Best of Blogs for Week of July 18th

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

Doughroller lists  9 Credit Cards That Offer Free Airline Companion Tickets
and they also share 3 Key Ratios to Evaluate Real Estate Investments (#1 is All You Really Need)

Financial Uproar discusses How I Saved $201.49 On Travel Insurance

BiggerPockets gave The 7 Dirty Truths about Landlording (Like it or Not!)



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Best of Blogs for Week of July 11th

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

MyMoneyBlog tells about Rewards Dining Programs and Avoiding Airline Miles Expiration Policies

DoughRoller gives his list of the Top 10 Best Cash Back Credit Cards of 2014
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How Common Is Natural Gas in Homes?

I saw someone on the internet talk about using natural gas as if every home must have it.   They seemed to take for granted that everyone would have gas service.   The home I grew up in only had electricity and had no access to natural gas or any other type of fuel (propane, fuel oil, etc).    It simply wasn't in the area.   The first home I built was the same deal, only electric.   My wifes home before we married (which is now a rental) is also all electric.   Both of those homes have natural gas available at the street but simply aren't hooked up.    Most places I've lived in my life were electricity only.   I think the dorms I lived in had steam heat boiler setup or something and I vaguely recall that a house I roomed in for a summer had gas.   So I'm on the other end of the perspective of not being very familiar with natural gas in homes.
 
How common are houses with only electricity?  How common is natural gas service really?

I previously talked about the form of heating in homes when I wrote What Do People Heat Their Homes With?  That mostly answers the question, but not exactly.   See you can actually have homes with gas service that don't have gas heat.   Its a minority of homes but a notable percent have gas but don't use gas heat.   I suppose its more common in warmer climates where heat isn't a big deal but they might like gas for cooking or such.

TO answer the question I pulled the data out of the 2011 American Housing Survey Table C-03-AH

The percent of homes with each type of fuel : 

Electricity	98.2%
Gas	67.5%
Fuel oil	8.3%
Others	3.1%

And homes with only electricity :

All electric units

29%

So the majority of homes at 67.5% do have natural gas but a sizable minority of homes 29% have only electricity.

Theres only a little difference between owner occupied and rental units.

Trivia bonus :  108 homes in the US have coal or coke fuel.   Yes ... coal.

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Is the Washington State GET Pre-paid Tuition a Good Deal?

UPDATE :   Washington state passed a law that reduced tuition for their public universities.   This impacted how GET works and the program has made some changes to adapt.    Currently though they are freezing new enrollments for a period "up to two years".    See the GET site for more information.    Because of these changes the information in the article below is not currently accurate.

I've been working on a series of articles discussing the prepaid tuition programs offered by several states.  Today I'll take a closer look at Washington state's prepaid plan called GET.

How does the plan function?
Washington state's prepaid college tuition plan is called Guaranteed Education Tuition GET.   The basic deal is that you pay now to buy a "unit" of education and then when your child attends college they get 1 unit worth of tuition.   A unit is worth 1% of a full years tuition at the most expensive public school in Washington, (which is currently University of Washington).   100 units would equal a full year of tuition.   You can use the equivalent amount of money at any university in Washington or out of state.   Right now it costs $172 to buy a unit and the payout is $117.82.    So basically you pay $172 today to get the value of 1% of a years tuition at U. Washington (or cash equivalent at another school) when your kid hits college age.

Is there a good return on investment?
If your child is fairly young then the plan can be an OK investment.   It does greatly depend on how fast tuition goes up in the future.   If you expect tuition to go up 2-3% faster than  other investment returns then the plan would work out for you.   Say for example if you expect tuition to go up 7% annually then you'd have to get better than 4-5% returns on your own to beat the prepaid plan.  Beating 5% isn't hard but it takes some risky investments whereas the GET plan is guaranteed.     So in this measure its an OK investment.   Nothing great but OK.

If your child is in their teens then it is unlikely that the plan would pay off.   For example if your child was 17 years old you'd be paying $17,200 for one years worth of tuition which currently costs $11,782.   Unless you think that U. of Washington tuition will go up over 46% next year then this is not a good buy.   In fact its unlikely that a child within 4 or 5 years of college would benefit financially.
 Bottom line :  It may be an OK investment for young children but for older children it does not pay out well versus investing on your own. 


Are there any state tax benefits?
Washington state has no income tax and there are no state level tax benefits for the plan.   Investment growth is not taxed at the federal level.

Can you use the funds anywhere?
Yes the plan money us usable at other schools.   From the GET FAQs :
You can use your GET units at nearly any public or private college, university or vocational school in the United States and at selected colleges in other countries. A college is eligible if it participates in federal financial aid programs through the U.S. Department of Education. For a list of participating schools, visit the Free Application for Federal Student Aid (FAFSA) Web site.

Is there a state guarantee?
Yes the plan funds are guaranteed by Washington state law.

Is it financially solid?
Yes the funding level is currently very good.   The 2013 annual report for GET says that the actuarial report determined the program is 94% currently funded  and on track to be fully funded by 2018.


Summary:   The plan is in good financial shape and guaranteed by state law.  It may be a good idea if your child is young, but the return would be poor if your child is in their teens.
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