£80k debt - 30 month debt free aim - all support is welcome

DebtfreeaimOct21

enthusiasticsaver wrote: »

I think keeping your emergency savings in another account is the best idea. I also think Scott makes a good point about keeping the overdraft separately from your everyday budget so have an account for monthly incomings, outgoings etc and keep the overdraft separate. They are the worst debts to get rid of (except for PDLs) and often the most expensive but it won't be as bad as that Vanquis.

Thank you. I’m thinking about a second account for spending money for things like the food, fuel etc so I can see what is left at any point and use the overdraft account for bills etc.

Scott-Weiland

DebtfreeaimOct21 wrote: »

Hi Scott, happy to share all details and added into my SOA, it’s £5,000 and I think either 16.9 or 18.9%. There is a button online where I can drop it, I think in £50 amounts, but may be lower.

It costs me around £60 per month in fees.

I would do it even if its a 50 drop once a month when you have being paid try and gradually get that interest down.

PositiveBalance

DebtfreeaimOct21 wrote: »

Where do you all put your emergency fund and is it cash? I ask as if I leave it in my bank account then it will just be swollowed up in the overdraft of £5k, so would hardly be noticeable - what motivates you guys best, is it cash?

I have mine in Premium Bonds. The disadvantage is that you don't earn any interest. There are two advantages, though; you can win anything from £25 to £1,000,000 each month in the draw they have instead of paying interest, although the odds aren't particularly good - you probably have a better chance of winning the lottery than the million.


But - and this is the biggest advantage for me - is that when you put the money in, you are only eligible for the draw the month after you put that particular amount in, so for me to take money out and miss the draw, well, it has to be a real emergency! It acts as a psychological check and balance system for me.

Scott-Weiland wrote: »

Can i be nosey and ask how big the overdraft is??? And do you know how much a month your paying in interest and fees??? Sorry too be nosey.

The reason i ask is most banks (including the one i work for) will give you the option too open another current account next too your main one with no overdraft. From here you could pay into the account with the o/d say 25 too 75 per month more than the fees or interest and you could ask the bank to every month lower the overdraft. Its easily done we get alot of customers that do this and call once a month and we can drop the overdraft even a tenner a month if they ask.

I know there is nothing worse than having a huge overdraft being there have the tshirt but this is a step you could possibly take, I would be much happier if i could see the fees gradually dropping and the limit.

That's really interesting, Scott: I remember reading on somone else's thread who planned to tackle their overdraft so much per month in a similar manner that their bank said that they would have to do a credit check each month as they effectively considered it as applying for a 'new' overdraft (where the hell do they get that logic?!).


Perhaps check how your bank would treat you reducing your OD in that manner before taking action, Debtfree?

DebtfreeaimOct21 wrote: »

I have no idea, I’ll dig it out the weekend and have a look as I mostly have just ignored it as I don’t use it and it’s DD for minimum payment. I’ll let you know.

Any progress on this front?

brizzlegirl

Really pleased you've started a diary DebtFree, have subscribed to cheer you on your way...your determination is infectious. Well done. keep on going. It'll be a slog but you are showing the motivation to get it gone.

Have a great weekend

Brizzle x

Scott-Weiland

PositiveBalance wrote: »

I have mine in Premium Bonds. The disadvantage is that you don't earn any interest. There are two advantages, though; you can win anything from £25 to £1,000,000 each month in the draw they have instead of paying interest, although the odds aren't particularly good - you probably have a better chance of winning the lottery than the million.


But - and this is the biggest advantage for me - is that when you put the money in, you are only eligible for the draw the month after you put that particular amount in, so for me to take money out and miss the draw, well, it has to be a real emergency! It acts as a psychological check and balance system for me.





That's really interesting, Scott: I remember reading on somone else's thread who planned to tackle their overdraft so much per month in a similar manner that their bank said that they would have to do a credit check each month as they effectively considered it as applying for a 'new' overdraft (where the hell do they get that logic?!).


Perhaps check how your bank would treat you reducing your OD in that manner before taking action, Debtfree?






Any progress on this front?

re overdraft reduction no the bank wont do a credit check, if it was an increase yes they would. They may do an income expenditure/kyc check ie know your customer but no they wont do a credit check unless there is mitigating circumstance ie you were over the limit massively/getting hammered with charges ie higher risk. If this was the case people wouldnt be able to do what they can on apps ie drop overdrafts themselves. The bank i work for its a couple of checks then sending a form and its done no credit check.

enthusiasticsaver

DebtfreeaimOct21 wrote: »

Thank you. I’m thinking about a second account for spending money for things like the food, fuel etc so I can see what is left at any point and use the overdraft account for bills etc.

That is sensible. Maybe calculate bills money plus an amount to reduce the overdraft and cover fees etc and transfer the rest out to spending money and emergency savings after debt repayments. Bit messy until overdraft repaid but perfectly doable.

DebtfreeaimOct21

enthusiasticsaver wrote: »

That is sensible. Maybe calculate bills money plus an amount to reduce the overdraft and cover fees etc and transfer the rest out to spending money and emergency savings after debt repayments. Bit messy until overdraft repaid but perfectly doable.

Great, I’ve applied, so think whatever I have for spends and even overpayments I’ll put into this one, then from here I can use for food, fuel, anything else, but I’ll be able to see what’s there then for overpayments also.

DebtfreeaimOct21

PositiveBalance wrote: »

I have mine in Premium Bonds. The disadvantage is that you don't earn any interest. There are two advantages, though; you can win anything from £25 to £1,000,000 each month in the draw they have instead of paying interest, although the odds aren't particularly good - you probably have a better chance of winning the lottery than the million.


But - and this is the biggest advantage for me - is that when you put the money in, you are only eligible for the draw the month after you put that particular amount in, so for me to take money out and miss the draw, well, it has to be a real emergency! It acts as a psychological check and balance system for me.





That's really interesting, Scott: I remember reading on somone else's thread who planned to tackle their overdraft so much per month in a similar manner that their bank said that they would have to do a credit check each month as they effectively considered it as applying for a 'new' overdraft (where the hell do they get that logic?!).


Perhaps check how your bank would treat you reducing your OD in that manner before taking action, Debtfree?






Any progress on this front?

Not as yet as a lot of my accounts are paper free, but I am totally rubbish as this one just takes on DD. I’ve decided that I am going to find out all the ins and out of everything and I’ve found myself a pad where I will dedicate a page for each of the debts and I will make it my mission before the end of April to find all of this out and note it all down.

Then at the end of April I will put a new SOA up with the exact amounts to the penny.

Using this book I can make it easier to update my diary as I will have a running total offline so to speak.

I am less freaking out and more excited about this now. Thank you for all your support.

DebtfreeaimOct21

Scott-Weiland wrote: »

re overdraft reduction no the bank wont do a credit check, if it was an increase yes they would. They may do an income expenditure/kyc check ie know your customer but no they wont do a credit check unless there is mitigating circumstance ie you were over the limit massively/getting hammered with charges ie higher risk. If this was the case people wouldnt be able to do what they can on apps ie drop overdrafts themselves. The bank i work for its a couple of checks then sending a form and its done no credit check.

Hi Scott, you are right, I asked my bank and they said I can do it myself at any time. If I wanted them to do it, then would do it but as a plan, so I’ve told them that’s okay and I will take a look.

Scott-Weiland

If they are talking about a plan that usually is a different ball game, noooooooooooooo avoid that. What they are talking about there is there collections or debt management team putting you on a plan where you pay so much a month off and they stop interest and they gradually lower the limit. This will !!!!!! your credit rating as it will show the overdraft as on a plan or in default possibly on your credit file.

I can only comment on the bank i work for who i wont name but we can drop the overdraft at the clients request at any time without involving collections. All banks re processes are slightly different sadly.

If it were me i would open 2 new accounts, both current accounts have no overdraft on either and i would have one for direct debits another for your day too day stuff ie petrol/shopping/socialising etc etc The direct debit account paying into enought too cover all your directs plus a bit extra, most banks can run through over the phone with you your direct debit amounts of dates or can send you a copy of your direct debits via whats called a regular payments list.

I hope this helps, you probably wont believe this lol but i only pay out 2 direct debits for my union fees and my motorbike insurance everything else i do by bill payment or money transfer. This might be another option nearly all banks have decent mobile apps now and i find this so much easier than waiting for things going out or them going out late. Mini work rant here but if i had 10 quid for every direct debit i had cancelled or recalled because it had gone out the wrong date/or amount i would never have too work again