Relatively small but persistent debt - advice appreciated

[Tiffanydiamonds]

WWYD?

I went on maternity leave in November 2020 and accrued some debt as I lost a lot of money due to a variety of reasons. I maxed out my credit cards and overdraft. This debt totals £2750.

I also have a car loan, this is just under £7500. So in total I owe around £10,000. I’m keeping up to date with the minimum payments on my CCs but am constantly overdrawn and never have any money.

I am expecting a sum of money in the next three months which will clear most of the outstanding debt, would you just sit tight and wait for that or is there something else I should
Be doing in the meantime?

Is any of it on 0%?

If not I would try and transfer to that while your waiting.

Do you know when your coming into the money?

Hard to say without knowing your circumstances!

Do you absolutely need the car?
Can you move any of the cc balance onto zero interest cards?

Unfortunately I can’t transfer it as my credit is a bit shit - hoping this will slowly improve given time. It would have been a great suggestion otherwise, though!

Hopefully not too much longer - March or April possibly.

I definitely need the car.

Do you have anything you can sell to go towards your debt? Have you checked if you are entitled to any benefits or help with childcare costs?

Live as frugally as possible until you get this money. No takeaways, coffees or lunches, see if you can walk instead of driving/bus, cheap as possible food (costs very little to live on a vegetarian diet made up of seasonal vegetables, eggs, pulses etc), eat anything in your cupboards and freezers before buying more food, no alcohol, use up cleaning products, toiletries, cosmetics etc instead of buying more, cancel or renegotiate subscriptions, downgrade any paid TV, etc, etc basically living as frugally as possible

If you have any headroom on the credit cards, put some of your normal spending on those as the interest rate is likely to be cheaper than the overdraft. Make sure you pay at least the minimum, preferably by automatic payment.

You might as well apply for one of the current account transfers that's giving free money as you have nothing to lose, might get accepted and could get up to £150 towards paying off your overdraft. Look on Moneysaving Expert for details.

If you pay your council tax over 10 months, the February and March free months will be a little boost towards your overdraft.

Look through the Moneysaving Expert budgeting section to systematically review everything you have coming out, to see if you can get it down.

Once you get this money, pay everything you can off, starting with the highest interest debt and keep looking to see if you can do a balance transfer. Pay the overdraft off and pretend it doesn't exist. Budget ruthlessly to stay out of it.

Move to a system where normal spending goes on a credit card that is paid off in full every month, because this gives you the same cashflow management facility that is totally free instead of very expensive and seen as positive money management by banks instead of negative like overdraft use.

Once you are out of debt, review your budget and make sure you are putting money aside for things like car replacement, also annual and irregular expenses like white goods replacement, car servicing, insurances etc.

If this money is certain then sit tight OP, make your minimum payments and then clear it when you get the money.

I grew up in poverty, (managed to start having disposable income when I was 27 so a chunk of that was as an adult too) and it is relentless and soul destroying, so if this money is definitely coming in then what is the point of being frugal for a few months apart from being blooming miserable?

Try getting a card card hopefully cheaper rate than your overdraft which pays the money into your current account to clear the overdraft. Then try to stick to keeping your current account out of debt.