A little in debt a little confused

Maryjane_4

Posted this in current accounts but got told to try here...

Sorry newbie here tried to find out what I need to know reading back on past threads but there is so much to read and i couldnt really find the answer i wanted.

Anyway, I have a current account at Natwest that has a £1000 overdraft. I really want to get and pay this off and a £1200 managed loan with them too.
I earn £1030 a month and im prepared to pay as much as i possibly can to get rid of this!

I would like to have another account to live out of (spending money) where im not tempted to dip into my overdraft. Is it possible to do that?

Can i get another current account in my present financial state? Where would be the the best place to go to get one if i can.

Could i possibly get a better loan than this managed one or not because i have this loan in the first place?

Sorry to ask so many questions in one go!

rayday2

I have had several bank accounts and my credit rating is terrible, try A&L they took me on when my rating was at its worse also through quidco there is cash back.

You could ask the bank instead of a managed loan to reduce your overdraft facility each month by say £50 or whatever is better to you. These managed loans they make them sound like an answer to everything but there are other ways and I would try to push for it!

MaggieBear

Hi Maryjane and welcome to the DFW forum .

right I'm not the best person to ask re: the loan, but I can answer some other questions;

Yes you can totally get another bank account, you will have a credit search done against you though, unless you take a "basic" bank account which has no switch/maestro/visa debit facilities and no overdraft - which is fine, and I find it helpful not to have the ability to spend on plastic. Real cash makes you think a little more I think .

Other than that, could you post a full SOA (http://forums.moneysavingexpert.com/showthread.html?t=107280) please? Then we can get to helping you with maximising your payments and minimising your debt

Maryjane_4

Thanks for that i will fill out the SOA when i get home and can try to work out where my money goes.

I just went to Natwest and they were really helpful. I asked loan that is for £1383 (hows that for under estimating!) and she said i could pay it off in lump sums, she said i would be best to use another account and then pay it all off in one. Not sure if this is right or not.

Good to know i can get another account. Its useful having a card i can use everywhere but i think this is part of my problem. The boyfriend now keeps it in his wallet but thats not completly fool proof!

MaggieBear

Maryjane wrote: »

Thanks for that i will fill out the SOA when i get home and can try to work out where my money goes. That's really useful to do - and a spending diary can be quite helpful too; I started mine and was horrified at how much I'd been spending on rubbish that I didn't need and didn't particularly get any joy from - if you do put just about everything on plastic you can take a look at your last few statements and see from there where you've been leaking money

I just went to Natwest and they were really helpful. I asked loan that is for £1383 (hows that for under estimating!) and she said i could pay it off in lump sums, she said i would be best to use another account and then pay it all off in one. Not sure if this is right or not. If there are early redemption and/or overpayment fees that could well be right - if you check your original paperwork it should tell you what the fees are.

Good to know i can get another account. Its useful having a card i can use everywhere but i think this is part of my problem. The boyfriend now keeps it in his wallet but thats not completly fool proof! In that case having your money in an account where you actually physically have to get cash out to spend anything might well be useful to you. This is called a "basic bank account" and sometimes you have to be quite insistent that that's what you want, but they do have to provide you one if you ask

I've added some comments in line to yours

Maryjane_4

Thanks for all that. I missed it yesterday, this forum is so busy i got lost reading other peoples stories instead of mine!

OK heres my SOA...

Monthly Incomings:

My salary - £1,030

Monthly Outgoings:

Mortgage/Rent - £325
Council Tax - £85
Gas and Electric £50 We just paid a 6 month bill.
TV License - Old one just ran out, need to get one:o
Virgin phone/tv/net £50 last month but housemate paid most of it to cover his !!!!!! habit. Usually £15
Organic Veg box £24
loan £48
Dance lessons £40

Total £614

I dont spend a set amount on food, its either what i have in my wallet or what i fancy.
To be honest the rest of my money can go in all manner of random places from going to gigs to clothes, tattoos, conventions, trips away, cinema and dvds.
I tried to work it out but its just all over the place.

I started keeping a diary, yesterday was one of the more expensive days out of the week i spent £25.67 as i went dancing and had to buy a tshirt off ebay for my boyfriend. He did give me the money for it but it still came out of my account.

I think i can get on top of my spending, i think the idea of getting a couple of accounts would do me good so i can split spending money from bills and savings.

I am worried about my overdraft and managed loan, i really want to do something about those.
The loan is as follows...

Total principal + intrest outstanding (to maturity) £2594.35
Rebats anticipated as at settlement date- intrest £870.46
premium £340.36

Total due to be paid by settlement date £1383.53

This means very little to me and might as well be in french but the woman in the bank asured me that i could pay off lump sums without penaltys. Think i might go and ask at the other branch in town just to make sure.

My overdraft is £1000 and i live in it almost all of the month. I couldnt find the intrest rate but i pay about £11 a month for it.

I have more questions but i think i'll stop now as that is enought info!

I am trying to sort my finances as i would like to buy a boat to live on sometime in the next year. I will need to get a loan to do this.

Thanks in advance for any advice!

Keeping_Positive

Natwest arent a terrible bank not angels but are usually helpful. I would be wary of another loan even though mine (see sig) is with NW. All I did was add to my overall debt.

I would set a budget for groceries and entertainment and stick to it then you should have a set amount to pay back your o/d each month. Then call the bank at get it reduced each month.

A loan may be cheaper in APR than the od but would you stick to it and not increase od again this is where I have consistently gone wrong. You need to learn how to budget sounds patronising but not meant to be Im still learning.

Your budget has quite a bit of headroom so you should be ok if a realistic budget for EVERYTHING is done. Have you used Martins budget planner? It makes you think of all the yearly extra costs you dont normally think about.

Goodluck

Maryjane_4

Thanks Wendy.
Natwest seem to be really hit and miss. They have been good to me sometimes but also tried to sell me stuff i dont need (or can afford) when i have gone to them for advice.

I have had a quick look at the budget planner but havent had time to sit down and do it yet. My spending is also so sparadic and random i dont know if i could do it!

I think a clean slate may be the best thing for me.

I have just canceled my Veg box and im considering moving home. Only problem is to do this i would need to have some kind of transport (im thinking 125 bike and doing my CBT) as my parents live in the middle of the countryside.
doing this must cost me less than the £500ish i am spending renting?

Keeping_Positive

When you get the chance use the budget planner and then set up a monthly saver account with Natwest, terrible interest but easy to manage and transfer monies from one account to the other online. Then transfer the monthly amount (as per budget planner) that you would spend on one offs, birthdays, holidays ,xmas etc into it. You will save the months you dont have those costs and be able to use it when they arise.

A wall planner is good for me so I can see what I have got coming up in a month such as birthdays, days out etc.

It a pain but please start to figure out some kind of budget for yourself. I wish I had been stricker on myself years ago.

If living with parents is an option the probably a good idea much cheaper than renting your own place.

Maryjane_4

Thanks again. I will look at the budget planner but my spending is so random i might just be better off setting myself a weekly limit, keep up with the diary and seeing what happens over the next few weeks so i can get an idea what i do spend money on. Then i will be able to set a proper budget.

I was looking at various accounts and wondered if it would be good for me to go for the A&L one with 0% intrest OD? Would i be able to get it considering i have this managed loan?
If i moved banks would it affect my getting a loan for my boat in the next year or so?
Would i be better staying put?

MaggieBear

Hi Maryjane .

TBH my spending was all over the shop as well, when I first started, and I found that yes, setting myself a weekly amount and taking it from there was the easiest way to go.

What I did was worked out my regular monthly bills (I put my TV licence onto Direct debit, it's less scary lumpsum like that, ditto electric and gas), including minimum debt repayments, and then saw what I was left with (about £250 ish). The divided it by 5 and that was my weekly spends budget - for food, clothes, christmas, conventions, the lot. Some weeks I spent less, and some weeks more, but over the month it evened out fine, and I've actually been able to reduce that a bit too, to £45 a week. Anything left at the end of the month went to pay first my O/D and then (or will be, this month ) my credit cards.

My O/D wasn't (is now, cos they've just put it up) my highest interest bearing debt, but psychologically it was the one I know I find hardest to get rid of, which is why it's going first.

I'm also not buying any "treats" new - I've budgeted flights and hotels for my conventions, but any extras are coming out my ebay/amazon sales, "clicks" or overtime payments - they're extra so they need to come from "extra" money

You might get on with a similar way to get your budget started out possibly?