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Liz Weston

Thursday’s need-to-know money news

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Today’s top story: Sustainable investing could get a lot harder. Also in the news: Why you should file the FAFSA ASAP, why savings accounts and CDs are still worth it despite low rates, and how to find your lost 401(k).

Sustainable Investing Could Get a Lot Harder
The Labor Department wants to keep socially responsible investments out of 401(k)s and private pensions.

The FAFSA Just Opened: Why You Should Apply Now
File the FAFSA early to get a better shot at more free money and more time to appeal if you need to.

Savings Accounts and CDs Are Still Worth It Despite Low Rates
Rates will rise again.

How to Find Your Lost 401(k)
Don’t leave hard-earned money behind.

Wednesday’s need-to-know money news

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Today’s top story: How to pay for a home remodel without tapping your equity. Also in the news: U.S. unemployment shrinks, but recovery varies across race, sex, and age, how to avoid last-minute tax surprises when closing your business, and is COVID-specific travel insurance worth buying.

How to Pay for a Home Remodel Without Tapping Your Equity
Paying for a renovation equity-free can help you expedite the funding process and even start the project sooner.

U.S. Unemployment Shrinks, but Recovery Varies Across Race, Sex and Age
The recovery isn’t universal.

Thinking of closing your business? Avoid these last-minute tax surprises
Your state may also have requirements for dissolving your business, including canceling registrations and licenses.

Is COVID-Specific Travel Insurance Worth Buying?
What to consider before your next trip.

Sustainable investing could get a lot harder

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Interest in sustainable investing is soaring, as more people become convinced that making a positive impact can be profitable as well as good for the planet and society. Unfortunately, the Labor Department doesn’t think these investments belong in your 401(k).

In June, the federal regulator proposed a rule that would restrict workplace retirement plans from investments that include environmental, social and governance considerations. Popularly known as ESG or socially responsible investing, this approach considers the sustainability of a company’s business practices.

The Labor Department says only returns, not business practices, should matter. But its proposal is unusual for a number of reasons, including its wide range of opponents. In my latest for the Associated Press, a look at how the opponents of sustainable investing could make things much more difficult.

Monday’s need-to-know money news

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Today’s top story: Starter credit cards are still a thing but are harder to get. Also in the news: A new episode of the SmartMoney podcast on debt and refinancing, debt management as an alternative to credit card relief, and should you let your insurance company track your driving?

Starter Credit Cards Are Still a Thing but Harder to Get
Starter credit cards have gotten harder to qualify for in recent years — but not impossible. And more options exist now.

Smart Money Podcast: The Psychology of Debt, and When to Refinance
People are having complicated feelings about plastic.

If Credit Card Relief’s a No-Go, Check Out Debt Management
Not everyone will qualify for hardship programs or find the terms affordable.

Should You Let Your Insurance Company Track Your Driving?
You could get a significant discount.

Q&A: When credit scores take a pandemic dive, how to figure out what caused it

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Dear Liz: My VantageScores as reported by TransUnion were in the 780 to 790 range until around February, when they all dropped 40 points for no discernible reason. My FICO 8 and 9 credit scores remained unchanged around 760 and still continue to increase. What would cause that?

Answer: VantageScores tend to react more than FICO scores when you apply for new credit, but 40 points is a pretty big drop. The other usual culprit when good scores fall is higher credit utilization, or using more of your available credit, but typically your FICO scores would have dropped as well.

Most credit monitoring services will offer you some kind of explanation for why your scores changed, so that would be the first place to look for clues. You also should check your credit reports, which are now available weekly from AnnualCreditReport.com.

Q&A: Learning an expensive car loan lesson

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Dear Liz: My grandson bought a new car with a loan that has a 24% interest rate. He owes $17,000, and the car is now worth $5,000. What options does he have to get out of this situation?

Answer: The best solution would be to refinance, but that can happen only if your grandson has some equity in the car or is able to get a lower-rate, unsecured personal loan to pay off the car loan. Your grandson probably would need good credit and steady employment to get a personal loan, as lenders are scrutinizing applications more closely these days.

Otherwise, his best course is to “drive out of the loan,” or keep making payments until he owns the vehicle free and clear. He should be making extra principal payments, if possible, to speed up that day.

You can encourage him to hang on to this car as long as possible after it’s paid off so that he can save up the cash for his next car. If he can learn from this experience to pay cash for cars, or to have at least a 20% down payment, then the expensive lesson may have been worth it.