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The Dos and Don’ts Of Holiday Tipping, According To An Etiquette Expert

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’Tis the season for giving. But how much? And to whom?

According to a recent Consumer Reports survey, 60 percent of respondents gave holiday tips to one or more service providers last year. The average tip was $45 ― up $5 from the prior year ― and housekeepers received the highest gratuities.

Even so, holiday tips aren’t necessarily expected. And your budget might not allow for a ton of extra spending around Christmas time.

We spoke with Heather Wiese-Alexander, an etiquette expert and founder of luxury stationer bell’INVITO, about who should get a holiday tip and how much you should give.

Holiday Tipping Etiquette

Wiese-Alexander said that when it comes to holiday tips, there are usually a couple of common concerns. One occurs when you have the cash available to be generous this holiday season, but you aren’t sure what tip amount is considered too little versus way too much. The other crops up when your budget is pretty tight and you need to know what the absolute musts are, as well as what you can skip.

“Be realistic about who you tip,” Wiese-Alexander said. “Who makes your life easier on a daily, weekly or monthly basis?” In other words, you don’t necessarily need to give a holiday tip to the stylist who trims your ends every six months. But your child’s nanny? Probably.

Holiday Tips Guide

Wiese-Alexander explained that as a general rule of thumb, an appropriate holiday tip is one week’s pay or one extra session, depending on the service. Gift cards can also be a solid choice, as long as they’re for a place the receiver actually frequents, such as Target or Starbucks. Below is a list of common service providers and the typical range tippers can expect to pay if they so choose:

Your doorman: If you live in a building with a doorman, you should base the tip on the value of your living space, according to Wiese-Alexander. Usually, that’s around $25-$100. “If you’re in a penthouse, go big or go home, so to speak. This person puts up with a lot more than you may realize.”

Maintenance workers: If you want to extend a tip to the maintenance workers in your building, office or home, a cash gift of $25 along with a hand-written note of appreciation goes a long way, said Wiese-Alexander. Someone like the building superintendent should get more: around $100-$200, taking into consideration the price of your home.

Outdoor help: For those who work on your lawn, garden or pool, a tip of $25-$50 is appropriate.

Janitorial service providers: Trash collectors and workplace janitors can receive $10-$20.

Gift wrappers, luggage porters and baggage handlers: Tip $1-$2 per person at minimum, up to $5 per person if you’re feeling generous.

Personal care providers: If you regularly visit a personal trainer, hairstylist, barber, nail technician, massage therapist or other one-on-one specialist, you should tip the value of one extra session.

Dry cleaners: “Here is where a gift card or homemade goods feels more thoughtful,” Wiese-Alexander said. Many are business owners, which are traditionally not tipped, so cash can seem impersonal.

Assistant: If you work with an assistant who’s gone above and beyond their day-to-day duties ― and they’re not already receiving a bonus ― a holiday tip of $50 minimum or up to a week’s pay is much appreciated.

Child care providers: “A personal gratitude moment here means the world to most people caring for your little ones,” Wiese-Alexander said. A tip of $50 to $75 per person is great. An added note of appreciation is even better.

Pet care: “Yes, they are children, too, but they usually don’t carry the same attitude or maintenance (unless they do—you know who you are),” Wiese-Alexander said. A $20 holiday tip is nice, while $50 is lovely.

Mail and package carriers: There are rules around what mail carriers can and can’t accept. Generally, they’re not allowed to accept cash tips or gifts worth more than $20. “Hand-written notes and goodies are perfect here … think warmth: maybe a hat, gloves, scarf or something thoughtful you baked,” Wiese-Alexander said.

Who Should Not Receive A Holiday Tip?

Before you get too generous, know that it’s inappropriate ― sometimes even illegal ― to tip certain people. Salaried professionals such as doctors, therapists, dentists and other medical care providers should not receive any cash. If you really want to show your appreciation, “edible goodies for the medical field are usually welcome. Notes are always appreciated,” Wiese-Alexander said.

The same goes for your your boss or supervisors. You should really avoid gifts of any kind. “Appreciation in the form of a hand-written note is most appropriate,” Wiese-Alexander said. “If you know of a thoughtful small token, feel free to give, but anything more can be perceived as sucking up.”

Tips Are Appreciated, But Not Expected

Admittedly, the difficulty in these types of general guidelines is that it’s hard to adjust for different financial situations. At the end of the day, you should tip relative to where you fall on the lifestyle meter, according to Wiese-Alexander. “It may be tougher on your mind, but it’s much easier on your wallet.”

Giving tips during the holidays isn’t about the money. It’s about showing appreciation for the people who provide you invaluable services throughout the year. Tips are appreciated, of course, but if you don’t want to spend a lot on holiday tips, “the simple gesture of writing a heartfelt note with a couple of genuinely personal references is pure gold,” she said.

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4 things kids need to know about money

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(NC) Responsible spending includes knowing the difference between wants and needs. Back-to-school season, with added expenses and expectations around spending, is the perfect time to not only build your own budget for the year ahead, but also to introduce your own children to the concept of budgeting.

The experts at Capital One break down four basic things that every child should know about money, along with tips for bringing real-life examples into the conversation.

What money is. There’s no need for a full economic lesson,but knowing that money can be exchanged for goods and services, and that the government backs its value, is a great start.
How to earn money. Once your child understands what money is, use this foundational knowledge to connect the concepts of money and work. Start with the simple concept that people go to work in exchange for an income, and explain how it may take time (and work) to save for that new pair of sneakers or backpack. This can help kids develop patience and alleviate the pressure to purchase new items right away that might not be in your budget.
The many ways to pay. While there is a myriad of methods to pay for something in today’s digital age, you can start by explaining the difference between cash, debit and credit. When teaching your kids about credit, real examples help. For instance, if your child insists on a grocery store treat, offer to buy it for them as long as they pay you back from their allowance in a timely manner. If you need a refresher, tools like Capital One’s Credit Keeper can help you better understand your own credit score and the importance of that score to overall financial health.
How to build and follow a budget. This is where earning, spending, saving and sharing all come together. Build a budget that is realistic based on your income and spending needs and take advantage of banking apps to keep tabs on your spending in real-time. Have your kids think about how they might split their allowance into saving, spending and giving back to help them better understand money management.

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20 Percent Of Americans In Relationships Are Committing Financial Infidelity

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Nearly 30 million Americans are hiding a checking, savings, or credit card account from their spouse or live in partner, according to a new survey from CreditCards.com. That’s roughly 1 in 5 that currently have a live in partner or a spouse.

Around 5 million people — or 3 percent — used to commit “financial infidelity,” but no longer do.

Of all the respondents, millennials were more likely than other age groups to hide financial information from their partner. While 15 percent of older generations hid accounts from their partner, 28 percent of millennials were financially dishonest.

Regionally, Americans living in the South and the West were more likely to financially “cheat” than those living in the Northeast and Midwest.

Insecurity about earning and spending could drive some of this infidelity, according to CreditCards.com industry analyst Ted Rossman.

When it comes to millennials, witnessing divorce could have caused those aged 18-37 to try and squirrel away from Rossman calls a “freedom fund”.

“They’ve got this safety net,” Rossman said. They’re asking: “What if this relationship doesn’t work out?”

As bad as physical infidelity

More than half (55 percent) of those surveyed believed that financial infidelity was just as bad as physically cheating. That’s including some 20 percent who believed that financially cheating was worse.

But despite this, most didn’t find this to be a deal breaker.

Over 80 percent surveyed said they would be upset, but wouldn’t end the relationship. Only 2 percent of those asked would end the relationship if they discovered their spouse or partner was hiding $5,000 or more in credit card debt. That number however is highest among those lower middle class households ($30,000-$49,999 income bracket): Nearly 10 percent would break things off as a result.

Roughly 15 percent said they wouldn’t care at all. Studies do show however that money troubles is the leading cause of stress in a relationship.

That’s why, Rossman says, it’s important to share that information with your partner.

“Talking about money with your spouse isn’t always easy, but it has to be done,” he said. “You can still maintain some privacy over your finances, and even keep separate accounts if you and your spouse agree, but you need to get on the same page regarding your general direction, otherwise your financial union is doomed to fail.”

With credit card rates hovering at an average of 19.24 percent APR, hiding financial information from a partner could be financially devastating.

But, Rossman adds, it’s not just about the economic impact but also the erosion of trust.

“More than the dollars and cents is that trust factor,” he said. “I think losing that trust is so hard to regain. That could be a long lasting wedge.”

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

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7 Examples Of Terrible Financial Advice We’ve Heard

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Between television, radio, the internet and well-meaning but presumptuous friends and family, we’re inundated with unsolicited advice on a daily basis. And when it comes to money, there’s a ton of terrible advice out there. Even so-called experts can lead us astray sometimes.

Have you been duped? Here are a few examples of the worst money advice advisers, bloggers and other personal finance pros have heard.

1. Carry a balance to increase your credit score.

Ben Luthi, a money and travel writer, said that a friend once told him that his mortgage loan officer advised him to carry a balance on his credit card in order to improve his credit score. In fact, the loan officer recommended keeping the balance at around 50 percent of his credit limit.

“This is the absolute worst financial advice I’ve ever heard for several reasons,” Luthi said. For one, carrying a credit card balance doesn’t have any effect on your credit at all. “What it does do is ensure that you pay a high interest rate on your balance every month, neutralizing any other benefits you might get from the card,” Luthi explained. “Also, keeping a 50 percent credit utilization is a surefire way to hurt your credit score, not help it.”

Some credit experts recommend keeping your balance below 30 percent of the card limit, but even that’s not a hard-and-fast rule. Keeping your balance as low as possible and paying the bill on time each month is how you improve your score.

2. Avoid credit cards ― period.

Credit cards can be a slippery slope for some people; overspending can lead to a cycle of debt that’s tough to escape.

But avoiding credit cards on principle, something personal finance gurus like Dave Ramsey push hard, robs you of all their potential benefits.

“Credit cards are a good tool for building credit and earning rewards,” explained personal finance writer Kim Porter. “Plus, there are lots of ways to avoid debt, like using the card only for monthly bills, paying off the card every month and tracking your spending.”

If you struggle with debt, a credit card is probably not for you. At least not right now. But if you are on top of your finances and want to leverage debt in a strategic way, a credit card can help you do just that.

3. The mortgage you’re approved for is what you can afford.

“The worst financial advice I hear is to buy as much house as you can afford,” said R.J. Weiss, a certified financial planner who founded the blog The Ways to Wealth. He explained that most lenders use the 28/36 rule to determine how much you can afford to borrow: Up to 28 percent of your monthly gross income can go toward your home, as long as the payments don’t exceed 36 percent of your total monthly debt payments. For example, if you had a credit card, student loan and car loan payment that together totaled $640 a month, your mortgage payment should be no more than $360 (36 percent of $1,000 in total debt payments).

“What homeowners don’t realize is this rule was invented by banks to maximize their bottom line ― not the homeowner’s financial well-being,” Weiss said. “Banks have figured out that this is the largest amount of debt one can take on with a reasonable chance of paying it back, even if that means you have to forego saving for retirement, college or short-term goals.”

4. An expensive house is worth it because of the tax write-off.

Scott Vance, owner of taxvanta.com, said a real estate agent told him when he was younger that it made sense to buy a more expensive house because he had the advantage of writing off the mortgage interest on his taxes.

But let’s stop and think about that for a moment. A deduction simply decreases your taxable income ― it’s not a dollar-for-dollar reduction of your tax bill. So committing to a larger mortgage payment to take a bigger tax deduction still means paying more in the long run. And if that high mortgage payment compromises your ability to keep up on other bills or save money, it’s definitely not worth it.

“Now, as a financial planner focusing on taxes, I see the folly in such advice,” he said, noting that he always advises his client to consider the source of advice before following it. ”Taking tax advice from a Realtor is … like taking medical procedure advice from your hairdresser.”

5. You need a six-month emergency fund.

One thing is true: You need an emergency fund. But when it comes to how much you should save in that fund, it’s different for each person. There’s no cookie-cutter answer that applies to everyone. And yet many experts claim that six months’ worth of expenses is exactly how much you should have socked away in a savings account.

“I work with a lot of Hollywood actors, and six months won’t cut it for these folks,” said Eric D. Matthews, CEO and wealth adviser at EDM Capital. “I also work with executives in the same industry where six months is overkill. You need to strike a balance for your work, industry and craft.”

If you have too little saved, a major financial blow can leave you in debt regardless. And if you set aside too much, you lose returns by leaving the money in a liquid, low-interest savings account. “The generic six months is a nice catch-all, but nowhere near the specific need of the individual’s unique situation… and aren’t we all unique?”

6. You should accept your entire student loan package.

Aside from a house, a college education is often one of the biggest purchases people make in their lifetimes. Often loans are needed to bridge the gap between college savings and that final tuition bill. But just because you’re offered a certain amount doesn’t mean you need to take it all.

“The worst financial advice I received was that I had to accept my entire student loan package and that I had no other options,” said Gina Zakaria, founder of The Frugal Convert. “It cost me a lot in student loan debt. Now I tell everyone that you never have to accept any part of a college financial package that you don’t want to accept.” There are always other options, she said.

7. Only invest in what you know.

Even the great Warren Buffett, considered by many to be the best investor of all time, gets it wrong sometimes. One of his most famous pieces of advice is to only invest in what you know, but that might not be the right guidance for the average investor.

In theory, it makes sense. After all, you don’t want to tie up your money in overly complicated investments you don’t understand. The problem is, most of us are not business experts, and it’s nearly impossible to have deep knowledge of hundreds of securities. “Diversification is key to a good portfolio, and investing in what you know leads to a very un-diversified portfolio,” said Britton Gregory, a certified financial planner and principal of Seaborn Financial. “Instead, invest in a well-diversified portfolio that includes many companies, even ones you’ve never heard of.”

That might mean enlisting the help of a professional, so make sure it’s one who has your best interests at heart.

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