Your timing belt is living on borrowed time. Our particular engine's are interference engines which means if your timing belt snaps when you're driving it could ruin the valve train and become 4 times as expensive to repair. I got lucky when mine snapped at 120k miles. I was coming to a stop and only going like 5 mph when it snapped so it didn't do much damage.

Everything your mechanic told you is correct. Change the belt and water pump at your earliest opportunity.