Best way to clear overdraft, please advise

[wonderstuff123]

I have an overdraft of £3, 250 that I am always in and am desperate to get out of. In the summer, I took out a 0% credit card and did a cash transfer from there to clear it, thinking this would be the best solution. But I stupidly kept the card on the account and now it's back up to it's max again. I'm so frustrated that I can't seem to get out of it. I know my budget down to the last penny and earn enough to cover that but it just seems to be spending little bits that gets out of control, I feel very ashamed. Can I please have your advice about the best options for me? I've narrowed it down to these two.

1. Get another card to do a cash transfer into overdraft account, cut up overdraft card and only use my account that has no overdraft on it for spending on food/petrol etc. Pay off the card monthly.

1. Open another bank account with no overdraft, transfer all my direct debits to there. Cut up overdraft card and pay off monthly to the account.

I'm guessing number 1 is the best option as I won't be paying monthly interest on my overdraft, I'm just very cautious about getting stuck in the same situation as I did a few months ago where I end up back in the red. But if I cut up my overdraft card, that shouldn't happen.

Any advice welcome

OP - linking this thread for you - talkinpeace (aka Tip) and Badders run the thread and they have great advice - there is absolutely no judgement just great advice in a very supportive environment. Tip deserves a medal

Post on it and just layout everything that's going on, all your bills, expenditure etc and you'll get great advice and ongoing support

Drowning in debt and cannot talk to people in Real Life? A problem shared is a problem brought into perspective - come and join the lens.
http://www.mumsnet.com/Talk/legalmoneyy_matters/2465435-Drowning-in-debt-and-cannot-talk-to-people-in-Real-Life-A-problem-shared-is-a-problem-brought-into-perspective-come-and-join-the-lens

Me and dh managed to accumulate about 5k worth of debt in our first years due to a lot of moving about and emergency situations plus I had a loan and a credit card maxed at 5k on top of this. We managed to clear it within about 6 months but there's no easy fix.

I'd stop using anything that enables you to use credit, cards overdrafts etc, as you have form for it (no offence) I'd not bother trying to transfer again as the temptation is always there. Try and get costs down and if you can get a second job. I was working evening and weekends between a shop job and a bar job while dh worked full time to clear ours, he took on adhoc design work that could be done once the kids were bedded aswell.

It's not easy and it won't be anything less than exhausting but it's worth it, we're now 3k in the black after clearing the 10k debt. Try reading Dave Ramsey's book, it's American but some of it works really well especially the way to deal with debt.

Good luck

Trust me, if I could do extra work, I would. I work full time, am a single parent and have no help from the dad or family. I can't afford a babysitter so it would be counterproductive to go and get a bar job whilst paying for one.

I did advertise my services as a tutor ( I'm a teacher) but after having a bit of interest realised I didn't even have time for that.

Do you have things you can sell to free up some cash and declutter. I did this when I had a mountain of credit card debt. Sold a lot of clothes shoes books DVDs. All stuff I didn't need and no longer wanted. Netted me about £500 in total. It is time consuming though.

Agree have a look at the debt management thread. Some great ideas there. After Christmas (and payday next week) I'm going to have a serious look at my finances and try to get my credit card paid down again (it's crept up with Christmas spends) but it's nowhere near as bad as it was.

Yes good idea about selling stuff. I never seem to have the time but now with the Christmas holidays I can get on it

Ask your bank to reduce your overdraft limit by a certain amount each month?

I know it sounds like you have no time as it is but what about offering childminding from home during the school holidays? Think there'd be quite a lot of interest plus as you're a teacher you'll already be pvg cleared which means you can charge a bit more.

I second selling stuff, have you checked you're not eligible for any additional benefits etc? Also see if you can reduce any bills, broadband etc are usually the easiest to get down if you threaten to leave/cry (this only works on men with me) no one will want leaving customers on their record with xmas bonuses coming up.

I have a spending problem when I'm stressed and the only thing that helped me was keeping a note of everything I spent, some of it was just shite I really didn't need

Second reducing overdraft limit.

Mine was an astonishing £2500. I chopped it right back to £750. But in small increments (decrements?). I could in theory go without. But I need that buffer.

I've now challenged myself to get 6 month a year without dipping into it. It's totally doable. And a manageable goal.

I think option 2 sounds like a good idea - and then decrease the overdraft as it gets cleared. There were some good deals on opening new current accounts which gave you a £100 bonus, so you could open one of those and use the free gift towards the old overdraft.