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ChadTower:

--- Quote from: DNA Dan on September 20, 2012, 04:25:34 pm ---You know what too though - As the economy improves you're just going to be looking at more money down the road. So at some point you just have to take the risk if you really want it. I'm surprised the cost is that much. What work does that amount entail? (If you don't mind sharing.)

--- End quote ---

Yeah, if you mean that the cost is going to increase as the economy improves. That will happen. But this can also be done in stages so that it doesn't entirely destroy the cushion. That will cost more in the long run but it will have a ton less risk of one injury destroying the whole plan.

javeryh:

--- Quote from: ChadTower on September 20, 2012, 02:05:20 pm ---
It's a reasonable sounding plan but I don't like that 18 month cushionless period. An awful lot can go wrong in that span of time.

--- End quote ---

Agreed. This is what makes me nuts. I like having to not worry about finances and I live my life accordingly. The only amount we owe anyone in the world is the mortgage on our house - cars are paid for, student loans are paid for, no credit card balance, etc. I just hate having debt which is why we are trying to do this project from savings (no additional debt).

--- Quote from: DNA Dan on September 20, 2012, 04:25:34 pm ---You know what too though - As the economy improves you're just going to be looking at more money down the road. So at some point you just have to take the risk if you really want it. I'm surprised the cost is that much. What work does that amount entail? (If you don't mind sharing.)

--- End quote ---

This is the problem... I feel like the job is just ever so slightly out of our reach unless we take a chance. We have a meeting Saturday with the low bidder to go over the plans and see if there is anything we can cut to get within our budget. There is some interior work going on in the existing house that we may be able to live without (windows in blank walls, moving the front closet, etc.). If there is some savings there we will just hold off.

The job consists of adding a 15' x 23' structure off of the back of my house. This will include a family room on the first floor, a master bathroom and master bathroom on the second floor and a full basement (and we are excavating the existing basement to match the grade of the new basement). The existing upstairs bathroom is also being redone (it is being made smaller with the additional space becoming the hallway to get to the new area). On the first floor we are also installing a new counter in the kitchen because part of the new room will be directly behind the existing sink (so we are turning that into a high counter/sitting area). We are also knocking down one existing wall on the first floor (this has to be done or the overall design won't work).

The pisser is that we have to demolish our detached garage and build an entirely new (smaller) structure to get under the town building coverage zoning regulations - the estimate on that alone is approximately $30,000 and we don't even want it. That's about the amount we are over budget. It's a lot of work.

DNA Dan:
To be honest with that much work going on, you might be better off taking a loan. Look at this way, rates are the lowest they have been in decades. The extra money you'd pay for interest is a hedge against not having a savings cushion and taking on that added risk. There's something to be said for using the bank's money when it's cheap, and minimizing your risk by being flush with cash. Even if it was a small loan and you kept only half your savings, that would be better than wiping it completely out. I know you said you hate owing people money, but I guess you need to decide if that is better or worse than having no cash on hand.

Just because you have a loan, doesn't mean you can't pay the principle back early and opt-out of all that interest if the loan went to term. Put your tax return, any bonuses, pay raises, etc., on the loan. At least this is something that should APPRECIATE and not DEPRECIATE in value. If you were doing so to buy a new car, that would be a different story.

ChadTower:

It's also worth considering that if you have to stretch so far it makes you nervous that you really can't afford it yet. You're not done saving for it.

eds1275:
Take it from me, a faceless stranger on the internet. You've got to enjoy your life. This is what you want. Go for it. I would go for the loan, or use half money half loan so you still have a bit of cushion. These low interest rates aren't going to last forever and the faster you do it the longer you and your family can enjoy it.

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