The easiest way to overwrite a text file is to use a public static field.
this will overwrite the file every time because your only using false the first time through.`
public static boolean appendFile;
Use it to allow only one time through the write sequence for the append field of the write code to be false.
// use your field before processing the write code
appendFile = False;
File fnew=new File("../playlist/"+existingPlaylist.getText()+".txt");
String source = textArea.getText();
System.out.println(source);
FileWriter f2;
try {
//change this line to read this
// f2 = new FileWriter(fnew,false);
// to read this
f2 = new FileWriter(fnew,appendFile); // important part
f2.write(source);
// change field back to true so the rest of the new data will
// append to the new file.
appendFile = true;
f2.close();
} catch (IOException e) {
// TODO Auto-generated catch block
e.printStackTrace();
}