Best way to clear overdraft, please advice

enthusiasticsaver

Is there a chance of you finding a permanent job as a teacher rather than supply? This may then make the car less of a necessity and you could ditch the income protection which at the best of times is notorious for not paying out. I would also think your salary would be higher than it is as supply.

giddyG2001

I have a contract with my supply agency so I know what I will get paid week to week. Unless I'm sick. So I pay the weekly wages into an account and then I pay myself that wage monthly.

I got the income protection because I'm not protected,at all. If I fell down the stairs and broke my leg and was off work for 6 weeks,without that I would be in severe trouble financially. Getting rid of that right now isn't an option,but I do understand what youre saying about them being termpermental. I had a trusted friend look over it though so it's prob the best I can get at the moment.

Yes,I have applied for a basic bank account today so am hoping once that's set up,it will make things a bit clearer.

cms-help

You must have very generous rates with your agency to receive that pay each month, every month. I wouldn't earn that from the agency I am with if I were full-time. Do you mind sharing the name of the agency so that I can get in touch (I have a guaranteed part-time contract but they don't guarantee work the first or last week of any half-term so I am only guaranteed work for 29 weeks of the year)?

ReadingTim

giddyG2001 wrote: »

I got the income protection because I'm not protected,at all. If I fell down the stairs and broke my leg and was off work for 6 weeks,without that I would be in severe trouble financially. Getting rid of that right now isn't an option,but I do understand what youre saying about them being termpermental. I had a trusted friend look over it though so it's prob the best I can get at the moment.

Yes, if you fell down the stairs and if you broke your leg and if you were off work for 6 weeks I can see why you'd have a problem.

But do you fall down stairs regularly? Do you break bones easily? Have you been off work due to illness for more than a few days ever? I haven't managed to yet and I'm nearly 40. You seem to have overly pessimistic view about the likelihood of illness/injury and an over optimistic view of the likelihood of payout; whereas in reality, the opposite is true and you're getting deeper in debt.

Finally, unless your "trusted friend" is a lawyer or an insurance expert, you might as well have given it to your pet dog for his legal view for all the good it'll do you.

-taff

EssexHebridean wrote: »

Life insurance, at the very least, as a single person, may be a condition of the OP's mortgage

Not likely, they don't do that anymore, but as she has a dependent, it's not worth getting rid of, so I agree

Go through your statements for the last month and see if you can identify exactly what you're spending on...

MrsTinks

I disagree Tim - when you are the sole provider for a child I can see why you would like that security in place. And I've never fallen down the stairs either. I do see an awful lot of accidents though where really in some cases no-one were to blame.

OP - that said - shop around! Get the best deal you can and make sure that in the event you need to claim then you can get the payout you are expecting. Also accept that this isn't considered a necessity - that's what benefits are for - so if you want to set aside £30 a month for this then you may need to relinquish something else in your budget.

EssexHebridean

For your standard life insurance to cover your mortgage in the event of your death, you could look at decreasing term - this may prove cheaper than the other sort and would still ensure that your child has the security of the home becoming theirs in the event of you no longer being there to provide for them. (And on a linked note, I take it you do have a will in place to set out who becomes guardian of your little one if the worst should happen?).

enthusiasticsaver

How much is your overall debt? I know you say the credit cards are under control but if you have already paid the overdraft off once on a money transfer card and it is back up again you are not in control of your budget. How did you overspend £3k in just a few months?

You cannot do a dmp on just one debt and it is an extreme option which will ruin your credit rating and may affect getting good remortgage deals etc etc. If you got a card recently presumably you still have a decent rating so I would look to either increase income or decrease costs. Can you take in a lodger if a second job not an option?. If you cannot do that then a dmp will need to be the next resort.

If you have just got a basic bank account then treat the overdraft as a credit card and reduce it each month but beware the bank does not exercise its option to recall it if it no longer sees your salary as going in. You might be best doing a transfer of a regular amount into your new basic account and just using that to live off. I would advise no more credit cards or overdrafts or you will find yourself on a slippery slope. An emergency fund in a saving account would be a good idea for emergency car or house repairs.