Freed by 50

My family has grown since I started this journey to financial independence.  Thankfully my salary has grown along with it, and my debts have shrunk.  During this time, my house has remained the same size.  Don’t get me wrong, our house is large enough for both kids to have their own room, and another bedroom functions as my office.  My wife and I purposely bought a house we would grow into rather than a starter home, but even this house has gotten cramped.

With that in mind, we decided to finish the basement.  This would give the kids a dedicated place to play with a separate office space for me, freeing up a bedroom for the third kid that we are already planning to have.

While I probably could have done a lot of the work with friends, between the demands of my job and the time with the kids, I would only be able to dedicate weekends to the project.  I expect it would have taken me the better part of a year to complete.  So we hired a contractor.  The job will take him 4-6 weeks to complete, but the cost for this project will be $37k, or exactly a four year setback to my plan to pay off my mortgage as quickly as possible.

I calculated this by checking what a one-time lump sum payment of $37k would have done to my mortgage, and found that it would have been shortened by exactly 48 months, and saved me $68k in interest.  Wow.  If that’s not motivation to start sending extra payments to my mortgage I don’t know what is.

The good news for me is that this was a budgeted expenditure, and We had planned to do this for almost two years.  We’re paying in cash, so there is no loan to pay off, and my long term plan should not be impacted by this.  But, man, it stings to know that I could have been four whole years closer to freedom.

I’ll have to mull this over in my new office once it’s built.