So, it's been decided. I am no longer trying to pay off my debts (well, debt - only one left). No more debt snowball.
I know. It's radical.
No - I have not given up. I just see "storm clouds" on the horizon and I want to be prepared.
With the economy the way it is (in bad shape), there is a very real chance that my husband's commission could go down - waaay down. Now, they might not - but I want to be prepared. So, to be prepared, instead of making extra payments (snowball) to our debt, I will be putting that money in our savings account. If things get bad, we will have those funds to rely on. If they don't, we can take all the money we saved up and make a big payment to our debt.
We still owe $22,000. I wish we owed nothing but it is what it is. We will eventually get to "debt free" but right now we need to be prepared for the worst.
Wednesday, October 8, 2008
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3 comments:
As long as you show the same determination keeping the savings piling up and not spending it as you have in paying down debt you'll be fine. Have you decided on a high line to start the snowball again? If you have a preset goal of extra savings, say 15K over and above planned expenses, I can see starting the snowball again.
That's a good point, Mike. I haven't really decided on an exact figure but probably should. My current annual budget has us ending next Dec. 2010 with $20,000 in savings - but that is assuming my husband's commissions at a certain level. Even in June 2009 our budget plan only has us with $10,000 in savings. It goes up and down with jumps and spurts.
This may be too conservative but I'm thinking I might be comfortable with 6 months of living expenses, which would be around $30,000 for my family.
I know this is out of order from my original plan (Dave Ramsey's plan) to pay off all debts before saving the fully funded emergency fund. I'll have to see what really happens with the economy and my husband's commission.
I really appreciate your thoughtful comments, Mike. :)
I think that is a good idea to take a break from snowballing... in every situation, you have to do what is right for your family & my family is on the same track as you as far as putting a hold on snowballing for a bit. you just start it back up when you feel a bit more comfortable, you know?
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