Best way to clear overdraft, please advice

MrsTinks

Perspective here: it's costing you right now about £1.88 per mile you drive if my assumptions are in the ball park.

EssexHebridean

My car and My OH's are a similar sort of age, both around the 10 year old mark - we pay £77.50 per month into an account per car to cover tax, insurance, MoT test, servicing, depreciation costs etc. If anything comes up that costs over that budget (ie my car needs a belt-change next year, and MrEH's last car had to have a new clutch) then we dip into emergency fund savings to cover, and then pay back afterwards. Doing it this way means your emergency fund can be kept as exactly that, though, and also means you can keep a handle on your car costs.

At the moment, your budget isn't accounting for anything that's going into savings though - nor the other bits that Mrs T mentions. I'm guessing that those bits and bobs easily account for that "spare" £82 per month - and probably some more, which is why you're struggling to clear the OD.

Spending diary - make a page for cash withdrawals, a page for cash spends, and a page for online spends. Tighten belt and review after a month where you are at?

sourcrates

Hello,

Add together both credit card payments, and what you pay in charges for your OD, that gives you £95.

Pinch a fiver from somewhere else, makes it a nice round £100.

Get some advice from stepchange, set up at DMP for the 3 debts, hopefully all will stop interest for you, pay it off that way.

Cant do a DRO as your a homeowner, Bankruptcy too extreme, IVA, debt not really high enough, DMP your only sensible option.

enthusiasticsaver

unfortunately as you have found consolidating or moving debt as you have done rarely works unless done alongside strict budgeting - i.e. Living within your income. Yours is a fairly low income for a full time teacher. Are you an NQT? No maintenance from your child's father? The best way of reducing an overdraft is either to open up a new bank account with no overdraft and treat the overdraft as a debt alongside credit cards or reduce it month by month.

ReadingTim

giddyG2001 wrote: »

Life insurance 8.5
Income protection policy 30.3

Unless your job situation is precarious (and I don't think teachers' jobs are), then I'd ditch the income protection, especially given now notorious these things are for not paying out. I'd be tempted to drop the life insurance too, at least until you're back in the black.

However, for someone who says they know their budget, there are some gaps: clothes, entertainment etc is "phone" a landline, mobile, or both? See the SoA template for all the categories you need to consider. You also seem to be surprised that small, incidental spending mounts up - suggest keeping a spending diary to see where it's going (if you don't know), or not carrying and cards and just enough cash for what you need if you do know, but lack sufficient self control to prevent impulse purchases.

"Look after the pennies and the pounds will look after themselves" my Dad says. This applies to debt as well as savings.

cms-help

Do you not claim Child Benefit?

Is there not any maintenance for your child?

Do you take childcare vouchers through your employer (saves a fair chunk of tax)?

Have you done a benefits check as you may well be entitled to something as a single parent on that salary with childcare costs (assuming your salary is around the £24k mark based on your monthly income)?

giddyG2001

I have income protection because I'm a supply teacher so if I'm injured or sick for any reason, they pay out. I also can't get rid of my car as I go to different schools every day and public transport is not a possibility to get e where I need to go on time, let alone drop my son and breakfast club before hand.

There is no maintenance for my son, his father doesn't pay. I have been through CMS to no avail.

I do claim child benefit, that is the £82 excess I put on my sheet originally.

I'm unsure about how much to put down for clothes. I only buy 3/4 times a year, otherwise I make do or mend. I buy second hand, so how should I estimate that? My son's is easier because I know he'll need new school uniform/shoes twice a year, but mine less so. I'm guessing I maybe spend, approx £10 a month if it was broken down over the year.

The phone costs are mobile and landline together.

I will take a look at the SOA, hopefully it will help me get a more complete figure. I think what's happening is I'm taking £10/20 here and there and it's adding up. I also have another savings account (which I put my £39/week tax credits in) for household things like repairs etc, I only got curtain a few weeks back. But because I don't have a card on that account, I spend on my main one (overdraft) and then sometimes forget to pay it back

EssexHebridean

I disagree with those saying to discontinue the life insurance and income protection. Life insurance, at the very least, as a single person, may be a condition of the OP's mortgage, and as they are a single parent, having something in place that will potentially help to cover expenses for them and their child in the case of them being unable to work seems sensible to me.

OP I'm inclined to suggest that perhaps one way forwards for you here might be to apply for a new basic bank account - this will have no overdraft facility. You can have your salary, and all regular Direct Debits/standing orders transferred to here, and set up a straight transfer back to cover the fees that accrue monthly on the existing OD. From then on treat it as a debt to which you throw any spare money at, in order to reduce it, It might take a while, but reduce it will, and this will prevent you from risking increasing it still further.

Before you do that though it is absolutely vital that you have a watertight budget in place - you don't want to risk DD's bouncing because there are insufficient funds in the new account to cover. Remember also that if you're spending money from your savings account for budgeted spends, you need to transfer the money over BEFORE you complete the transaction!

cms-help

Do you get work absolutely every single day as a supply teacher? What do you do during school holidays?

If your salary reduces to zero during the holidays and there are some days where you don't get work then this would explain some of the problem as the salary figure is based on a "good" month (if that makes sense).

I ask as I stopped teaching "properly" in August and am now doing supply, choosing to work part-time. I don't get work absolutely every day I request it though.

ReadingTim

giddyG2001 wrote: »

I have income protection because I'm a supply teacher so if I'm injured or sick for any reason, they pay out.

But do they actually pay out? I'm sure the promotional material makes it sound so simple, but dig down into the T&Cs and you'll find that sickness or injuries relating to pre-existing conditions are excluded, the process for claiming is difficult, drawn out, and the company looks for every excuse not to pay out.

I would suggest that unless you've had cause to claim under the policy in the last couple of years, or feel that your employment situation is more precarious than it has been over the same couple of year periods; then there's little reason to believe that the future will be any different to the past, and that you won't need the policy. If you want to re-join once you're in the black, fine; but at the moment, the money could probably be better spent elsewhere.