Aiming to pay off overdraft by 2021

ToPostAnon

The overdraft at the moment costs me about £12 a month to use. When the rate increase comes in it will be about £25 a month if I don’t change anything.
I have an expensive February so going to reduce it by £100 on payday. More would be nice but I’m not sure how realistic that is so doing this on payday and see how it goes.

If I don’t reduce my limit then I will just keep using it so need to reduce the limit in order to pay it back.
The thing is once the aqua is gone it will be a whole debt finished which is quite a good feeling and whilst it has a lower interest rate at 30% the charge difference is minor so I don’t really want it hanging around for another 6 months whereas the overdraft will take time to sort out as it’s much bigger.

Bizzywizard

I switched my bank account to Nationwide flex direct it offers an interest free overdraft for 12 months (need to pay in £1000 a month), my overdraft is £2000! Might be worth doing the switch and then gives you an extra year to get out of your overdraft and save the £12 a month you are currently paying.

Naomim

I'd suggest you complete an SOA to see where your money goes. If bills are £850 and you earn £1850 but use your overdraft there's a surplus disappearing somewhere.

Naomim

ToPostAnon

A switch would be a good idea but I have previously missed quite a few payments so nobody wants to give me a new bank account which is quite understandable. I wouldn’t lend to me either.

I pay -
£503 a month mortgage
£136 Council tax
£50 Phone
£100 travel
£103 entertainment
£75 utilities
£5 insurance

3x credit cards
Plus overdraft

At the end of the year I would like to have paid off the overdraft and aqua and be on the way to paying back M&S with Lloyd’s going last.

I would like to buy a house at some point but I don’t think it will be possible until this is a bit more sorted out.

ToPostAnon

The spending tracker App is very good.
I have put all my categories in for the month and moved some non-urgent spending into March. Trying to be on track but have bought some much needed clothes. And food shop today.

Bills not going out till Monday. Overdraft reduction plan in place but going to phone the bank later in the month.

charlotte1988

Good news you have plans on place

savingholmes

Good luck with your journey. You could do with doing a full SOA - including monthly repayments to CCs and OD to get your true surplus for debt repayment figure. How much do you spend on food, annual bills etc... A spending diary is another good early step to take.

ToPostAnon

Thank you. I know I really ought to post an SOA but I have things in there which I know look unnecessary but things I need. I follow a football team far more closely than I can afford to and it doesn’t make for a good fast-debt- busting journey - And I know this but- I still need to be at the football, go out to dinner, pub, birthdays, family commitments, all of that unnecessary expense.
Plus all the essentials. For somebody in this much debt I have very few clothes so going to buy clothes every month because it’s essential to me right now. But I’m not sure that will make sense to all.

I’ve also committed the MSE- No.1 Sin of moving my partner into my flat when I have a mortgage. I just don’t want to have anything in writing protecting the flat from him. It’s not how I want my life to be (on paper this is a big mistake because if we break up he can claim on the equity).
So I will probably post an SOA but maybe once I have sorted out the overdraft.

No spend day today but food shop tommorow. (I spend too much on food but I do like eating everything)

badmemory

My local council offers a choice of 4 council tax payment days. Does yours? If so it may delay some of your overdraft & save a little.

MidsHollie

Hi there,
Do you have any set goals? It sounds like you have lots of vague plans, eg paying off debt, buying a house, but (if I'm honest) it doesn't seem like you are particularly committed. You could have your debt paid off at some point in the summer if you really committed, and then you could save like crazy to get your house.
I spent years not being fully committed with my debt payoff, which has now spiralled. I'm now having to commit, fully, completely for at least 3 years to be debt free. If my income drops or spends increase, that time will be dragged out. I really would encourage you to address this now. Six months of frugality and you'll have this sorted.
If you want a kick up the butt, listen to Dave Ramsey!