Total money disaster - feel very stressed

[doglover]

Through my own total incompetence, I am very, very overdrawn at the bank. I've always had some savings to dip into but that luxury has now gone. For so long, I've been able to buy clothes, household stuff etc without thinking about it, but this cavalier approach has resulted in my being £1500 OD. I've been a complete 'ostrich' - not opening letters from the bank for a couple of weeks - knowing that my finances were a disaster. I permanently feel sick and disgusted with myself. If anyone can offer me any practical advice about how to address this issue, I'd be immensely grateful. TIA.

Don't give yourself a hard time, doglover. GBP 1,500 isn't the end of the world. People run up tens of thousands of pounds on credit cards and storecards and totally bury their heads in the sand. You are not - you are sharing about it on Mumsnet .

Just ring the bank, tell them you've been a bit of a wally, and agree how you are going to pay it back.

Oh, it's so lovely to get a reply, MFSM! Many thanks for taking the time to do do. I will follow your advice and start to take responsiblilty for my own finances.

Do you have an approved OD facility? And if so, for how much?

If you don't - see if you can sort one out, as it's much cheaper.

Anything that is over and above this, or if your OD isn't approved, you need to get this transferred to a loan, with regular payments. It's not a massive amount, so you should be able to pay it off relatively quickly. But don't leave it as an OD or the interest payments will be horrendous.

And then, if you no longer have any savings (why not - have you just spent it all?!), you need to have a serious look at what you've been spending every month and working out what you can cut down/out.

It's boring, but if you're running up an OD like this then you have to do it, and then set yourself a weekly/monthly budget that you will not exceed.

Do you have any stuff that you could sell, to cut down the OD/add back to your savings account?

OP - don't beat yourself up too much about this - you are an ostrich no longer!

This is very manageable amount of debt to pay off.

Get yourself over to money saving expert. Use the budget tools there, check the charges on your overdraft, work out if this is the cheapest way of paying it back. Posts on 'debt free wannabe'. Lots of lovely people on the MSE boards too! :)

Thanks again. Really practical advice. I feel such an idiot and have not told anyone . Hopeless case!!! I feel better admitting that I've been a twit!!

At least you've noticed before it had got too bad and you're prepared to make some changes to put things right. Definitely talk to the bank. Overdrafts are very expensive ways to borrow money long-term. They may be able to convert the overdraft to a loan which would give you one payment to meet each month and a fixed amount of time to pay it off.

Then you have to stop overspending. The best way to do that is to go through all your accounts and all your statements.

• First work out exactly how much comes in each month. Usually, that's the number you can't do much to change.
• Second itemise all your essential outgoings. The things you really have to pay. Mortgage/rent, insurance, utilities, council tax etc., and the bank loan if you convert your overdraft.
• Next step, spend an afternoon on comparison sites and see if you can reduce your essential outgoings at all. If you can shave £5 off your gas bill each month and £5 off your broadband provider and another £5 off your house insurance it can quickly add up to hundreds each year.
• Finally, the number you have left - income less essential outgoings - is the amount of money you have to budget each month for irregular expenses like groceries, clothes, food, leisure activities. This is the point when you have to be realistic about what is essential and what is nice to have.

Do you have any other debts besides the overdraft?

No, none. I don't have any credit / store cards. Thanks again for helping me. It's been my own stupid fault for getting in this mess and I now feel better-equipped to heave myself out.

I've just spent 2 hours photographing numerous items for ebay. Ok, it'll only be a small amount knocked off my total debt - but at least it will be ingoings rather than the unacceptable alternative!

Yay! That's a really good start. Don't forget to talk to the bank as soon as you can about a loan.

I think going through your bank statements to see if you can recognise all outgoings and mark those you can do something about would be very helpful :)

Yes, I agree, HA. There are certainly things that I've bought on impulse which have been completely unnecessary!

Anything you have bought recently you could return to store? Well done for getting your head out of the sand, you should soon clear it if OU keep track of all your spending, I wold recommend writing down all expenditure to see where your money is going, it makes such a difference when you can account for every penny and makes you think more about whether or not to spend. Have you tired moneysavingexpert.com, whole forum of people who are debt free wannabes, their company may help you feel less overwhelmed of keep posting here, good luck!

I think some people prefer paying for stuff with cash - it may help to make it more real for you too

So many fab tips and hints - I'm really grateful for all this support and kindness. To update you, I phoned my bank this morning (feeling incredibly anxious) but the guy I spoke to was fantastic. We talked through my account and have come up with a plan to sort it out. I would reccomend anyone in a similar predicament to do the same .............. after confiding in MN, of course!!