Help me get out of my (fairly small) overdraft!

Mogley

Wookey wrote: »

Why so much for phone, mobile contract and BT? If i was in your shoes i would just sit in for the next 2 months with no spending on clothes, this would probably be more than enough to wipe out the overdraft, sitting in might be boring but it's zero effort.

I agree here but it doesn't have to be boring. You could look to buy something that would keep your interest for a couple of months whilst stuck at home in between your other activities. Video Game(s)? You have a lot of entertainment spending including Phone, Phone contract, BT, Gym, Cinema, Football to keep you occupied as well. Whilst doing these activities, take with you cheaper food/drinks. Can you give your phone back to the finance company and buy a cheaper phone with SIM only? Can you cancel BT (assuming you mean TV) and pay the termination fee and just watch Freeview?

If you can't work like KxMx does and take fixed amount of cash out for your planned spend, I would be tempted to take at least £400 out of your bank as soon as your paid and give it to your parents to hold. Maintain your current overdraft limit until you have given your parents enough to pay it off and then cancel the facility.
Keep up the spending diary for the whole time because if anything, this makes you think before you spend recklessly.
With the overdraft clear you could open an easy access regular savings account to pay in some of your wages as soon as you are paid instead of giving the money to your parents. This money could be used to cover one-off yearly payments and anything else you wish to save for.

Chucky1234

Mogley wrote: »

I agree here but it doesn't have to be boring. You could look to buy something that would keep your interest for a couple of months whilst stuck at home in between your other activities. Video Game(s)? You have a lot of entertainment spending including Phone, Phone contract, BT, Gym, Cinema, Football to keep you occupied as well. Whilst doing these activities, take with you cheaper food/drinks. Can you give your phone back to the finance company and buy a cheaper phone with SIM only? Can you cancel BT (assuming you mean TV) and pay the termination fee and just watch Freeview?

If you can't work like KxMx does and take fixed amount of cash out for your planned spend, I would be tempted to take at least £400 out of your bank as soon as your paid and give it to your parents to hold. Maintain your current overdraft limit until you have given your parents enough to pay it off and then cancel the facility.
Keep up the spending diary for the whole time because if anything, this makes you think before you spend recklessly.
With the overdraft clear you could open an easy access regular savings account to pay in some of your wages as soon as you are paid instead of giving the money to your parents. This money could be used to cover one-off yearly payments and anything else you wish to save for.

Very good idea. I use my phone a lot hence why the costs are so high. I am under a 2 year contract with the finance company for my phone - 0% interest - so can't cut back much here at the moment. I will be buying the new Fifa on Tuesday so I agree this will help me stay at home and not spend any money - great idea, thank you.

nkkingston

Chucky1234 wrote: »

So are you suggesting it may be better for me to pay my insurance off monthly, even though it would be an increased cost (cheapest I could find paying monthly was £1050) as this will help me budget better? I haven't considered this but I've always thought I'd be better off finding the absolute cheapest quote and then finding the cheapest way to finance it (which in last years case was by overdraft - which weren't the wisest choice because of where I am now!). Definitely appreciate your thoughts, thank you.

Using your overdraft added £168 to the cost of your loan. Which is slightly cheaper than paying the insurance monthly, but has had the knock on effect that you haven't managed to budget for this year's insurance. I'd be looking at a 0% credit card to take the edge off, but you need to be sure you'll have paid it off in full before the deal runs out. Since it's an agreed overdraft, it shouldn't have had too much of an impact on your credit score.

In terms of spending diary, if you've got a bit of free time this weekend, try downloading your last three months of bank statements and figuring out what money went where. It's tougher if you tend to spend in cash, but if you're big on contactless and apple pay it's quite easy to track what's where. A spending diary going forward will help keep you on track, but it won't necessarily tell you where your major downfalls are. You'd be amazed how much money a month can disappear into Costa's gaping maw when you're not paying attention! (I may have overspent my work lunch budget already this month...)

DCFC79

Chucky1234 wrote: »

Hi.

Thanks for this. I think I definitely need to start a spending diary. How do I do this? Obviously every time I spend money I write it down in the diary. Then what? Do I analyse it after a week to see how much I have spent on 'going out' or 'food' and try and reduce it from there? Then check it on a week by week basis to ensure I am sticking to my budget? Is that the general idea of it?

Yes pretty much, people will whip the card out and pay for stuff without thinking do I need that, do I need this etc. If you keep a diary (and an honest one) you can see what your spending the money on, you will see your buying stuff you don't actually need and using cash you should find yourself actually watching your spend maybe cut back on what you don't need.

How often do you go to the cinema ?

Do you go on a set day and do you go with someone else who has a Cineworld card ?

Haircut @ £40pm, is that every month, what do you get for that price ?

Chucky1234

DCFC79 wrote: »

Yes pretty much, people will whip the card out and pay for stuff without thinking do I need that, do I need this etc. If you keep a diary (and an honest one) you can see what your spending the money on, you will see your buying stuff you don't actually need and using cash you should find yourself actually watching your spend maybe cut back on what you don't need.

How often do you go to the cinema ?

Do you go on a set day and do you go with someone else who has a Cineworld card ?

Haircut @ £40pm, is that every month, what do you get for that price ?

I go to the cinema roughly once a week with somebody else who has a Cineworld card.

Haircut is twice a month, £20 each time. You get haircut, wash, dry, hot towel shave, eyebrows if needed - everything you could wish a barber to do really. I need it done twice a month as my job requires me to deal with clients and part of how I present myself is obviously a big part. Have tried other (cheaper) barbers but didn't like how they did it so much.

Mogley

Chucky1234 wrote: »

I use my phone a lot hence why the costs are so high. I am under a 2 year contract with the finance company for my phone - 0% interest - so can't cut back much here at the moment.

Contracts can always be cancelled, you just have to check whether it is worth your while paying the cancellation fee + the cost of the most reasonable alternative. Have you checked your usage vs your contract? Can you use WIFI hotspots to reduce your mobile data usage? Can you ask for a work phone if you are using it for work related tasks? If you are a BT customer there are lots of WIFI hotspots you can find out and about.
I am one of the extremes with my phone because I have an I phone 4 paying £7.50 a month on a "goodybag". My OH got an I phone 7 last Christmas and is paying £33/month for phone and 4gig of data (unlimited txt, mins). £100 paid upfront with £100 cash back. Paying £66/month seems excessive. If you can find it in you to cancel the contracts and save here you'll realise how easy it is to save in so many other areas.:j

Chucky1234

Mogley wrote: »

Contracts can always be cancelled, you just have to check whether it is worth your while paying the cancellation fee + the cost of the most reasonable alternative. Have you checked your usage vs your contract? Can you use WIFI hotspots to reduce your mobile data usage? Can you ask for a work phone if you are using it for work related tasks? If you are a BT customer there are lots of WIFI hotspots you can find out and about.
I am one of the extremes with my phone because I have an I phone 4 paying £7.50 a month on a "goodybag". My OH got an I phone 7 last Christmas and is paying £33/month for phone and 4gig of data (unlimited txt, mins). £100 paid upfront with £100 cash back. Paying £66/month seems excessive. If you can find it in you to cancel the contracts and save here you'll realise how easy it is to save in so many other areas.:j

Thanks for your reply. My sim which is actually £18pm, and I get 600 mins, unlimited texts and 30gb of data - checking my usage, it says I average 26gb data a month so I'm happy with that.

My phone is an iPhone 7+ which I brought on the iPhone upgrade programme at 0% - perhaps this is something I could cut back on as I don't need a new phone every year.

DCFC79

Chucky1234 wrote: »

I go to the cinema roughly once a week with somebody else who has a Cineworld card.

Haircut is twice a month, £20 each time. You get haircut, wash, dry, hot towel shave, eyebrows if needed - everything you could wish a barber to do really. I need it done twice a month as my job requires me to deal with clients and part of how I present myself is obviously a big part. Have tried other (cheaper) barbers but didn't like how they did it so much.

You could save yourself the monthly £17 if you were to go on Meerkat movie days (tuesday or wednesday) and buy a cheap insurance policy.

A haircut twice a month !! I think you can do that less often but my opinion. The twice a month shave I can understand.

theoretica

Would your parents be useful as embarrassment budgeting aids? Set up your accounts so you need to ask them for your card if you spend more than planned.

datlex

Chucky1234 wrote: »

Hi all. I was wondering if somebody could give me some help and to try and stop me living payslip to payslip!

For around the last year or so I have fallen into a habit of just spend everything in my account. I have long been trying to change that but my willpower isn't very good!

Currently I have a £1,500 overdraft with the bank. At the end of the month I will be about £1,100 in my overdraft.

My income is £1,350 per month after tax.

Expenses are;
Car payments £220pm (stupid I know)
Fuel around £110pm
Car servicing £21pm
Board (live with parents) £120pm
Food £40pm
Phone £45pm
Phone contract £21pm
Gym £17pm whether or not you use this is irrelevant, go for a jog, buy some weights to use at home and drop the gym temporarily
BT £22pm Don't your parents let you use their phone/internet?
Cineworld card £17pm I appreciate you go once a week with a friend but if you cut back to once a month you would save a lot. Use alternatives such as Prime, Now (£8 if you get use gift cards or less per month)
Haircut etc £40pm
Football (play 2 or 3 times a week) £40pm
New clothes etc £100pm I guess being young you feel the need to buy the latest fashion. Try alternative clothes buying free months.
Going out/gigs/events £100pm

TOTAL EXPENSES £913.00

Money which should be left over = £437.00pm
If relevant, I am a 20 year old male living with parents!

Chucky1234 wrote: »

It's a one off payment in November for £800. I could choose to pay for it monthly but then it would cost me more as not all insurers offer that option and at my age and location there aren't many cheap ones.

I'm not certain the bank will fund it, I have just assumed. Even more reason to sort myself out sooner rather than later.

If either of your parents drive and have a clean driving licence add them as a named driver it can help reduce the risk.

StokieBecks wrote: »

Cheaper haircuts, less clothes spend a month (do you really spend 1200 a year on clothes?) and a reduced entertainment allowance for a few months to allow you to save up.

Are you using the gym and cineworld memberships enough to justify them?

If you can avoid it you need to avoid trying to increase your overdraft (don't try for a loan either) there is no sense to getting yourself more into debt. If this means you have to make 12 months of monthly payments this time around then so be it as it will help you to start to budget knowing that money has to come.out every month.

Ok I think you need to not just consider whether you use something but whether you can actually afford it in the short term. Hence whether you use the gym is neither here nor there but being able to afford it is. Saving at the end of the month rarely works. You need to save on payday (either as an SO to your savings or as a manual transfer to them). You have a lot of unnecessary expenses are you try to put on an image to impress? I noticed you have a hair cut every 2 weeks. Stretch it to every 3 weeks and you will save £180 a year. £1200 is a lot to spend on clothes. I noticed you want to buy suits for your new jobs. Did you not wear a suit to your old job? And have some evenings at home.