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Post by mwhite1967 on Mar 3, 2008 19:28:35 GMT -5
I am trying to pay off debt. I own a timeshare that I don't use to its fullest potential. I owe about $9K on it. I have posted it on a timeshare selling website for $10K OBO, and haven't had a hit on it. It ran for 6 mos and ran it again. Still nothing. I originally paid $12K for this. The mortgage is $194/mo and I also have to pay $500/yr for maint fees. I am wondering if I am better off selling it for less than payoff, say ~$6K, in hopes of selling it quicker, so I can become debt free sooner, or to hold out to get a little more for it? Also, I have money in the ESPP that I plan on getting out and using to pay off other misc debt bills. This is a good idea isn't it? Any other advice, as I am trying to pay off ALL my debt prior to getting married next yr, would be greatly appreciated!
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Post by swanberg22 on Mar 3, 2008 22:18:54 GMT -5
Hat's off for working toward becoming debt free prior to becoming married! Having a target date helps keep you focused on your goal.
I don't have a lot of experience with time shares, other than saying no, no, no on my time share trip to Florida. Do you, or have you considered renting it out while your not utilizing it to its fullest potential? That might be a great way to get someone interested in buying, and would help cover some of your costs until it sells. If it's just as difiicult to rent as it has been to sell, then yes, I would consider dropping the price to try and move it quicker. The peace of mind not having that monthly payment and annual maintenance fee will be worth it.
As far as taking money out of your ESPP, again I don't have any personal experience, but I would say it is a good idea. The only downside I can think of is, depending on your situation, you may be creating some tax liablity. For the pros, as a general rule, you never want more than 10% of you investment dollars in any one company. Even the one you work for. This may not be the case, and if not than that's a good thing also. It means you have a 401K(not a good idea to borrow against), IRA(early withdrawal penalties) or other type of retirement plan in place. If you are contributing to a 401K, I would suggest scaling back to only what's being matched, if you're contributing more, until you get you're debt paid off.
One other thing I would suggest is making sure you and your future spouse are fully communicative with money matters prior to tying the knot. It is so important that you both understand your assets, debts and budget. Keeping secrets and not having an open dialogue about your finances can lead to an unhealthy marriage.
Congratulations and best of luck!
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Post by mwhite1967 on Mar 3, 2008 23:17:43 GMT -5
Thanks very much for the reply! I am really trying hard to get debt free. The future spouse is definately good with money and doesn't like debt.....at all!!!! This is a really good thing! I have a preliminary target of October for everything paid off except my truck (which is new) and the time share! In order to do that, I will have to use my ESPP investment. I will have to pay a penalty and interest, as I withdrew some of it last year and am paying on it this year. The wedding is planned for Spring of 2009, but don't think I can get the time share paid off by then, unless we don't find some land to build a house on and then won't have any down payment. On that subject, we have discussed buying a mobile home and living in it, on a rented lot, for 2-3yrs until we can find that "just right" spot to buy and build on. Thanks again for the reply and any more suggestions will be appreciated.
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Post by Ben Dinsmore on Mar 3, 2008 23:34:59 GMT -5
Welcome! Like pete said I would cash out that Employee Stock Purchase Plan (ESPP) and roll that over onto your debt, as long as the ESPP is not part of any tax advantaged retirement account (yours isn't). Be sure that you set some of the proceeds aside as an emergency fund so that you don't have to rely on credit cards should you find yourself in a financial bind. With the timeshare you may of noticed that they ofter are horrible investments if you don't use them, my parents love theirs but they use it every year and have the time and flexibility to make them at least reasonable financially. The only way I've ever heard of people successfully selling them has been to call up the place that you bought the unit from, ask them what the going rate is for your particular unit, and offer the salesman double his commision if he can sell yours to someone at a substatial discount from the current market rate. If it is still going for $12k you'll be having a good day if you can move it for $6K. Good luck, be sure to read our article on debt reduction if you are serious about paying down your debt! www.treesfullofmoney.com/2008/01/how-to-pay-off-you-debt-debt-snowball.html |
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Post by swanberg22 on Mar 4, 2008 0:12:48 GMT -5
I'm glad to hear your financially compatible!
I was fortunate to have some land gifted to me by my parents, but I often times regret not buying a used mobile home and living in it for a few years before building a home. I could have paid off a $20k trailer in three years with the money I could have saved in mortage interest alone. With a bit of depreciation, that's @ 13% towards if you were looking to spend $150,000.00. My wife really didn't want to live in a trailor, and we had a little one on the way, but if you have the resolve it would be worth it.
There's a lot of other cost savings too; no property taxes, lower electric and heating/AC bills, I would assume insurance would be less, etc...
If you can make it until you have 20% saved up, you can avoid PMI insurance once you get into a mortgage too. In general numbers, PMI can add as much as 10 to 15 percent to your mortgage payment. That's $100 to $150 month with a $1,000.00 monthly payment.
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