[ilovols]

My husband was laid off in September of 2007 right after we bought our house.
It took him a year to find a good steady job that actually brings in decent money. However we took a 20k loss on income.

During the year of unemployment, we racked up more debt. Probably around 10k and add that to the existing 5k.We are both in our early 30's and know that we could wipe away all the debt by selling our stocks. (Not part of any 401k)

That would also allow us to start saving money instead of giving it away. We could potentially save 10k in our first year.

I am not sure what to do... sell or hold!

All suggestions welcome!

[ebaines]

Not knowing what stocks you are referring to...

If you have debt that you are unable to pay off from your regular monthly income, you should indeed dip into your savings (in this case your stock investments) to pay the debt off. Think of it this way - you may have an anticipated return on your investment of 8% or so, but the debt is probably costing you a lot more than that, especially if it's unsecured credit card debt. So your best of selling the stock and paying off the debt. Then put yourself on a good budget so that you don't go into debt again, and can start building up your savings again.

[FrankK]

If you are very disciplined financially, I would sell the stocks and become debt free. For me, that's an easy decision. But what you do not want to do is cash out your savings (stocks in this case) to become debt free and then rack up more credit card debt, which would put you in the same place you are today. So to add on to EBaines' comment, you need to be on a budget that you can and will stick to. Otherwise the whole thing is for not.

Good luck!