# Need help to get out of overdraft



## newuser2011 (1 Jan 2011)

Age: 32
Spouse’s/Partner's age: 38

Annual gross income from employment or profession: 44k
Annual gross income of spouse:45k

Type of employment: Sales / IT manager

In general are you:
spending more than we earn (i think)

Rough estimate of value of home €200k monthly payment €1490
Amount outstanding on your mortgage: €283k

*What interest rate are you paying?  4.6%*

Other borrowings – Personal Loan, outstanding amount €6k, monthly €424 but we are paying €624 to clear it quicker, it finishes in september, this was originally a 16k loan. Credit union loan outstanding amount is €2700

Do you pay off your full credit card balance each month? no 
If not, what is the balance on your credit card?  3k on two cards, we pay €100 of each card per month.

Savings and investments:  €600 in credit union 

Do you have a pension scheme? yes

Do you own any investment or other property? no

Ages of children: 3yr old

Life insurance: €38 per month

we also have the following
creche 830/month
misc, phone/broadband/sky/mobile phone/etoll/house insurance etc total €400
cost of running two cars, petrol/diesel total per month €260
car tax €1240 per year
car insurance €1000 per year


*What specific question do you have or what issues are of concern to you?*

We currently live in our overdraft of 1000 every month, and also if anything pops up like visit to doctor etc we have no lee way with money at all. What is the best way for us to get out of the over draft, we are looking to reduce this to about 200 a month if possible and also how to cut monthly spendings.

Feel free to ask any questions if i have left out information


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## UFC (1 Jan 2011)

Instead of overpaying your loan use the extra money to pay down your overdraft...?


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## PaddyBloggit (1 Jan 2011)

+ 1 ... my thoughts exactly!


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## Fatphrog (1 Jan 2011)

Pay off the highest interest loan first, either the OD or the CCs.


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## newuser2011 (1 Jan 2011)

The reason why we were clearing off the loan quicker is because its a huge amount per month and want it gone completely, by saving the 200 per month we still cant get out of the overdraft, it would still take 5 months, meaning our loan will be still with us till middle of next year.


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## Greta (2 Jan 2011)

You should try to clear off your credit cards and then pay balance in full each month (or not use them at all) - otherwise you are wasting money on credit card interest. As you actually have two credit cards, try to throw all the money to clear off one of them first, paying minimum payments on the other (and not spending anything more on them), then clear the second one.

I understand you wanting to get rid of the largest debt first, but you should try to see the overall picture - which debts are costing you most in interest? - and get rid of them first. Overdraft is probably more expensive than the loan, and so too are the credit cards.

Try to cut down on unnecessary expenditure, such as sky. 400 euro on phones, tv etc (even with etoll) seems rather high.


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## mercman (2 Jan 2011)

Have you considered requesting a 6 month / 1 year interest only option from your Mortgage Provider ?? Also consider reducing your SKY package and your mobile phones could be reduced if you were to change package. The motor Insurance and the home insurance could be reduced if you offer the business to the one company, who might offer a discount. With things getting tougher surely the creche will drop their rates somewhat.

But as the other posters have mentioned, tackle the CCs first as they have the highest interest.


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## Bob_tg (3 Jan 2011)

Do you need the two cars?


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## newuser2011 (3 Jan 2011)

thanks for the replies..yes we need both cars we work north and south side and rely on both cars, we already sold our petrol guzzling car and bought a cheap diesel run around so are saving money now with less to pay out on petrol.


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## newuser2011 (3 Jan 2011)

ok my sky was costing €76 per month so have reduced it to €48 per month and also NTL i have cancelled my house phone and just leaving the broad band which was costing 60 down to 32euros per month now which can be paid by my work.


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## Pope John 11 (13 Jan 2011)

Loose Sky TV. No need for it until you reduce all debts


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## niceoneted (13 Jan 2011)

What is your actual net take home pay including childrens allowance? 
Start from here and then write every outgoing per month down. 
Start a spending diary. 
Look at what you are spending on groceries, lunches, coffees etc and cut back here for a few months til you get sorted. 
You could get a good home phone and broadband package for a lot less than 60 euro if you will benefit from using the house phone.
Go to basic sky package for 6 months at least it will cost 23 euro. 
Cut back on tolls if you can by avoiding them - use an alternative route. 
Apply for 0% balance transfers on the credit cards. 
View ESB and Gas bills if you have them and try to cut back on them turning of appliances/lights when not in use - change to LED/CFL bulbs. Turn thermostat down on heating. Use it less put on an extra layer.


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## Bronte (13 Jan 2011)

You should not go interest only on your mortgage, it will only give you a false sense of having money and lead to worse debt.  How about changing your overdraft amount of 1K to 900 in Jan, 800  in Feb to wean you off it.  

Can you put up the interest rates on each of your debts.  Also a further breakdown of your outgoings would be helpful, not just for us but for you to see where exactly you are spending right down to lunches, coffees etc.  On those salaries you should be able to manage well.


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## DB74 (13 Jan 2011)

Just pay the €424 for 2 months. This will clear €400 of the OD but the loan will still be cleared by the end of the year. The €624 for December can then go to clear the balance of the OD. 

The interest rate on the OD is probably far in excess of the loan though and the OD should be cleared first if this is the case.

eg - the interest rate on my OD is free for the 1st €500 and then something like 20% on the other €500. It would actually be cheaper for me to take cash out of a credit card and use the cash to pay off the OD in full - that's how bad the interest rate is!


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