How to pay off your overdraft

Action Plan:

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Action Plan Overview

An overdraft is a bit like quicksand: once you get sucked in, it can be incredibly difficult to get out; however, it is possible. We explain exactly what you need to do to clear your overdraft.

		a	Do: Commit yourself to clearing your debts
		b	Do: Get support

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		a	Find out: How much do you have in savings accounts?
		b	Find out: Are you paying more interest on your debt than you're earning on your savings?
		c	Decide: Should you use your savings to clear debt?
		d	Work out: How much of your savings should you put towards your debts?

		a	Find out: How much do you get paid?
		b	Find out: How much do you earn from other jobs?
		c	Find out: How much do you earn in interest or dividends from savings and investments?
		d	Find out: How much do you receive in tax credits or benefits?
		e	Find out: How much do you earn in bonuses?
		f	Find out: How much do you earn from overtime?
		g	Find out: What's your average monthly income?

		a	Do: Get all of your paperwork together
		b	Work out: How much do you spend on compulsory expenses?
		c	Work out: How much do you spend on essentials?
		d	Work out: How much do you spend on luxuries?
		e	Consider: Do you need to budget for any big expenses?
		f	Work out: How much do you spend each month?

		a	Work out: What's your disposable income?
		b	Work out: Do you spend more than you earn?
		c	Decide: Do you need to cut back?
		d	Do: Write a spending budget

		a	Do: Check your credit report
		b	Find out: Will your bank cut the interest it's charging on your overdraft?
		c	Consider: Can you switch to a bank account with a lower overdraft rate?
		d	Consider: Should you open a second bank account?
		e	Decide: Should you arrange a low rate credit card balance transfer?
		f	Consider: Could you pay a lower interest rate by using a low rate personal loan?
		g	Decide: Should you consolidate your debts?
		h	Work out: What's the best way for you to cut the cost of your overdraft?

		a	Work out: How much are you saving in interest?
		b	Work out: How much can you afford to pay off your debts each month?
		c	Work out: How long will it take for you to pay off your overdraft?

		a	Do: Keep a spending diary
		b	Do: Start working to a careful budget
		c	Consider: Can you spend less without noticing a difference?
		d	Consider: How can you earn extra money?
		e	Do: Monitor the rate of interest you're paying on your overdraft
		f	Do: Keep making the payment until your overdraft is cleared