Son needs advice please

hamletcigars

He has a reasonable job but quite high living costs,when he started out on his own he accumulated an overdraft which is now (and has been for some time) £3,000,he pays roughly £30 per month for this

He seriously wants to get rid of the debt somehow but is finding it really hard to make a dent in it,


would he be better to have the debt seperate (say on a credit card) and pay it like a bill

any ideas please

HBFS

Get him to have a standing order go out every month to a seperate cash card account (no way of spending on it without using an ATM), cut up the card. This should mean there will be cash available to pay it all off at once in the end.

It's not a good idea to try and pay it off with a card or loan, as this will just incur unnecessary interest on the debt.

The above is what I've doing for my £1k overdraft.

trying-very-trying

How about if he draws up a budget, then only draws allocated cash to pay for food and travelling.

hamletcigars

trying-very-trying wrote: »

How about if he draws up a budget, then only draws allocated cash to pay for food and travelling.

Strangely enough he does budget very well and if he saw this as a bill he would pay it ,(he manages everything else very well) but I think his problem is his account is always in the negative ,sort of causes a mental block if you get my meaning

mrsspendalot

I totally sympathise. I think it is really easy to forget that an overdraft needs repaying like any other debt. You just see the available balance as your own money. Is it possible for him to ask his bank to automatically reduce it by a set amount per week/month so it is being repaid?

hamletcigars

mrsspendalot wrote: »

I totally sympathise. I think it is really easy to forget that an overdraft needs repaying like any other debt. You just see the available balance as your own money. Is it possible for him to ask his bank to automatically reduce it by a set amount per week/month so it is being repaid?

That's a great idea,I'll pass that on and see if they will ,thanks