June 29, 2014

Private Colleges Have Gotten More Affordable

No, honestly, its true. I learned about this on Planet Money's show The Real Price Of College  

The actual net cost of tuition at private non-profit colleges has gone down over the past 10 years when accounting for inflation.   

The College Board has a nice chart with the data.

In the 2003-2004 school year the net cost of tuition was $13,600 on average and now for 2013-2014 its down to $12,460.   Both those figures are in 2013 dollars.

The published list price has instead gone up from $24,070 to $30,090 over the same period.   Net price and list price are quite different at private schools due to the hefty financial aid and scholarships that are often offered to a majority of students.

Of course this is all inflation adjusted dollars so another way to say it is that private tuition has not gone up as fast as inflation in the past decade.    The nominal cost in 2003 would have been about $10,700 so it has gone up in nominal terms.   But that $10,700 is worth $13,600 today because of 10 years of inflation.   So in today's dollars you're spending less out of pocket on average for tuition than you would have 10 years ago.


June 27, 2014

Best of Blogs for Week of June 27th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Moneybox has a graphic comparing wages for occupations Why You Should Have Gone to Med School, in One Gigantic Chart


June 24, 2014

Residential Electricity Costs by State - 2014

I discussed this topic in 2011 but the numbers have changed since then.

Nationally electricity averages 12.41 cents per kWh.     I live in the Northwest and our electricity is relatively cheap here.     The US Energy Information Administration has state level averages on electric costs.   Note that these are just state level averages and your electric utility may charge more or less and your rates may vary depending on time of use or the amount of power you use.

Here's the list of all states for April 2014 :

Alabama 11.79
Alaska 19.03
Arizona 11.97
Arkansas 9.75
California 10.17
Colorado 12.19
Connecticut 19.87
Delaware 13.33
D.C. 13.16
Florida 11.76
Georgia 11.49
Hawaii 38.08
Idaho 9.55
Illinois 11.77
Indiana 11.9
Iowa 11.71
Kansas 12.62
Kentucky 10.72
Louisiana 10.12
Maine 15.38
Maryland 14.08
Massachusetts 18.19
Michigan 14.62
Minnesota 11.97
Mississippi 11.87
Missouri 10.55
Montana 9.98
Nebraska 10.14
Nevada 13.57
New Hampshire 17.54
New Jersey 15.72
New Mexico 11.82
New York 19.56
North Carolina 11.84
North Dakota 9.14
Ohio 12.4
Oklahoma 11.05
Oregon 10.37
Pennsylvania 13.12
Rhode Island 18.26
South Carolina 12.52
South Dakota 10.26
Tennessee 10.81
Texas 12.07
Utah 10.2
Vermont 18.07
Virginia 11.08
Washington 8.75
West Virginia 9.56
Wisconsin 13.77
Wyoming 10.24

The 5 cheapest states are :

Washington 8.75
North Dakota 9.14
Idaho 9.55
West Virginia 9.56
Arkansas 9.75

And the 5 most expensive are :

Hawaii 38.08
Connecticut 19.87
New York 19.56
Alaska 19.03
Rhode Island 18.26

Electricity is cheap in the Northwest due to large hydroelectric power installations such as Grand Coulee Dam.     Hawaii and Alaska have expensive power due to their remote locations and having to rely more on fossil fuels to generate electricity.

Now since I've got the numbers from 2011 and the newer 2014 numbers we can compare the changes.    Based on a 3 year period the compound annual growth of rates for each state are :

Alabama 2%
Alaska 3%
Arizona 3%
Arkansas 3%
California -11%
Colorado 3%
Connecticut 3%
Delaware -2%
District of Columbia 0%
Florida 0%
Georgia 2%
Hawaii 5%
Idaho 7%
Illinois 0%
Indiana 4%
Iowa 4%
Kansas 6%
Kentucky 5%
Louisiana 4%
Maine 0%
Maryland 0%
Massachusetts 8%
Michigan 5%
Minnesota 3%
Mississippi 3%
Missouri 4%
Montana 2%
Nebraska 4%
Nevada 4%
New Hampshire 2%
New Jersey -1%
New Mexico 4%
New York 4%
North Carolina 4%
North Dakota 3%
Ohio 3%
Oklahoma 3%
Oregon 3%
Pennsylvania -1%
Rhode Island 4%
South Carolina 3%
South Dakota 5%
Tennessee 3%
Texas 2%
Utah 6%
Vermont 3%
Virginia 2%
Washington 2%
West Virginia 0%
Wisconsin 2%
Wyoming 5%

The largest increases:

Massachusetts 8%
Idaho 7%
Utah 6%
Kansas 6%
Michigan 5%

And the smallest increases (which are actually decreases) :

California -11%
Delaware -2%
New Jersey -1%
Pennsylvania -1%
Illinois -0.37%

So thats interesting that the rates dropped so much in California.    I haven't dug into that enough to find out why its down but I suspect its due to lower natural gas prices.   This report THE FUTURE OF ELECTRICITY PRICES IN CALIFORNIA points out that natural gas accounts for 60% of local CA electricity production and gas prices have been down in recent years.

June 22, 2014

5% Cash Back Promo Credit Card Categories for Q3 2014

Here are the different categories that my credit cards offer 5% cash back for this upcoming Q3 period (July to September):

Discover : Gas stations
Chase : Gas stations, Kohl's
Citicard : Hilton Portfolio, car rental agencies, movies and theme parks.

Nothing too exciting for me here.   Gas stations would be good but we already got the Sallie Mae card which gives 5% on gas stations normally.  

June 17, 2014

Money DOES Buy Happiness!

I'm still catching up at work.    So this is an extremely short article where I am mostly going to point to an article that someone else wrote.

Go read this : 

Money Buys Happiness, and Other Brief Lessons About Life Satisfaction in America

I want to point out that 3rd item they discuss and the last chart graphing happiness versus income groups.   It seems quite startling how obvious the relationship between money and happiness is in that chart.   Yet everyone always says that money doesn't buy happiness.  



June 13, 2014

Best of Blogs for Week of June 13th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Financial Uproar says Most Investing Advice Is Needlessly Complicated


June 12, 2014

Busy & on Vacation

Sorry for the lack of posts for the past couple days.   I've been busy with work and other things.   I'll probably not have any more posts of any substance for a few more days since I've got a little vacation coming up.


June 8, 2014

College Affordability is Dead (If you spend too much on college)

I get irritated when I see headlines that make declarations that are general and shocking such as : "The college affordability dream is dead for these students"
on the Yahoo homepage the article was linked under the alternate title "Working way through college barely possible now"

The article doesn't support the title statement at all as far as I'm concerned.   They give an anecdotal example of one student who had problems.   They say how it would take 5 years working at minimum wage to pay off average net tuition cost.   

I skim through the article and I run into this example that starts :
"Lucy Parks, 18, enrolled at New York University in 2012 ..."

OK hold it right there.    New York University?    Lets take a look at the cost to attend NYU.

Tuition & Fees   $45,138
Living Expenses  $24,000
Health Insurance  $3,439
Total $72,577

NYU is an expensive private university which also happens to be in one of the most expensive cities in the nation.   So you decide to spend over $70k a year on college and its not very affordable.   Wow!   I'm shocked!   

This is like saying cars are unaffordable and then talking about how the payments on your Mercedes CLS class are $1600 a month. 

I'll counter that NYU example with the University of West Virginia.    Lets look at their cost of attendance.

University Tuition and Fees $6,968
Room $4,956
Board (15 meal plan) $4,068
Total for the year $15,992

If you want affordable then buy affordable.   There are affordable colleges out there.

Local public colleges are a lot more affordable than private colleges or out of state colleges.   Tuition and room and board do vary of course and many state colleges run $20,000 to $25,000 a year.   But thats still greatly more affordable than going to an expensive  private school like NYU.    If your public colleges total cost is high then you can also live at home with your parents and commute to the local university.    That way you aren't spending room and board and that often cuts your total cost in half.   Of course your parents still have to feed you so its not free but you save on room cost and eating at home should be cheaper.  You can save even more by going to the local community college.

Yes I know that you may not be able to study at the best film school at your local junior college or state university.    But that doesn't mean college is not affordable.   If you set specific requirements on your university studies like limiting it to only schools that fit certain requirements then thats your choice.    You also definitely need to ensure that the career path you are following is going to pay for the college debts you'll incur.   If that film school degree is going to give you a high salary (it probably won't) then it can make sense to spend a lot to go to the best film school program.  

College can be affordable if people make an effort to chose an affordable college.

June 6, 2014

Best of Blogs for Week of June 6th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Save.Spend.Splurge. lists The 10 Golden Rules of Personal Finance

DoughRoller answer Reader Question: What Does Umbrella Insurance Cover?

June 5, 2014

So Hows that Gold Investment Doin?

Not very well.

Its been about a year since I talked about gold.  In June 2013 I pointed out Another Big Drop in Gold.
Which was a bit after I asked Is Golds Run Finally Coming to an End?

Yeah I think the bull run of gold is officially over.    2013 was a bad year for gold with the prices dropping nearly 30% for the year.     2014 hasn't been very good either and so far gold spot prices are virtually flat.

Here's GLD versus SPY for the past 12 months:

(click for full size, source: Yahoo.com)

Not pretty for gold.


June 3, 2014

Tiny Houses Are A Stupid Idea

I'm sorry but I can't hold my tongue on this topic any longer and I have to go on a rant.  

I think "Tiny Houses" are a really stupid idea.   

Oh look, its a tiny house!   How cute!    Lets rebel against consumerism and live in a tiny house.  It will be like playing house when we were kids but in a super duper cool clubhouse!   Instead of spending half a million on a McMansion that only lost 80% of its value back in '07 we can instead live in this a large sized walk in closet called a house.   All for the mere cost of $57,000!  


No no no.   

OK I get it.   Tiny Houses are cute.   Peoples houses are 'too big' because you know we live in America and every year the size of a new home goes up and we like big stuff and we need somewhere to store all our big stuff.   Americans spend too much on housing so cutting back makes sense.   So, the Tiny House is introduced and seems like a great idea to many.    In fact its not a bad idea per se.    Living in a smaller house is a good way to save money.   

Various reasons that Tiny Houses annoy me...

  • If Tiny Houses weren't cute they'd be called shacks.
  • Tiny Houses are way over priced.   When I see companies selling built houses they are much too expensive for what you get.    Or you see stories of someone who built it themselves for a more reasonable $10,000 level cost... with 100's of hours of labor and discount products, etc.  
  • Someone invented this idea a long time ago and they called it mobile homes.   Look into it.
  • You know you can buy a used trailer or RV for a mere fraction of the cost of a new Tiny House in most cases?   If you really wanna save money then live in a trailer.  Sorry the press won't cover your story about living in a van down by the river cause its not a cute Tiny House but you'll save a lot more money.
  • Where ya gonna put that Tiny House?   On someone elses land?   On your own buildable lot?   When housing is expensive the largest factor there is really the land.   If you've got free land to park a Tiny House on then you're getting subsidy from someone or mooching off free land.    What about zoning?   Does your city allow trailers parked on someone elses lawn?     If you've got a buildable lot to put a Tiny House on then you should just sell that valuable land.   The cost of the land that a Tiny House sits on is a huge factor in housing costs and is generally ignored entirely when touting the benefit of a Tiny House.   
  • Being Tiny doesn't really save much at all versus simply being small.   Seriously, why live in 200 sq ft when you can get 600 sq ft for a little more?
  • The whole concept is an extreme over reaction.    People go from over spending to living in a shack.   Why not just cut back in a reasonable manner?
  • Lastly, you know if you can't afford housing where you live then one option is to move somewhere more affordable.   I'm not saying the entire state of CA needs to pack up a U-haul and head off to Texas  here either.   But if you really can't afford to live where you are then there are cheaper places.


June 1, 2014

Inflation and Deflation in Consumer Goods

Whenever you hear about inflation you hear about prices going up for something like gasoline, food, college tuition or health care.   Rarely do we hear reports about the items where prices are going down.    But we have major categories of goods where prices do go down and have been on downward trends for some time.    The reality is that for goods a lot of prices go up but a lot also go down.   I think its interesting to see the trend for various products and note the items that have gone down or been flat rather than just focus on only the prices that go up.

Below are the price index graphs for 10 years from 2003 to 2013 for several categories of products.  All of these charts are straight off the BLS.gov site.    I got them by pulling data out of the BLS CPI site for the Department store inventory price index.

Mens Shoes

Infant wear and Furniture

Mens Clothing

Jewelry and silverware
Toilet articles and drugs

Furniture and bedding


Major appliances

Radios and television sets

Home improvements

Auto accessories


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