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Question for the Money Doctors

Question submitted on Nov 18, 2013.

Question

I participate in my employers stock purchase program. I've accumulated a fair amount of credit card debt and am at the point where I am only paying the minimum amount due. It is a good idea to sell some stock to get out of debt - I would be selling less than 1/4 of my total stock purchased.

Also, if I do this, what tax implications would there be?

Answer

While saving is important, it is equally important to keep your debt, especially high interest credit cards, to a minimum. The best way to create true wealth is to eliminate the debt payments all together. Once you are out of debt, you will be amazed what you can do with the extra cash flow.

A wise man said live like no one else, later you can live like no one else.''

That said, first, stop putting money into your employee stock purchase plan and use those funds to increase your monthly payments on the credit cards.  If you choose to pay-off your credit cards with money from the stock purchase plan, please make it your personal policy to only pay for things in cash.  No more credit cards. That will help ensure you don't get in the same trap you are in now.

The tax implications for choosing whether to cash in the employee stock purchase plan are complex and will be best explained by meeting with a CPA/PFS in your area. To find one locally, visit www.findacpapfs.org 


For additional information visit http://www.360financialliteracy.org/