Think Your Way to Wealth » Psychology

Occam’s Razor, Simplicity, and Personal Finance

RC — Fri, 19 Feb 2010 05:05:14 +0000

Occam’s Razor is a rule of thumb or principle, that can be stated as follows:

That all things being equal, the simplest explanation or strategy is usually the best or correct one.

Another related quote sometimes attributed to Albert Einstein : Make everything as simple as possible, but not simpler. And then there is the KISS Principle, or “Keep it Simple, Stupid”.

For some reason, I think many of us are to quick to dismiss simplicity when it comes to personal finances and money management. Maybe we think that managing money and becoming wealthy is more complicated than it really needs to be. It can’t really be that simple, can it?

For example, I think there are a lot of personal finance truisms, that many of us are to quick to dismiss as being cliched, such as “spend less than you earn”. When we read or hear it, it is very easy to say or think that our own personal financial situation is more complicated than just spending less than we earn, isn’t it? But if everyone spent less than they earned, there would be a lot fewer people with money problems.

Simplifying your personal finances can go a long way to helping you live with less stress and worry. It can also help in eliminating distractions that keep us from reaching our financial goals.

One high interest savings account (or even a regular one) is enough to start building wealth, isn’t it? Do we really need 3 or 4 accounts, moving money around to get that extra 0.1% in interest for a month or two? When we are focus on things that make our finances more complex, what are we not spending time on? We could be making more money or spending less instead of juggling multiple accounts, credit cards, etc. I am not really picking on having multiple savings accounts or credit cards in particular, but just using that as one example.If you don’t have a problem with, and many people don’t, then it is likely not a distraction to you.

However, the fastest way to get wealthy is to make the gap between what you spend and what you earn as large as possible, for as long as possible. If that difference was 1 million dollars a year, for example, a lot of the things that you might worry about now regarding your finances might soon disappear. There might be new things to worry about, of course, but over time they would likely get less and less worrisome-at least when it come to money.

Are your finances simple and easy to deal with, or are they too complex? Do you to focus on the wrong things when it comes to building a secure financial future?

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Fixing Financial Leaks in Your Life

RC — Wed, 04 Nov 2009 05:15:00 +0000

Every so often, as I am standing at the bathroom sink early in the morning getting ready for work, I hear a familiar sound-

Drip, drip, drip, drip….

I know where it it coming from, it is the bathtub faucet. If my wife or I forget to turn the faucet fairly tight after giving the kids their baths the night before, the faucet will drip- (I usually blame it on my wife). There does not really appear to be anything wrong with the faucet, but if it is not tightened just enough, it will leak-just a little.

If either of us forgets to consciously turn the faucet off with a little extra effort, we have a leak, and often we don’t address it until the next day, because we didn’t realize it was happening.

Fixing and preventing “financial leaks” takes a conscious effort as well.

Not all leaks are created equal. They could just take a little thought, like my faucet. But they can be a symptom of a larger problem- something, like in the case of a leaky faucet, could require action on your part, even to the point of calling in a plumber to make a repair.

When it comes to your finances, leaks can cost a little over time (which can add up), or could be leading you down the path to bigger financial problems in the future.

Some causes of financial leaks include:

Forgetting- We all forget things, and sometimes we forget to take care of our finances as well. The results of forgetting things can cost a few pennies at times, but it can be big bucks sometimes as well. An extra couple of dollars for some service you forget to cancel, like premium channels can cost a few bucks a month (small leak), but if you forget to pay a credit card bill, you could end up paying hundreds of dollars (or more) in interest and penalties (large leak that can cause serious damage).

Procrastinating- Similar to forgetting things completely, putting things off until a more convenient time often means we never end up doing them. It is not always convenient to call up a customer service rep to cancel a service you have, or to drive across town to that bank branch with the account fees that are outrageous so you can close your account. But doing so can start saving you money right away.

Not consciously thinking of your money- Do you think about where your money is going on a regular basis, or how you are spending it? Doing so every once in a while can keep financial leaks from “draining” your hard earned cash.

How can you prevent and fix financial leaks in your life?

Stay alert/think consciously about your money- Pay attention to the signals around you. Are you frequently wondering where your money went, or didn’t realize how much you have spent over a period of time? Then it is time to start examining the areas you spend money, and looking for things that can be eliminated.

Write things down- Writing things down helps you “remember” when your mind forgets. Make a list, write down the things you need to do, what you need to take care of, or areas of your finances you want to re-examine so you don’t forget about them later.

Take action as quickly as possible- As soon as you identify a financial drain on your wallet that isn’t necessary, take action immediately to correct it. Cancel that extra overdraft protection on your checking account or that long distance plan you no longer use. If you put it off, chances are good it could be quite a while before you actually do what you know you need to do.

Are there any financial leaks in your life that you need to get rid of?

photo credit: Nicholas Smale

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Save Money by Practicing Moderation in Your Life

RC — Wed, 21 Oct 2009 10:57:09 +0000

Somewhere between living in a frivolous manner and grossly overspending and living a spartan, miserly lifestyle there is a happy medium.

That happy medium is sometimes called….. Doing things in Moderation.

Consuming or spending in moderation in certain areas of your life can be a great way to save money and spend less without feeling like you are sacrificing ” the living” of your life.

For some people, when they decide to cut back in certain areas, focusing on the longer term goals, such as financial freedom, living debt free, or having a comfortable retirement can be
inspiration enough to make the necessary cuts to their spending in order to start making progress towards those personal financial goals.

I would guess, however, that for many people, “changing the habits that got them into trouble in the first place” can be quite difficult.

I think this is why losing weight, quitting smoking, and exercising can be difficult for people to start and stick with.
Bad habits can be difficult to break and good habits can be difficult to start, when going from excess to nothing, or nothing to a regular, daily habit.

This where doing things in moderation comes in and can be quite powerful.

Do nothing to excess is an old Greek proverb that speaks volumes.

Cutting back on things such as:

Eating out
Socializing/drinking
Shopping
Energy consumption
Wasting time on nonproductive activities

and the list could go on and on- can all lead to living a better, less excessive lifestyle- with added benefits in the personal finance area as well.

The advantage of doing things in moderation or a gradual cutback is that you don’t have to give up something you enjoy completely, but can reap the benefits of spending less, eating less, or other unhealthy or un-wallet-friendly activities.

By consuming less, or limiting habits that cost money, you can still enjoy those things in your life, and don’t necessarily have to deal with the stress of cutting them out completely, if it makes you feel like you are depriving yourself of something.

Cutting back on services or activities that you enjoy, but aren’t quite ready to give up completely, can still reap positive benefits.

Do you enjoy eating out? Well do it less often instead of stopping completely.

Do you enjoy watching programs on cable television? Cut back on the number of premium services you receive.

You can definitely save money by cutting back or limiting these types of activities, while not feeling as if you are depriving yourself of something by doing them in moderation. Living a moderate lifestyle in many areas of your life can keep lifestyle inflation at bay as well.

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Don’t Wait on Someone Else or Some Future Event to Fix Your Finances

RC — Wed, 27 May 2009 02:32:56 +0000

As someone who has not exactly been the best money manager over my lifetime so far, I have come to believe in a simple principle.

No person, no entity, or no future event will help me solve my money problems.

Believing that, there leaves basically one person who can help me improve my finances.

Myself

Basically, if you want to improve your financial situation, you are going to have to do it yourself. (If you are married, then your spouse or partner can assist as well, but that is about it, in my opinion.)

The following people, entities, or events will not help you with your money problems or help fix your financial situation:

The Government- Even if you get a little more money in your paycheck, or an actual check from the government, the Stimulus Plan is not going to bail you out (unless you happen to be a very large bank). Nor will the new credit card rules save the day for you, either.

Your Family- While your family can be great and help you out in a pinch, relying on others to bail you out will not get your finances on the right track. In fact, it may encourage or enable your bad money habits.

A Windfall- How many lottery winners end up broke? Quite a few. Large sums of cash may not fix your finance, either, in the long run.

Promotion or Future Advancement- It’s easy to think that once you reach a certain level in your career, salary wise, things will be better. But like many people, you may incur additional, regular expenses as you get older as well. Things such as buying a house, having kids, and other regular expenses can contribute to lifestyle inflation.

Your future self- Your future self might make more money. You might even become better at managing money. But the truth is, unless you take the steps to manage your money better now, you will likely still have the same money problems you have now when you are making more money.

It is very easy to think that things will change in the future, or that “I’ll catch a break one day”, and your money problems will eventually disappear. The truth is that it is not very likely to happen, unless you take positive steps to make it happen.

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Do You Think Like A Rich Person?

RC — Tue, 17 Mar 2009 02:57:58 +0000

The following is a guest post from Trisha Wagner who writes at Destroy Debt.

If you are not wealthy you may have a distorted mental picture of wealthy people and how they live. Granted people who have achieved millionaire or beyond status are in a better position to enjoy the many perks in life that having money provides, however there are many wealthy people mingling among the rest of us commoners. What makes them different? How did they achieve financial success? Money is not the only thing that separates the wealthy from the middle class or poor. If you want to achieve real financial stability and build wealth you should ask yourself if you think like a rich person?

Do You Have The Discipline?

The media is largely responsible for bringing images into our lives each day portraying celebrities jetting off to sunny beaches or spending their day shopping and getting beauty treatments. Actors and musicians are not the only people in the world who are wealthy and for the average person building wealth will require significant discipline and sacrifice along the journey. If you waiting for your “big break” to find instant wealth you may find yourself waiting a long time.

Do You See The Big Picture?

In reality eighty percent of American millionaires are first generation millionaires, which means they did not receive an inheritance from which to grow their wealth. They live well below their means, do not drive the current model-year car and live in homes valued well below one million dollars. They are generally well educated and fastidious investors, investing on average twenty percent of their annual income. Most are self employed entrepreneurs or self employed professionals. In other words you do not have to be born rich to become rich. Living in a huge home, driving dozens of cars and wearing expensive clothes should not be the only indication of wealth. Many millionaires work over forty hours a week and look like the rest of us. What the choose to do with the money they make is the real difference between the classes.

Can You Look Long Term?

Amassing wealth for most people will not happen overnight. To get started you will have to think long-term about your financial life. This should include determining where you want to be (and how much you want to be worth) ten and twenty years from now. Don’t just think about it, or dream about it, instead write it down. In order to reach these goals you have to a clear idea of where you want to be and how you are going to get there. Successful people think of their long term goals and adjust their daily behavior to achieve them. This will involve overcoming the immediate gratification attitude which is common in our society. You will not get rich by spending every dollar you make or worse spending money (credit cards) that you have yet to make.

Trisha Wagner is a freelance writer for DestroyDebt.com, a debt community featuring debt forums. Trisha writes regularly on the topics of getting out of debt and personal finance.

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Avoid the Worry- Don’t Just Pay Bills on Time, Pay Them Early!

RC — Tue, 27 Jan 2009 12:41:28 +0000

Several years ago, I would NEVER pay my bills before the due date. Well, not much more than a day or two, if that much ahead of time. I always felt that paying bills early was like giving them use of my money ahead of time, and I certainly didn’t want to do that-I was smarter than that-and smarter than them, too!

One thing I could not get through my thick skull until recently was part of my problem was that for me, it was too easy to spend money in my checking account if it was there. If I had a bill that was due 10 days after I got paid, and I had money in my account, between the time I got paid and 10 days later, I never thought about that upcoming bill or bills.

In other words, if there was money in my checking account, it was “available” and it was very easy for me to spend it on other things, instead of the bills it was meant for.
I never got myself into too much trouble, but I did get a little behind on some of them and had to scramble to pay them when they were due.

As smart as many of us think we are (and I don’t claim to be that smart), it’s very easy to spend money if it is just sitting in your checking account. I finally realized that by paying my bills as soon as I got them, instead of on the due date, worked a lot better for me than waiting till the last minute.

It allowed me to stop worrying about bills, and I could spend what was left over, without wondering if I could afford it.

I don’t always pay them that early these days, but I am always looking ahead to what is coming up over the next few weeks so I know what needs to be paid out of each paycheck.

Creating a budget can help you manage your cash flow; and as long as you are paying yourself first as well(putting money into savings) it can also can help you avoid :

Living paycheck to paycheck
Paying late fees
Paying disconnect/reconnect fees for utilities or other services or installment payments
Getting hit with default interest rates on credit cards

It seems rather simple, but a lot of personal finance does, and a lot of people, but of course not everyone, still have trouble with it. I am not sure why that is, but I have a feeling it has to do with habits we have learned.

Do you pay your bills as soon as you get them, or try to get as close as possible to the due date to hold on to your money a little longer? Do you have a reason?

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Walking the Fine Line Between Being a Spender and a Saver

RC — Tue, 20 Jan 2009 12:26:54 +0000

Are you a Spender or a Saver?

Are you a reformed spender? Or are you somewhere in the middle?

I used to be a spender. I have always worked hard, but I always had something I wanted to buy before I even had the money saved up. This was probably the case from my teens until my late 20’s to early 30’s. Things kind of settled down as I got a little bit older, but I never really though consciously about my money and spending habits until the last year or so.

Why was I a spender?

I think personally, I got emotional satisfaction, at least short-term, from buying things. As I got older, relationships with my wife and kids (as well as the lack of free time, I believe!) led me to spend less, and I realized I wasn’t missing anything.

So how can you change from a spender to a saver, if you want to change your spending habits?

Track all of you spending

This means ALL of it. From $0.50 for a coke, to your most expensive monthly payments (probably a mortgage or rent, for example). Write everything down, and have your spouse do the same if you are married. Figuring out where your money is going can help you identify what you spend money on, and can help you make adjustments to your spending habits-and hopefully make changes.

Get support from family or friends

Let people know what you are doing. Again, if you are married, make sure your spouse is involved. It is much easier to change your spending habits if those around you know what you are doing. You don’t have to be ashamed that you are trying to spend less money, so don’t be afraid to tell people you are trying to spend less and save money.

Change your daily routine

Regular spending can often be tied to your daily routine. A stop off at the coffee shop on the way to work in the morning, or a stop at the mall or bookstore on the way home can often lead to regular spending.

Find alternatives for your time that don’t cost money

As I mentioned above, after I got married and had children, I had less time to actually spend money, and even to think about spending money. You don’t have to start a family, of course, to find things to fill up your free time though. There are tons of things you can do to keep yourself busy- find a new hobby (the cheaper the better!), spend more time with friends, even volunteer, or look for other activities that can fill your free time.

Stop hanging around with friends who spend

You don’t have to ditch your friends, but if you have people you go to lunch with every day, or a shopping buddy, don’t do the same activities (the ones that involve spending money) with them. Offer cheaper activities as an alternative when spending time together.

photo credit: Foxtongue

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Dealing With Techno-Lust- Avoiding Chasing the New or Latest Tech Gadgets

RC — Wed, 14 Jan 2009 12:55:49 +0000

Early last fall, I had my eye on a pretty nifty laptop computer. It was right after Hurricane Gustav, and I realized that evacuating for several days without internet access was not a good situation, for blogging, but especially for staying in touch with work and family members. I started saving up money shortly thereafter, and having never owned a laptop before, I ran across the Acer Aspire One Netbook and kind of became obsessed with it. I though the small size and form factor were really cool, and really had my sights set on it.

One problem was, even though I wanted it right away, I hadn’t saved up enough money for it. I had a couple of hundred dollars put aside, but it was running about $400 at the time. While that is not a lot of money for a laptop, I really didn’t want to buy one until I had saved up money for it.

Unfortunately (or fortunately) for me at the time, it was only available in very limited quantities at online retailers such as Amazon or Newegg. Apparently, they were getting very small shipments from the manufacturer, so it was going in and out of stock. I actually had one in the online shopping cart one night, but did not pull the trigger.

I eventually decided to wait, and saved up about $400 for my laptop purchase. But by the time I did, a few months later, I decided to go with a regular sized laptop, with a little more functionality for all around use-The Aspire One did not have a DVD burner, for example, but the one I bought did.

Why didn’t I give in and get the “cool” laptop I wanted?

I guess I finally realized, that although it was pretty slick, I really didn’t need it for the small size (although I do see how it could come in handy when traveling, etc.) I decided I should wait as well, and save up for one like I originally planned.

How you can avoid giving into temptation with the latest tech gadgets

Try to keep your emotions out of it- While I got to the point where I almost bought the aspire one netbook one night, I realized that I was becoming somewhat enamored with it because it seemed really cool (mostly due to the size, I guess), not because of what it could do for me. For me, a regular laptop probably made more sense. I wasn’t really thinking practically.

Create a cooling off period- Wait a few days, a week, or even a month. If you still want the item later, buy it, but give yourself some time to “cool off” your enthusiasm.

Look closely at alternatives- In my case, a regular laptop with a DVD would be more practical for using it for work, as well as for all-around use.

Stick with your plan- If you are saving up for something, to pay cash for it, for example, stick to your guns and wait. A whole lot of new electronics go down in price, often after just a few months-the aspire one netbook, for example, has dropped $30 in less than 6 months.

This was kind of a strange experience for me, because I am normally not that in to the latest tech gadgets or the like. On the other hand, my cell phone contract is up for renewal, and I really like the look of some of those new phones with the touch screens, and email and web capabilities-Uh-oh!

Do you ever find yourself “wanting” the latest technology because of how it looks or its features or capabilities? How do you deal with these situations?

photo credit: Desiii

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Debt Reduction or Debt Elimination- Do the Words You Use Make A Difference?

RC — Tue, 13 Jan 2009 12:22:12 +0000

If you’ve read Think Your Way To Wealth for any period of time, you’ve probably noticed that I use Debt Reduction and Debt Elimination fairly interchangeably. They both mean basically the same thing right?

Not really, and although I have thought about the difference for some time, I haven’t necessarily thought about it when I write about Debt Reduction or Debt Elimination. Now, I am not going to pull out Webster’s Dictionary here, but in my mind I find the following difference:

Reduction implies lowering the amount of something from a higher level to a lower level.

Elimination means getting rid of something completely.

There is definitely a difference there in meaning.

Debt Reduction= A Process

Debt Elimination= A Goal

So if I really think about it, I am trying to eliminate my credit card and other consumer debts. I am not really trying to reduce them. Unless you want to say I am trying to continually reduce them until they are zero, or completely gone.

Reduction is the process of getting to zero, or the way I am going to reach a state (or goal) of debt elimination.

As in ” I am going to keep reducing debt until my debt is eliminated”.

Does it Make a Difference Which Words You Use?

Possibly. If your goal is to eliminate your debt (knock it down to zero), and you are very clear that it is your goal, then it probably does not matter if you are calling the steps you are taking reduction or elimination. But if you are going through the motions of trying to reduce your debt, and eliminating it is not your goal, then you may need to evaluate what your ultimate goal is-and decide if debt elimination is your ultimate goal, or if you are just going through the steps of debt reduction. You may not be focusing on the ultimate goal enough. (Although I highly recommend debt elimination as your ultimate goal for consumer debt).

Any Thoughts?

Disclaimer: For the sake of not using the same word every time I write about “reducing my debts until they are totally eliminated”, I reserve the right to use either debt elimination and debt reduction as I see fit .

photo credit: alexbrn

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Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits

RC — Wed, 07 Jan 2009 11:50:05 +0000

Besides losing weight, getting your finances into shape is probably one of the most popular New Year’s Resolutions every year. But as with other resolutions, it is can be a pretty nebulous goal unless specifically defined.

Saying you want to make a change or do something is not the same as actually doing it. To make a resolution stick, you have to change the habits that got you to where you are. Just as overeating and a lack of exercise can contribute to your being overweight, not practicing good money habits can lead to financial problems or disaster.

Also, like the losing weight example, if you have a defined goal in mind, like lose 20 pounds, you are more likely to try to achieve that goal and stick to it. With your finances, a goal such as “pay off $10,000 credit card debt” is much more specific and actionable than just “reduce my debt”.

Make your resolutions specific goals

Instead of “save more money”, I will save $200 per month for a total of $2400 in 2009.

Instead of “reducing my debt” I will pay off an extra $50 per month above my minimum payments.

Instead of “paying off the car loan”, I will pay an extra $100 per month till the car is paid off.

And so on. Giving yourself specific goals, that you can take action with on a regular basis, can help you turn resolutions into habits.

Making your resolutions habits

Once you have a specific goal in mind, you can make that goal a habit. Where are you going to get that $100 a month to add to your regular car payment? Well, you could trim your expenses, by $100 a month, or earn more income. Breaking it down even further, it would be $25 a week, or $5 per weekday. Could you cut back on eating out at lunch and bring your lunch to work or cook at home more often so you don’t have to eat out? Could you work a few hours of overtime per week, or start a side business? Taking regular action (habits), and making the correct choices on a daily basis can help you reach your goal.

Tips for sticking with your newly developed habits:

Don’t over do it- Keep your goals reasonable. Trying to lose 50 lbs in a month, or pay off $5000 in two weeks might be a little to lofty.

Start small- Even a few minutes a day, or a few dollars a day can help you reach your goals.

Tell others- Let other people know what you are trying to do and why.

Track your progress- Keep track of how you are doing, and make adjustments if necessary.

Acknowledge your success-Reward yourself!- If you meet your monthly goals, reward yourself-just don’t over do it.

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Should You Try to Get Rich Quick or Just Get Rich Slowly?

RC — Thu, 04 Dec 2008 12:15:00 +0000

Apologies to JD Roth aside, I think most people would like to get rich quick, if there was a tried and true way to do it. But, while it works for some people, there really is no set road map to do it. Some people do it by starting a business or in real estate, others by quickly rising up the corporate ladder, or even winning the lottery comes to mind.

But to me, trying to get rich too quick has a few drawbacks that make it unattractive, such as:

Risk- In order to make money fast, through investing, real estate, or other methods, you have to be willing to bet big and take on a lot of risk. It has worked for some people, but, using real estate as an example, many, many people can get burned. Investing in risky stocks can have the same high upside potential, but you could risk losing everything you have invested. Is it worth it? I don’t really think so.

Damage to Relationships-Both personal and professional relationships can be damaged, often unrepairable, by spending too much time focusing on money or spending too much time working or at the office. How many divorces have been caused by one partner working too much and not really giving to the relationship? How many business relationships have been severed do to one person’s focus on money and personal gain to the detriment of the other party?

Stress-Working long hours, leading a sedentary lifestyle behind a corporate desk, not getting exercise, and bad eating habits, as well as the pressures of the corporate workplace, can all be a detriment to your health.

So, the way I see it, getting rich slowly is the way to go about it. Does that mean you don’t try to get ahead at work, increase your income, develop new income streams, or try to make more money? Of course not. But don’t let it have a negative effect on your health, relationships, and don’t take on too much risk trying to do it. I work more than 40 hours a week on a pretty regular basis, mostly to try to pay down my debt faster. But I have limits, and I try to stick to them.

What are your thoughts on chasing after the money? Should you try to do it quickly, or take it at a more leisurely pace? What other drawbacks to trying to get rich too quickly can you think of?

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Tipping- Developing a Tipping Policy You Are Comfortable With

RC — Thu, 20 Nov 2008 03:48:22 +0000

The subject of tipping always seems to bring up lots of different view points on who should get tips, how much, and what people think of tipping in general.

Ask 5 or 10 random people, and you will likely get a range of answers from “I don’t tip more than 10% because I am against the tipping system” to a “big” tipper who might tip “25% min. on a restaurant meal” and tip everyone else under the sun a few buck here and there.

Waiters and waitresses work hard, and at least in my state they are paid below minimum wage as their base salary. Therefore to me, not tipping in a restaurant is not an option. My wife waited tables for several years, so I know that wait staff work hard, and getting stiffed on a tip does not send a message to the restaurant, it only hurts your wait person.

But with the proliferation of tips jars on just about any counter that has space to fit one in a retail establishment, it boggles my brain when I get to the checkout counter and have to think “Should I tip this person? How much?” Sometimes I will throw my change in there, sometimes a dollar, but frequently I do not. I started thinking about my tipping habits, and this is what I generally follow, although not always down to the penny.

Sit down restaurant- In a sit down restaurant, I generally tip right about 20% as my baseline. I may adjust it slightly downward, or slightly upward, if the service is either poor or above average, respectively. I try not to take problems that could be the kitchen’s fault into account though, like taking longer than I think it should or part of my order being overcooked, for example. But if the server does not come by and check my drink, etc. I may round down slightly, but it is always at least 15%.

Casual Dining- Basically the same rules apply here-If I sit down and am waited on- even if it is at a counter in a diner-type place or a bar, I tip according to the rules above.

Take Out-While some may disagree, I usually tip when picking up take out, usually $1 to $2. Part of this may be because I frequent the same places, but I also feel like they took a little extra time to package up my order, throw in condiments, and napkins, etc.

Delivery- I pretty much only order pizza for delivery, and I usually tip around $3, maybe give or take the change. But over the last year or two, I know many pizza delivery places have started adding a $1 (or maybe even more) delivery fee onto every pizza. I have not reduced the amount I tip because of this, however.

Fast Food/Retail- Coffee shops, sandwich places (like Subway, Starbucks, etc.)- I don’t feel obligated to tip at places like this, although I occasionally will put a little money in a tip jar if I feel like I’m getting really good service. I don’t tip at McDonald’s, so why should I tip at Starbucks or Subway?

Buffets- While your waitperson does not actually bring you your food, they still may frequently visit your table, clearing off plates, refilling your drink, etc. I usually tip about 15% here.

Haircuts and other services- I get your usual generic man’s haircut, usually at a place like Super cuts or the like, which is about $12 I think now. I usually tip about $3, bringing my total up to $15.

How much do you tip in restaurants? Do you tip in retail establishments, like a coffee shop? What about haircuts and other services? Do you have a tipping policy in general?

Photo by Marcin Wichary

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