Stopping Debt snowball, Switch to emergency mode.

I was hoping that my car would make it till after we were done with baby step 3, but it has bit the dust. It had 217,000 miles and the transmission and clutch are not needing mechanical work. Rough trade in for my car is $250 - $600 dollars according to Kelly blue book. We have decided not to put any more money into the car and to junk it. The bad thing is we just put new tires on it over the last couple months. Luckily we have a spare vehicle, which is an old 1992 dodge Dakota. It runs and was our vehicle to pick up materials for our home improvement projects. I will be driving it until a new gas getter is found to drive to work.

So we have decided to put our debt snowball on hold and go into emergency mode. We are going to stop saving for everything, except Christmas. We are not going to pay extra on debt or do any home improvement. We will pile up some cash so we can pay cash for a car.

We have our $1000 dollar emergency fund, some vacation money saved up that we could use on a car. We have decided not to touch our savings that is allocated for property taxes and house insurance, since they are bills that need paid when they come. But the vacation fund is not a need.

This month with our savings and money we freed up in our budget we came up with around $3500 to pay for a car. We have been looking for 4 door, that gets around 30MPG and has less than 150,000 miles. But car with those qualities are not that cheap. So we have decided to wait till December, by then we may have enough to buy a $5000 - $6000 car. December is a 6 paycheck month for us instead of the usual 4. So we will have extra money in our budget in December that will help with a car purchase. As soon as we buy a car we will go back and built our emergency fund back up, and then start the debt snowball again.

Oct. 2011 summary

I had one week of vacation that I took in October. I used to do some needed clean up around the house. We had some money saved up in our home improvement fund, and used it to get a 15 yard dumpster. I spent a lot of my week off cleaning up all the material straps that we had piled up in the garage. Working on the house produced a lot of trash to big for regular trash pickup. So we had piled it up in the garage. Now we could finally get rid of all the trash.

We had the material already bought and laying around to replace the old galvanized water pipes with PEX tubing. It took me 2 days to replaced all the pipes, move the hot water heater to the garage(out of the cellar), and remove all the old pipes.

I also switched the remaining electrical circuits over to the new breaker box and removed the old breaker box. I also got the furnace in the garage ducted up to our new rooms upstairs so we will have heat upstairs in the new part this winter. The Garage is now clean. We will now be able pull our vehicles inside in the winter.

All and all a busy month with a lot of accomplishments. We ended up spending more that I would have like on home improvements but it needed done before winter. We had an extra $400 to pay on debt.