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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

AIBU? to be living of your overdraft all the time

104 replies

LidiaM · 02/12/2019 23:42

hi ,
Me and my husband have planned overdraft of £2000 , my partner works full time , I dont work due to having baby and my materninty has finished few months ago,
We dont get any benefits or help from family.
We are renting and are fine with bills etc but we end up using our planned overdraft every single month and it feels like we are always in debt.
My partner comes home with £2,500 a month but despite that l, we always end up with £-2000 at the end of each month . the salary goes in and 3 days later the same thing happen over and over again

It makes me feel shit and I wonder if we are the only one?
:(
I am going back to work in Jan2020 so hopefully it can improve our situation with the overdraft but right now I am so nervous as this is not a guaranteed credit and Im just worries that they can take it away and what are we going to do :((((

OP posts:
LakieLady · 03/12/2019 17:16

@LidiaM, the figures you give leave a fair bit of your partner's take home pay of £2,500 after your outgoings. And you're obviously a good money manager if you can feed 2 adults on £200 a month.

It's possible that there are some things you've overlooked, but I really think that a few months of being really careful might clear that overdraft. And, as you're paying interest on it, the later in the month that you go into the overdraft, and the less of it you use, the less interest you will pay.

Do you pay your council tax over 10 months or 12? If it's 10, you won't have to make payments in Feb or March, so in theory that should make it possible to reduce the overdraft by £320.

The other important thing is for your partner to be on board with clearing the debt. You both need to be committed to it!

Please don't feel you shouldn't claim benefits. You have worked in the UK, your partner works in the UK, you contribute to to life here and you may well be entitled to some help. And you haven't mentioned child benefit, so claim it if you haven't already. It's only £20 a week, but every little helps!

poorstudent1010 · 03/12/2019 18:03

It’s worse than I thought as I didn’t know you’re being charged fees! Definitely call them and explain your circumstances, I would expect them to stop the daily charges and freeze any interest! It’s unethical as they’re essentially keeping you in debt.

Which bank is it?

SeaSidePebbles · 03/12/2019 18:40

Something doesn’t add up. So your expenses are £1500, money in £2500. You should, in theory, have £1000 left, even if it is in red.

Original poster
LidiaM · 03/12/2019 18:57

@Seasidepebbles I know but theres always something extra, birthdays, food out, other occasions etc and theres never enought. every single month something needs repair , something we nees to buy.

OP posts:
SeaSidePebbles · 03/12/2019 19:24

Ok, what I do is this:
I get paid in account 1.
From Account 1:
a standing order covering all the bills goes to Account 2.

a standing order for savings go to Account 3.

a standing order for food and extras goes to Account 4.

The account I get paid serves exclusively as a feeder account. I do my remember the pin, I never take the card out of the house.

The standing orders come out the day after I get paid.
I treat savings like another bill.

The Poles I know work their arses off, for every penny. Never met a lazy one. I also know that the community is quite social and you need to show up, you need to host, you need to buy that present for the occasion, of which are many. But for a little while, set your budget and stick to it. Till you get out of this hole.

countdowntochristmas · 03/12/2019 19:43

Same here although my overdraft is a lot less but I've been going up to the limit a lot more recently. Luckily I just got a Christmas bonus so cleared it which is good because dh has had to have a pay cut so need to budget a lot more . I hate debt

GunpowderGelatine · 03/12/2019 19:50

OP, MN gets a little hysterical sometimes and acts like an overdraft is the equivalent of bankruptcy. When actually, £2k in the grand scheme of things is a relatively low debt that won't be hard to get out of if you take the rights steps. I once had an overdraft for exactly the same amount, and I asked each month for my bank to reduce it by £100 until I got out of it. They rarely take overdrafts away (usually if you're in uncontrollable debt) and never do it without notice.

BarbaraofSeville · 03/12/2019 19:54

If the overdraft is costing £100 pm, that's extortionate and you need to do all you can to get out of it - as that's over £1000 per year on nothing.

Definitely try a credit card balance transfer or even a loan if you think you have the discipline to not run it up again.

How much does your DH spend? Is he on board with cutting back? Will your friends and relations understand that you're short of money while you've had a baby and been off work? SO can't afford lots of gifts and lavish hosting so need to be a bit more basic but still take part?

poorstudent1010 · 03/12/2019 19:54

Banks can certainly remove overdrafts without notice and ask for immediate repayment

neverornow · 03/12/2019 19:57

I had mine restructured into a loan and managed to clear it within a year.

See if your bank will do this for you in January when you go back to work and have more money coming in.

Don't stress! Many of us are doing it or have done it at some point

Jodie77 · 03/12/2019 20:02

I would use your credit card instead or ideally take a loan because that could be even cheaper and pay it off as part of your monthly bills.

user1497207191 · 03/12/2019 20:03

Getting a loan is the best idea, BUT, be very wary - ensure you cancel the overdraft facility and DONT get another, whatever happens, and don't build up credit card debt either. The only way a loan will work is if you control your spending and don't spend more than you earn, whatever happens. If you start building up credit card debt or another overdraft you've just made things worse. Proper control is absolutely essential if you plan to use a loan to repay other debt.

countdowntochristmas · 03/12/2019 20:05

£100 pm for overdraft Shock I pay £6 .
Is this unauthorised overdraft ? Sounds very high !

Isaididont · 03/12/2019 20:06

I used to be the same. Dave Ramsey’s stuff is useful, v American with some of the advice but the principles are good.

Timinfuckingruislip · 03/12/2019 20:06

Meh - I’ve lived in my overdraft many many time’s. Not so much now. If it’s £2k it probably is cheaper to get a loan and pay it off - assuming your don’t go back into it.

Original poster
LidiaM · 03/12/2019 20:27

@countdowntochristmas Its Lloyds bank and they charge daily and it depends on how much you use. if you use 200 of it then you would only pay 20p daily but in my case at the end of each month when I reach around 1.700 or 2000 then I usually pay £3 daily which add ups to 100 pounds each month. its shit

OP posts:
bluesatinmanolos · 03/12/2019 20:27

I think a lot of people struggle with this, OP. I know I definitely did. I did what most students do and got a £2k overdraft in uni and it took me about two years after I graduated to pay it off. If you struggle with will power (no judgement, I do!), what I did was phone my bank and get them to reduce the overdraft limit by £100 each month. It depends what bank you're with - HSBC was happy to do so, but I've heard some charge if you do it too often. However it might be an option! All I have now is a £100 overdraft and a low-limit credit card (but not currently using either).

countdowntochristmas · 03/12/2019 20:38

That's shocking then you need a bank that charges a fee not per day .
Then the advice of a loan to clear maybe the best thing then change banks when you get yourself straight .

Dentures101 · 03/12/2019 22:53

Who do you bank with OP? I'm with Halifax and I reduce my over draft by 10 - 20 every pay day and am slowly paying it off. I can do it on my banking app. When I get wages I'm not in the over draft so I ask for a new limit in the app but reduce it by £x then budget so I don't need that £x. I've cleared £600 in one year by reducing more every month. I also do online surveys and pay into PayPal. When I get to a 10s figure I transfer it and reduce the overdraft. It's a little help but it makes a big difference

Dentures101 · 03/12/2019 22:54

Ah just seen your update. Lloyds. Halifax charge me 1.40 a day!!!

Dentures101 · 03/12/2019 22:56

And that's for £850 overdraft

KaptenKrusty · 03/12/2019 23:05

You can do this ! Trust me - I’m here looking at my bank balance and have £35 to get me through til next Friday ! I’m gonna cycle to work every day so I don’t have to pay for public transport, I’ve just made a huge batch of homemade soup & a veggie curry with £5 worth of vegetables and will live off that and rice and porridge til I get myself to pay day!

Just say no to everything - don’t go out for food, let people know you just can’t afford gifts at the moment being on mat leave - same with Christmas - I’m not doing gifts with anyone (husband and I also broke at the moment!)

Doing a £10 limit secret Santa in my family this year - they understand I can’t afford anything else at the mo!

It’s hard - but you can do it if you just lay low for a bit

It will be easier when you go back to work and have some income coming in

As others have said you should check out martins money website - so much ideas there for making savings!

f00k · 04/12/2019 15:07

Natwest charge £6 a month for using your overdraft on a Select Account. Plus interest. On a £1000 overdraft it can be £5-10. Sorry can't remember the percentage. Might be worth switching.

Nat6999 · 04/12/2019 15:40

You are caught in a vicious circle of debt, years ago I was the same. The only way I got myself straight was to speak to my bank who gave me a loan to pay off the overdraft & changed my bank account to a very basic one that I can't go overdrawn on, I only have a debit card, i cleared the loan in 12 months, all my Bill's for utilities, TV licences, Sky etc go out the day my occupational pension gets paid, my water & rent balance goes out every week on the day my tax credits go in, i only buy food, I keep a fund in the bank for ds clothes & school stuff. I've gone from living hand to mouth scraping the last pennies out of my account before payday to having a reasonable amount in the bank & not having to worry about payments bouncing or going overdrawn.

Nat6999 · 04/12/2019 15:52

I used Moneysavingexpert.com to help me manage my money better, look to see if there is anything you can reclaim, like fees for packaged bank accounts, check if you can get your utilities cheaper, if you have Sky, do you need everything you are paying for, there is an excellent budgeting guide to help you manage your money better. Have you checked if you are due to anything like child benefit or universal credit? You may only get a tiny bit but by qualifying it can mean you get free dental treatment, eye checks & prescriptions. When you do food shopping there are loads of things you can buy the " basics" range in that you can't tell the difference but the savings soon add up, if you are at home you have time to batch cook meals which can save you both time & money in the long run.