The Goal: To pay for my transmission repair with cash and still have $1000 in savings.

This post is more about some factors that will affect my goal.

A while back I read a blog post about the poster’s form of debt snowballing. For those that don’t know, a debt snowball, is paying minimum payments on your debts with the lowest interest. Then attacking your highest interest debt. Once the first is paid off you apply our “attack” money (as I call it) and the minimum towards the next debt. You keep doing that down the line. Is that Dave Ramsey?

Back to my point, the post author said that he pays the minimum on all of his cards and saves in a high yield account. Once he has enough to pay the card off and some arbitrary amount over that he pays the debt in one payment.

He made up his mind to not use his credit cards again. So his rationale was since he didn’t have an emergency fund the money he was saving for the debt could act as an emergency fund. He was aware of the difference in interest rates.

I am doing a hybrid. I am attacking my debt, but I am also saving a decent amount. Originally, the savings was for an emergency fund. Now the first $2000 or so will go to my transmission.

But I’m starting to rethink this (again). I have $422 in savings. My lowest credit card balance is $690. I’m going to continue to budget the $300/mo to pay off the credit card. Now I’m wondering if I will take the savings account and put it towards the debt first instead of the car.

In other words, the goal is the same. I will pay for the transmission with cash and still have $1000 in savings. How has this all changed? I will pay some debt as the first goal. Then I will move on to saving for the transmission. So far, this isn’t my official new goal. I’m just thinking out loud here.

I want to be out of debt so badly. But when it’s 30 degrees and I have to ride my bike and I going to want to be out of debt more than having a car?

If I decide to go that route then I think I will just sell the car altogether. I don’t know. But for now the goal remains the same.

The Need: $2700 (minimum)

The Status: $422

What do you think? Prolong the experiment by using my savings towards paying my credit card? Lower my saving amount and put it towards my credit card? Continue on the track I’m on in case I decide carless life isn’t for me?