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

Dobbibill

Lots of good advice here already.

A spending diary is a must. You are going through money too quickly and not paying off your overdraft - you've got stuck in a rut.

A second account will help along with the other suggestions.
When leaving money in your bills account ensure you leave enough for the overdraft fees and also a set amount to pay off the overdraft each month - treat it like a bill. If you want to clear it within a year you need to look at approx £105 pcm towards it.

If you want to pay off your car insurance annually then you need to budget for this each month - treat it like a monthly bill so when it's due you have the money there for it. That's not going to be so easy this year but going forward, plan for it.

It does take hard work to get it up and running but within a few months it becomes the norm and becomes less of a challenge.

Chucky1234

Some very very helpful advice - thanks to everyone!
A few people have asked about BT, this is for BT Sport as my parents don't have this channel so I pay for it separately as I am a big sports fan.

Going forward I'm definitely going to use a spending diary - and update it accurately which should help me keep track of what I'm spending! Also going to make use of free things at home such as video games, along with the gym and cinema which I pay monthly for.

I really like the idea of having a second account and using the account with my overdraft for my bills, so I can transfer all my money except the bill payments and say £200 per month to pay off my overdraft, leaving me with an account with no overdraft where I have to stick to.

I also really appreciate the advice people have gave me about cutting back on things I'm currently spending. If I fail with my plan of watching what I spend I'll definitely use some of the suggestions suggested.

Thank you to everyone that helped so far and I will update this thread in the future!

National_Debtline

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?

I think having a separate account for my disposable income is a good idea. I am thinking transfer a certain amount each month into this bank account and use this for all my day to day spending, and then leave my direct debits to come out of the bank with the overdraft, which will start to decrease then.

Another option I considered was getting a credit card and using that for all my day to day spending, and then I could better manage how much I am spending and pay it all off at the end of the month, but I think getting more credit is probably a bad idea.

Hi again Chucky1234


You're exactly right, the diary is where you write down everything you spend. You can certainly look at it after a week but it's likely to be most useful after a month of spending. You can then compare this to the outgoings you listed in the SOA and see what the differences are.


Hopefully it will help you to see where the SOA has not been accurate and allow you to work out where you can make some changes. It would be a good idea for you to then update your SOA and post it here to get some feedback.


I'd certainly be very cautious about taking out a credit card. Unless you are really disciplined it's an easy way to get further into debt. I hope it all goes well.


Susie
@natdebtline

chelseablue

I would advise you not to get a credit card!