overdraft...
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| Tue, 07-12-2005 - 7:40am |
Okay, hope I don't bore none with my ideas, but I'm trying to find the best ways to get out of debt and with this board I have finally found a way to put my thoughts into words and get some input.... okay here is my idea. I said I will free up 20 extra Euros in September and I have just changed the flat rate with my internet-provider which saves me another 20 a month. I was thinking about putting it toward the credit card bill... however... I have overdrafted the overdraft on my account by about 400 Euros a month, the result of which is, that bills are starting to not be paid to not increase the overdraft even further. In November we get 1200 Christmas bonus that will help to get the overdraft (currently 2400, I'm allowed 2000) down a bit. However, if I use the 40 that will help too. Now what I'm mulling over is this: Should I just leave the 40 extra in the bank, which makes it awefully easy to spend, if I don't stick to the budget as planned, i.e. no extras and €10.00 for food or should I take the 40 out, put it into savings and then pay a lump sum every 3 months? On the other hand, if it is in savings, I can just as easily take it out and spend it. But € 120 does not get "lost" as quick as 40 Euros do. What do you think?
Sushi

Hi sushi,
IMHO you should first get down from that 400 overdraft above the 'allowed overdraft'-line. I don't know about your bank, but my bank charges outrageous interest on that extra money, more than on the cc, and it also makes them list you as a not very dilligent and trustworthy customer. I learned that firsthand when I refinanced my debt (going from overdraft to a regular loan at a lower interest rate), and they told me my credit history was not as good as it should be as I had overdrafted my Dispokredit (allowed overdraft) several times.
Putting those saved 20 Euros on your savings account yields a lot less interest than leaving them in the overdrafted account will - because you won't have to pay interest on another 20 Euros :-)
Greetings, Jordis
ivy_jordis
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Hi Jordis,
thanks for the input. I think that will be a good idea, as the bank is already sending some bills back. You are right about the interest on the savings account. I think that is only 2% not worth talking about, really. Actually, I think if I can discipline myself enough to just take out the alloted amount and not go overboard because, my gosh we have 40 euros extra, lets go spend it... then we should be alright. :)
Just got your e-mail. Good to see a fellow German here... maybe we can help each other out as well, when American regulations don't apply.
I appreciate your input.
Sushi
Hi Sushi - I would apply the money to a bill if there is even a remote chance that you will spend it otherwise.
All my best,
Danni
hmmm, I think mentally getting the overdraft down would help me tremendously. It would be an awesome relief for me and my husband (question: what does DH mean? Disfunctional half? LOL). Anyway, I'm not really worried about the credit-card right now, not as much as my husband is. Yes, I think I definitely want that thing gone. After I'm done paying it down, I'm gonna make sure that I lower the limit to 500 Euros a month and not get it up again. 500 is easier to pay back than 2000, if you ask me.
Okay, time to go home... :)
Sushi