House Repair and Debt Consolidation

My water heater failed about two months ago. Due to the setup of my heating and cooling system this meant I had no hot water and no heat. The system was probably 20+ years old. It also handles my air conditioning (which failed completely about 3 years ago). So, I had the tough decision about what to do.

After getting lots of different quotes and speaking with my dad (in the business of heating and cooling for many years), I decided to replace the entire system - hot water tank, heating system, and cooling system. This worked out to about $12 000. I don't have $12 000 lying around.

I talked to the bank, there is a ton of equity in my home (worth about $350, I owe about $160). They are willing to add the cost to my mortgage, but I also need to include my line of credit ($10 000) and my car loan ($10 000). This sounds good to me, lower rate at least.

So, I did this and now I have one monthly payment and one place to look at all of my debt. So, I'm trying to put the money I had set aside for debt repayment as a payment on my mortgage. But, I don't know what happened. This was true for a couple of months, but now I seem to not have the extra set aside. I don't feel like I spent more in the last couple of months.

But, this month I owe $700 on summer camps (next month as well) and my cat had to be put down ($300). So, it was an expensive month.

Plus, I had put my yearly bonus and tax return against my line of credit. So, I no longer have access to that extra money for this year, which would have been used to help on the summer camp.

But, on a happy note: my debt (including my mortgage) is $186 000, and my house is worth $350 000 (not that I could afford to move - as nothing would be available for that). It's nice to have one number in one place. I only have about $16 000 in investments, but it is something and it is growing.

I am hoping to get the debt back down to $160 000 in the next two years and to increase my emergency fund as much as possible in that time. Once I've got the debt back to where I want it to be, I'll increase my emergency fund, and once that is where I want it, I'll be upping my savings. I'm not in the financial shape I'd like, but I'm getting there.