
Net Assets.............................. -800

I have a credit card and usually set aside what I spend on it each month.

I know I have a fair bit left at the end of each month, but I have no idea where it goes, well Morrisons, Asda and Lidl would be the best bet. As mentioned above we are both on a plan and that's were a lot of the money goes is on food. This is something I feel I can't give up (for the first time in a long time, I am healthier and have a much better relationship with food/myself)

In terms of keeping a track of my spending I tend to use the note function in my phone and log it as I spend it. For ex -

Jan

Wages - XX
Bills - XX

Morrisons - XX
Asda - XX
Coffee - XX

and so on.

andyfromotley

Hi Jan,

Good news - you have plenty of spare cash and your SOA looks pretty healthy!! Yah!!

Bad news - you have no idea where your cash is going and your system of accounting for it is pants!! Boo!!

Honestly my advice to you is to get ynab. you will then know where every penny you get is going. If you dont give each pound a job then it will disappear as you are discovering!!

Your food budget is fine, but not if you are spending the rest of your money on it too!! You have no major problems here, you just need to manage your money better, treat each of those pounds as if they were your first born children, know where they are at all times and exactly what they are doing. Dont let them out of your sight and dont give em away!!!


HTH

april87

OH and I have said that we will put aside about £100 each a month for the food and just use that, anything that comes off like Musclefood, we will just pay by card and the person who bought it will then take the cash out.

april87

Thanks Andy will def sit down tonight and look at getting the YNAB and go from there, not the best of systems I agree but it lets me keep a rough track of where the pennies are going