Tipping for Dummies
Tipping is a personal finance topic that does not get a lot of attention. In fact, most personal finance experts turn people into lousy tippers. After all, if you go out to eat 500,000 times, and you stiff the server for $2 each time, you will have $1 million and can retire at age 35 and eat canned peaches. Or something like that.
Heaven forbid you’re one of these people who relies on tips for your livelihood—you might have a different opinion.
I have seen some bad tipping. Like when a couple shows up to a restaurant with three kids under 5, and the kids just hammer the table, smearing food and snot and barf all over the place, and it takes 3 servers 20 minutes to get it all cleaned up, and they leave a $4 tip.
I have also seen 12 women go out for a sushi lunch, then ask for 12 separate checks, spend 15 minutes haggling over which spicy tuna roll belongs to whom, then everyone breaks out the 17% tip calculators to calculate the tip to the penny.
When my wife and I go out to our usual place for dinner, it comes out to $37. I throw down a fifty and leave. No fuss, no muss. They are always happy to see us.
Which is the point! Don’t you want people to be happy to see you, instead of sad to see you? It’s not even really a matter of getting better service. I take care of people I like. Usually they take care of me.
If I am at a restaurant—any restaurant—I give a 17% tip for bad service. Most of the time, I give 25%, but if it’s a restaurant I go to regularly, and I have a personal relationship with the server, I give 30-40%. When you tip 30-40%, you would be surprised how often things seem to fall off the bill.
In the event that your head just exploded, let’s break this down, shall we? Let’s say you go out to eat twice a week, so about 100 times a year. On a $50 bill, the difference between a 20% tip and a 30% tip is $5. 100 times a year comes out to $500.
You should not be going out to eat twice a week unless you have a household income of $160,000 a year, and if you do, you can afford an extra $500/year in tips.
Maybe this is just me being a cold-hearted investor, but I would much rather spend that $500 on tips than charity.
Without further ado, here is the Dillian guide to tipping:
Restaurants
Places you go once: 20-25%.
Places you go all the time: 30-40%.
Minimum tip, no matter how small the check is: $5.
Valets
Valets are usually young guys looking for some spending money in the summer. The job is harder than it looks. Minimum tip: $5. You’re trusting them with your car.
Uber
Never tip Uber. I tipped Uber once and the driver gave me a 1-star passenger rating. If Uber drivers don’t get paid enough, it’s Uber’s problem. The whole point of Uber is that it’s supposed to be cheaper than cabs.
Housekeeping
I throw $5 on the pillow. Sometimes I forget, and then I feel terrible.
Porter
The usual recommendation is $2-$3, but I have a tough time giving less than $5. $2 doesn’t really move the needle if you’re hauling bags 3-4 times an hour. Also, like the valet, it’s your bags. You want someone to take care of them.
Tip Jar (like at Dunkin Donuts)
Instead of tipping 35 cents each time, once a month I throw a $20 in there. Works out about the same, but gets a lot more attention, and service improves dramatically.
Pizza Delivery
$5 for a single pizza.
Airport Curbside Check-in
I don’t use these guys, but you’re crazy not to tip huge.
Taxis
I have motion sickness issues in cars. If I get there and I’m feeling okay, I tip 25%. If I get there and I’m ready to barf, I tip significantly less. Drivers who display anger issues while driving make me not want to tip at all.
Airport Shuttles
I have a tough time with this. Usually I’m wrangling my bags and it’s a hassle to get my wallet out to fumble around, fishing for a couple of bucks.
Bathroom Attendants
Always tip the bathroom attendants! It’s a gross job and nobody tips them. They really appreciate it when you do, even if it’s only $1.
Coat Check
Always tip, under the same principle as the valet and the porter.
DJ
Tip the DJ $50 or $100, even if you’re not happy. Most of the time, people aren’t happy. You do it anyway.
Hairstylist
Big. Really big. My haircuts cost $25 and I tip another $25 for a total of $50. If you have someone you like, take care of them. It is insanity to cheap out on a haircut.
Manicurist
You don’t want to get MRSA. Be generous.
Movers
Moving is the toughest job in the world. Buy them lunch, buy them Gatorade, and tip generously at the end. Maybe even tip at the beginning.
I am not a big believer in karma. I don’t tip because I think something good will happen to me in the future. I tip because I think something good will happen to me now!
And it’s good to take care of people you like. You have to stiff a lot of people to get to a million bucks. Don’t go that route. It’s not worth it.
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A quick reminder for Street Freak subscribers that today is the last day you can send in a question for our call. You can do so via the link in the email you’ll be getting from me today.
The call takes place on Tuesday, December 11 at 2:00pm ET. If you’re not free, send in a question anyway! You’ll be able to listen back to the call whenever you want.
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