Ask Liz Weston

Get smart with your money

couples and money

Thursday’s need-to-know money news

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Old Woman Hand on CaneTips on staying debt free, managing an aging parent’s finances and the importance of “the money talk” before heading down the aisle.

How to Stay Debt-Free

Small steps you can take to stay out of debt.

Does This Smell Bad to You? How Long Foods Last

Tips on how to save money by not wasting food.

10 Items Whose Prices Have Jumped the Most in the Past 10 Years

Gasoline, college tuition and…eggs?

Have a Debt Talk Before ‘I Do’

Before walking down the aisle, find out where you both stand on past, present and future debt.

How to Approach Aging Parents’ Mental Decline

Advice on how to deal with parents’ compromised financial situations in a sensitive manner.

Will the new credit score change your life?

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YCS4 coverIn case you missed them, here are some of the issues I’ve been writing about recently:

A much-heralded new version of the VantageScore could offer big benefits to consumers, but only if lenders actually start to use it. Read all about it in “New credit score could change lives.”

HSAs still aren’t a household acronym, but more companies are offering these health care accounts–and yours might be next. For the right people, HSAs can be a way to supercharge your retirement savings since they allow you to invest unused cash contributions in stocks. But you also run the risk of having the market wipe out your health care funds right when you need them. Read “Should you invest health care funds?” for more.

Divorce doesn’t necessarily separate your credit obligations, and a vengeful or oblivious ex can really mess up your credit. Learn what you should know before and after your split in “Don’t let your ex trash your credit.”

Are you giving identity thieves the clues they need to hack into your life? If you use social media, the answer may be yes. Read “Secrets you should yank off Facebook now.”

Soon-to-be ex wants cash-out refinance

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Dear Liz: My soon-to-be ex wants to refinance our mortgage to pay for renovations so we can sell it for more money. He also wants to take out some cash to pay off unsecured loans. (I have $11,000 in credit card debt, and he has over $50,000.) The house recently appraised for $310,000 and we owe $158,000 on it. Is it wise to refinance in this circumstance?

Answer: A cash-out refinance would be a risky maneuver even if you intended to stay married. Renovations rarely boost a home sale price enough to cover their cost. Also, home equity that’s used to pay off credit card bills is often wasted, since the borrower never fixes the problem that led to overspending in the first place and simply runs up more debt. Since he would be getting the bulk of the benefit by having more of his debt paid off, you also would need to adjust the rest of your property settlement.

Often, the best and easiest solution in a divorce is to simply sell the house. You certainly wouldn’t want to remain on a mortgage with an ex after the divorce was final, if you could possibly avoid it. A good divorce attorney can give you advice about how to proceed from here.