A Rant About How Tipping Has Gotten Out Of Control

I’m in a feisty mood today. If you don’t want to hear a rant, please come back in a couple days when our next post is live. Otherwise, sit back and grab a bowl of popcorn and let me know how you feel about my rant in the comments at the end. I know you either think I’m right or wrong, and I want to hear your side too. On to the rant!

outrageous tipping Follow Me on Pinterest Tipping. Everyone has their own opinions about the practice. You normally don’t hear much arguing about it unless you’ve come across someone who believes that tipping should be optional (it isn’t and shouldn’t) or you think you should tip insane amounts to everyone and their mom.

So, what set me off about tipping? The other night I was at one of our favorite restaurants. It isn’t the cheapest place, but it’s on the beach so we expect to pay a bit more than a typical chain restaurant, but that’s OK. The shock came when we got our bill.

Restaurants Suggest Tipping Amounts

I’m sure you’ve caught on to the recent trend of restaurants printing suggested tips on the receipts. Generally they calculate how much your tip should be if you want to tip 15%, 18% of 20%. I think that’s fair, because that’s the range I normally tip in.

In my mind, I feel I should tip 15% if service is average, 18% if service is great and 20% if I didn’t have to think or ask about anything, such as needing a refill because my glass was empty. 15% for just doing the basics of your job seems pretty fair to me. After all, I’ve been a server before and know that some people tip even less than that!

Not All Suggested Tips Are Equal

This time we got our bill and saw three suggested tip amounts at the bottom, but something didn’t look right. The tips were called Good, Great and Excellent, which is in line with my normal tipping practices. However, they didn’t list the percentages associated with each category and that fact had me suspicious almost immediately.

I took out my phone and did some quick calculations and found out that Good was 18%, Great was 20% and Excellent was 22%. Who tips 22%? And why does this restaurant feel I need to tip 22%, not the standard 20%, for great service?

Before we get into the argument, let’s first discuss what I actually tipped. Needless to say, I didn’t tip 22%.  In fact, the service wasn’t that great either. It was decent, I’d call it OK, not even good. But, just so everyone doesn’t think I’m cheap and stiffed the guy, I tipped the server just a tiny bit less than 18% because it was a nice even round number. Now, let’s get to the fun part.

Why Do Servers Feel These Deserve Higher Percentages Now?

News flash. As waitstaff, you aren’t entitled to a tip if you don’t do a good job. It is part of your pay, but it is part of your pay for doing your job and doing it at least halfway decently. It is an incentive and you need to work for it.

I have no problem tipping the standard 15 to 20% for service that isn’t awful. In fact, I’ve only stiffed servers two or three times in my life and the stories from those encounters would shock most people. The problem is, servers these days keep thinking they need a larger and larger tip. 20% isn’t a great tip anymore it seems. In fact, I’ve heard servers complain if they don’t receive at least 20% for their tip. That’s absurd.

Why do servers think they deserve tips in excess of 20%? They say that things are getting more expensive and they need to make more money. Unfortunately, most servers aren’t smart enough to realize that as things get more expensive, the meals at their restaurants also get more expensive so they ARE already getting a bigger tip. After all, 20% of $20 is more than 20% of $10. Shocker, I know.

Tips For Servers That Want To Make More Money

I have a tip for servers who want to make more money in tips. Instead of continuing to work at the restaurant you’ve been working at for years, go out and get a better job that pays more. Do you genuinely like serving? That’s great! Keep with it, just find a way to increase the amount of your tables’ checks by selling them more food. That way, your 20% will be worth even more!

Want to know an even bigger secret that will make you more money? Instead of working at Applebee’s for the foreseeable future, try your best to increase your serving skills. Once you’re an excellent server, go get a job at a nicer, more expensive restaurant. The bills will be larger there and your tips will be too!

So, what’s your take on tipping? Do you think we should be tipping more than 20% on a regular basis these days? Has tipping gotten out of control? Or am I just cheap? Let me know down in the comments!

Picture by: ashafsk Text added by: Lance Cothern

Should You Use Budget Billing For Your Utilities?

utility budget billing Follow Me on Pinterest Have you ever heard of budget billing? I may be the only one, but I had never heard of budget billing until I saw it on my electric company’s website. Basically, budget billing smooths out your bills over a period, normally twelve months, so that you don’t have high bills in the summer (or winter) and low bills in the spring and fall. Instead, you have one steady bill that is occasionally adjusted if your 12 month average bill amount changes.

Initially, I thought that it was just a way for my electric company to charge me an extra fee for smoothing my payments. I figured they wouldn’t be offering a service that creates more work for them for free. On the surface, it looked like the electric company was offering a valuable service at no extra cost. It almost sounded too good to be true. So, I did some further investigation to see if I was missing anything. Here’s what I found out.

Budget Billing Really Is Free!

My electric company really does offer budget billing completely free! Now, I can’t say that all budget billing scenarios for all utility companies are free, so make sure you check with your particular company. However, after a bit more thought it does make sense why utility companies would offer this service for free.

According to a 2011 survey by the National Foundation for Credit Counseling 64% of Americans didn’t have enough cash on hand to cover a $1,000 emergency. Hopefully you have an emergency fund of at least $1,000, but clearly most Americans don’t even have that! So what does this have to do with utility bills? If someone can’t come up with $1,000 in a pinch, what makes you think people can handle an unexpectedly high power bill for a hot summer month of air conditioning or a freezing cold month in Minnesota?

Budget billing helps these people smooth out their utility bills so they know how much money to expect to pay every month. This helps the utility company out because it means there is a higher chance of people paying their bills on time. Utility companies can spend less time chasing people trying to collect money. Utilities can quit wasting time turning customers’ utilities off which saves them money as well. It benefits both the utility companies and the customers to offer this service.

How Does Budget Billing Work?

My utility company monitors my twelve month rolling average bill and as long as the average doesn’t vary drastically, they keep my bill the same. Whenever they need to make a change, either up or down, they let me know a month in advance so I can prepare for the change. If I ever need to close my account, I’ll either have to pay the small amount I may owe the company due to monthly variation or the electric company will send me a check for what they owe me.

Is Budget Billing A Good Option For You?

I’ve thought about budget billing for a while because I was determined there was a catch, but I simply can’t find it. I don’t see any huge reasons why anyone wouldn’t like budget billing. It smooths out your bills so that you know what to expect every month. There aren’t any surprises during high use months which is great. Even though I can pay my bill every month no matter how high it is (within reason) I think I’ll give budget billing a try so I don’t have to wonder what my bill will be each month.

There were only three small negatives I could think of. If I quit making payments my utility company can kick me off of the budget billing program. In fact, they can end it for any reason they like. I’ll always make my payments, so this isn’t a big deal for me.

The second small negative is that I may no longer pay as much attention to how much electricity I use. Right now, I check our online portal a couple times a month to monitor our usage to see how big our bill is so far. If I quit paying all attention to my bills, I do see how my bill could creep up, but I always read all of my bills in full every month.

Finally, if I reduce my usage I may end up overpaying my electric company for a few months. I’d essentially be giving them an interest free loan, but it’d be on a very small amount of money that wouldn’t make a big difference to me. In the end, it will all balance out.

Overall, I think budget billing is a great option if it is free. Do you use budget billing? Is it even an option for you? I want to know about your thoughts on budget billing!

Picture by: AnthonyStoro Text added by: Lance Cothern

Improve Your Finances By Freeing Your Mind

Improve Finances Freeing Mind Follow Me on Pinterest

My Motorcycle

Do you have something on your to do list that has been bugging you for weeks, months or years? I have and it has slowly driven me crazy over the last two years. I thought I had put it out of my mind, but there was a small part of me that always knew the item hadn’t been crossed off of my to do list. I recently marked that item off of my to do list and my mind feels a little freer with one less thing to occupy my thoughts.

How Does Freeing Your Mind Help Your Finances?

Freeing your mind can help your finances tremendously! You only have a finite amount of willpower each day. As you go throughout each day, your willpower decreases as you use it up. These little nagging to do items can really suck up that willpower without you even realizing it!

If you had just a little more willpower, you might be able to save just a little bit more or spend just a little bit less. Then, as you add that up, day after day, you can save a bunch of money over a year!

So what was this thing that was bugging me and how has it freed up my willpower?

I’ve Wanted To Fix Or Sell My Motorcycle For Years

About two years ago, my motorcycle blew over and was damaged beyond what my limited mechanical skills could fix. I tried for a couple months to fix it myself, but I just couldn’t do it. My next thought was I’d take it to a motorcycle repair shop to get it running again, but my wife had multiple foot surgeries and wouldn’t be able to ride with me. Part of me couldn’t handle the fact that I thought a repair shop would over charge me, too. So I didn’t get it fixed.

Instead the motorcycle sat, first in my driveway at my old house and recently in my garage in our new home. If you know anything about motorcycles, you know never to let them sit because they’ll slowly degrade and need a ton of work to get running again. Two years later, it still sat in my garage and it still didn’t run. However, over the last month I finally took some action to resolve the issue.

I posted some pictures on a motorcycle forum to get a value of the motorcycle in the condition it was in. Once I had that information, I added a couple hundred bucks and listed it on craigslist for sale. Within 36 hours the motorcycle was sold for the top end of the range my motorcycle forum friends suggested! That was way easier than I had built it up to be in my head.

Determined To Get More Nagging Things Done!

Now that I’ve finally sold my motorcycle, I feel determined to get even more nagging items off of my to do list! I don’t want to worry about these silly things that can be taken care of with just a little effort. Next up is getting my wife’s motorcycle fixed at a shop so we can sell that, too! Once that’s done, hopefully I can work on finishing some of the more mundane tasks around our house.

You can do the same thing and free up willpower by knocking nagging items off of your to do list. Hopefully the boost in willpower will help your finances out too!

Do you have any nagging items on your to do list that is sucking up your willpower? Has it led you to make any bad financial decisions?

Don’t Buy Cheap Items When You Can Buy Items For Life

Today’s post is by Adam Kamerer. Read more about him after the post. 

Buy It For Life Follow Me on Pinterest Is it frugal to buy a $100 backpack if a $20 backpack is available? Most people would probably say no. But what if that $100 backpack lasted for 30 years? What if the $20 backpack was lucky to survive three?

Today, I’m talking about “Buy It For Life” items. Don’t take that term as a literal — nothing lasts forever. But some products are so well-made or come with such great guarantees that you can reasonably expect to buy one of them and never need to buy another one. Others still need replacing, but only rarely — sometimes after a decade or more of use.

In Terry Pratchett’s book Men at Arms, the character Samuel Vimes has a particular view on topic:

Take boots, for example. [Vimes] earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

What Is Buy-It-For-Life Quality?

A BIFL item is an item that is made with high-quality methods and materials to ensure that the product will last for a very long time, often longer than the average lifespan for a product of its type.

Until recently, I bought my jeans at Wal-mart for about $15 each. I wear jeans every day, so they get put through a lot of abuse. Within six months to a year, my Wal-mart jeans have usually started to fade, and two major failures start to show — the crotch wears thin and eventually tears, and I wear holes in the thin material of the pockets.

The last time I bought jeans, I bought a pair from Duluth Trading Co. that cost about $45. As soon as I opened the package, I could tell these jeans were much higher quality than my old Wal-mart jeans: the seams were triple stitched, the crotch came reinforced with extra fabric, and the pockets were made of a thick, durable material that I’d be hard-pressed to cut through with a knife.

To be worth it, my jeans from Duluth Trading Co. need to last three times longer than the cheap jeans I’ve been buying at Wal-mart, but I have no doubt that they will. And here’s the fun part — even if they don’t, I can return them for a free refund or replacement. Enter the lifetime guarantee.

The Lifetime Guarantee

Some companies, like L.L. Bean, Duluth Trading Co., Jansport, and Darn Tough Socks, offer a lifetime guarantee. If your product ever breaks, wears down, or fails, you can return it, and they’ll repair or replace it. It doesn’t matter if you bought the product 15 years ago — that’s where the term “lifetime” comes in. In many cases, you won’t even need proof of purchase.

Be sure to read these guarantees carefully. Many of them are pretty simple — if you’re ever dissatisfied, return the product — but some do have the occasional exclusion or caveat. In some cases, you may be required to pay shipping. Also beware of companies who claim a “lifetime” guarantee, but saddle that guarantee with so many exclusions and restrictions that it’s really just hype. What you want is the true lifetime guarantee — full refund, anytime, for any reason.

And of course, a lifetime guarantee is only as good as the company that offers it. A company like L.L. Bean that has been in business for over a hundred years isn’t likely to vanish overnight; a lifetime guarantee from a brand new startup that might not exist 5 years from now isn’t worth quite as much.

Some Items Will Never Be Buy It For Life

Some items, by their nature, will never be truly BIFL. Even the best made clothes will wear out if worn daily. Electronics are so sensitive that they will eventually succumb to wear and tear (and even if they don’t, they’ll become obsolete as technology progresses). Pillows and mattresses accumulate contaminants as part of their daily use and should be replaced regularly.

Anything will moving parts will eventually fail. That said, even among items that you can expect to replace, there are products that are built with quality and durability in mind.

How Can I Tell If A Product Is Buy It For Life?

Start by doing some research. Find out what materials and methods are the best quality for the type of product you want to buy. If you’re going to buy an electric beard trimmer, learn the difference between motor types: rotary, pivot, and magnetic. If you’re going to buy a leather backpack, learn the difference between full grain leather, top grain leather, genuine leather, and bonded leather.

Once you find a product that exhibits the materials and methods you want, check out the company. How long have they been in business? What’s their guarantee like? Read some reviews — not just about the product, but about the company and their customer service. When in doubt, ask around at /r/buyitforlife, a Reddit community focused on BIFL products.

Finally, do the math. An expensive high-quality item is only worth if it ends up being cheaper in the long run than buying several iterations of a cheaper item. Don’t forget to look for deals and sales!

Expensive Doesn’t Necessarily Mean Quality

Don’t assume something is high-quality or BIFL simply because it’s pricy. Expensive doesn’t say anything about a product except its price tag. There are hundreds of companies that produce expensive luxury goods that are shoddily made and only command high prices because they’ve been effectively marketed to people with too much money to spend. Do the research!

Quality Doesn’t Necessarily Mean Expensive!

While many BIFL products are more expensive than poorly-made counterparts, this isn’t always true — or if it is, it’s not true by as much as you’d expect. Take beard trimmers, for example.

A cheap off-brand electric trimmer can be found for about $25. With regular use, it might last a year or two. For $10 more, though, you can buy a trimmer by Wahl, a company that frequently makes products for professional barbers. My last Wahl trimmer lasted for 12 years before it developed a short. With a little technical know-how, I probably could have repaired it and it would have worked for another 5-6 at least, but I opted to replace it because I wanted a model with a cord instead of a battery.

The Heirloom

Some items are so well made, they aren’t so much Buy-It-For-Life as Buy-It-For-Lifetimes.  Your grandmother’s cast iron skillet. A Hudson Bay point blanket. Your grandfather’s straight razor. Believe it or not, some of these items are still produced and are still available today. Properly cared for, they’re the types of items you could actually pass down to your own children.

Old cast iron cookware and quality straight razors can actually sometimes be found at thrift stores. They may require some elbow grease to recondition, but with a little luck and some work, you can buy a lifetime product for as cheap as a few dollars.

Do you own anything that you think is a BIFL item? What is it? Tell us in the comments!

Adam Kamerer wants to help you find solutions for money-related anxiety and financial uncertainty. Read more at his blog, Stop Worrying About Money. You can also connect with him on Twitter or Facebook.

Photo by: Jake Sutton Text added by: Lance Cothern

5 Ways To Protect Your Hard Earned Money

Protect Your Money Follow Me on Pinterest We all work hard for our incomes, and there’s nothing worse than wasting money or having to pay hidden fees! Below I’ve included 5 things that I do regularly to protect my own money, and hopefully they will help you too!

1. Check Your Credit Report 3x a Year

I don’t know why I didn’t think of this before, but one of my readers told me that she checks her credit score three times a year. I always checked all three reports from the reporting agencies at the beginning of each year, just to make sure nothing was awry. However, spacing it out and checking just one of them every 3-4 months means that you can check your identity all year round!

2. Change Passwords Often

Even though my passwords should be relatively safe, I always change them often. I also try to avoid logging on to too many important sites when I am in a public place, like a coffee shop, because someone could have super ninja spy tools to see my information. Maybe it sounds paranoid, but it’s unfortunately not outside of the realm of possibility.

Lance’s Two Cents: Another great password tip is to never use the same password in more than one place.

3. Have Multiple Bank Accounts

Over 8 years ago, my family and I went through a really, really hard time when Hurricane Katrina devastated our home. It’s amazing how much destruction a natural disaster can inflict on an area and for such a long time too. My parents had a local bank and a nationwide bank. They couldn’t access their funds from the local bank for weeks. All of the little small town offices were flooded, and no one was going to work. Luckily, they had credit cards and other ways to get cash, but they would have been out of luck had they only banked locally. For that reason, I spread out my accounts to many different carriers.

4. Add to Your Investments

One way to protect your money now and in the future is to continually add to your investments. One time purchases or just leaving cash in your IRA instead of taking the extra step to invest it can definitely affect your long term savings goals. You should also monitor it to make sure the funds you chose are working well for you and helping you grow wealth. Don’t set it and forget it. Your future is too important.

5. Avoid Fees

Another way to protect your money is to always be aware of fees and useless add ons. You can avoid these by asking lots of questions when you open an account and bluntly asking whoever is helping you if there are any extra fees or terms you should be aware of before doing business with them. If you happen to see an extra fee on a bill, don’t be afraid to call and ask about it. I do it all the time!

Ultimately, there are many ways to protect your hard earned cash. With a little bit of vigilance and some smart savings techniques, you can do your best to ensure that your money will be safe now and into the future.

What am I missing? What are some other ways to protect your money?

Photo by: Anonymous Account Text added by: Lance Cothern