By now my list of âvital life skills we arenât taught in schoolâ is getting excessively long.
Along with mental health, financial literacy, networking, digital literacy, negotiation, consulting and physical health (after age 16), officially tipping is now on the list.
Tipping is something we arenât told to do rather expected.
After almost a decade of going out to eat alone with friends, no adults allowed, Iâve soon realized that people get very defensive around tipping and the ways around it.
Itâs a strange phenomenon. I believe itâs a nice and sincere gesture guests get to decide themselves upon the service provided yet others believe itâs a tough math equation that seems unnecessary.
If you need to brush up on your tipping techniques as you head back to normal life, hereâs a quick refresh.
PS. No one needs to know you read this. This is just between you and me.
Donât worry, we arenât the only ones who forgot how to tip.
101
As a college student, Iâve gone through my fair shrae of 101 classes. Economics to accounting, algebra principles to computer science. Iâm sick of them by now but tipping 101 is one you cannot bypass unless of course you donât want to enjoy the fruits of life and give back to your community through dining out.
Stuck at home all year we lost track of how to give away money because we were hoarding and managing our own so diligently. After taking a mini hiatus last week on vacation, it was the first time we ate in a restaurant in over a year! It felt truly amazing to simply look at each other across the table, no devices or buffet style set-up in site and instead tell the waitress what we want instead of forcing ourselves to cook another dreaded meal.
Yes we could have ordered takeout or done pick-up throughout the past year, but we cherished the experience and figured since 2020 was the year of cooking and baking, this was the time we could hone a skill we never got the chance to try as fellow New Yorkers who arenât made for the kitchen.
Over the past week on vacation, we had to eat out each night. A big change on our wallets and time from the pandemic where we were slaves to the stove.
That was a blessing and a curse.
We quickly noticed as many consumers are now feeling the effects of inflation to the gauged prices of lockdowns and restrictions all year, small businesses to restaurants needed to support themselves all this time so when they did reopen, boy did they reopen hard.
Hard on our wallets!
Each night we wanted to diversify our options for dinner and take full fledged advantage of vacation. We couldâve gone to Panera Bread each night but thought we should splurge after a fantastic year on our portfolios in the market. A continuing massive bull run of 10+ years since the Housing Crisis with the S&P 500 returning 13% ytd, building pent up savings, maxing out our Roth IRAs, getting into real estate and having too much time to invest in ourselves, we needed to celebrate.
We finally wanted to toast and enjoy life a little after our money worked very hard for us.
Although being born into an immigrant family itâs always been tough for me to spend in general as it tends to hurt since Iâm used to being a frugal minimalist, eventually I got the hang of it after the first appetizer.
Spending is therapy!
Since this was a prime spot for vacation by the water and fish is one of the main dishes and commodity that gets hit the hardest and skyrockets in price when inflation hits, dishes for dinner were naturally more expensive. On top of paying for an appetizer to share and a dessert, each night the bill cost around $100. Since we havenât been out in a while, we forget to remind ourselves that that isnât it! Tip comes last!
Although I do get anxious paying more than $20 per meal as a frugal student, I needed to remind myself this is what comes with an experience. Gauged prices, extra long wait times and money wasted so might as well enjoy it because it doesnât happen everyday.
Tricks of the Trade
The reason why people get so defensive around tipping is due to personalization. You tip based on experience yet I believe that tipping is necessary regardless of the outcome because restaurants need it more than ever during this time to support themselves.
Without tips, they barely get paid similarly to food delivery services. Without the service, tax and delivery charge, they would be loosing money and barely at breakeven even charging those fees!
Why you tip:
*Not just for the food*
-Service staff
-Rent
-Cooks/chefs
-Waitresses/Waiters
-Tech
-Napkins, Utensils
-Cleaning Staff
These are some of the most common fixed costs that go into your tip that add up quick.
So unless the food was disgusting, the waiter spilled a drink on your lap, the floors were slippery and you fell and broke your leg, provide a generous tip more than 5%+.
It isnât only the food!
Especially if that restaurant happened to be closed for the season due to covid when tourism and travel were put on hold, they need that tip to survive and recoup from all the lost profits. Stimulus wasnât enough.
Diners and consumers should have no problem paying a little extra and expect to be more generous in the next coming months as reopening takes effect.
When it comes to tipping, if you had a terrible horrendous experience such as:
-Hating the food
-The waitress/waiter got your order wrong
-Something wrong with food-too hot/cold/spicy, infested with bugs or hair, etc.
-Someone spilled it on you
Then you can give less but during these items, be aware that if that happens, tip should still be necessary. No one performs these actions out of intentional harm just by mistake.
My Rule
I learned this trick from my dad when I was a kid pretending to forge his signature and pay for the bill.
It was perfect timing at age 10 when I learned about percentages and decimals.
My strategies (2 Options):
1) Double the tax
2) Move the decimal to the left once on the total and double that
Ex. Tax: 8.87%-typical NYC price on a dish
Total: $80.36
Doubling the tax would be 16 then add it to 80 and the grand total would be $96
Or
Move the decimal to the left on the total then double it to 16 then add 80 to 16
I try to aim for 20% tip for every meal to be generous unless my birthday is thrown at the restaurant or I get a free meal. Then I spoil them for great service at 30%.
Economy Creeping
Tipping is not out of courtesy but necessity.
Workers at the restaurant unrelated to serving or preparing the meal deserve to be compensated as well. No one in America should be working 2â3 jobs to keep their family afloat working minimum wage. What is this? An emerging market 3rd world country? We have the richest people on Earth here and the have-nots trying to get by on dollars per day.
Keeping the restaurant safe and finding a table outdoors is already a challenge so thank the staff for it.
Tipping is the âmodern etiquette for better lifeâ and we ned to stop overthinking about tipping and start doing it!
Out of Hand
I really donât need to point this out but should for the 1%. On the other hand, if overtipping does turn into a problem, which I find rare but I guess an addiction for over-generous folks, realize just because itâs post-pandemic and we have pent up demand for getting out and wasting money to pay for any type of experience, doesnât mean we need to overtip everyone helping us.
After all, being too nice can harm your growth and we need to be cognizant of our own budget.
As a result, I suggest tipping at least 15% at all times with 18%-20% as the average.
20%+ goes for exceptional service and can be your first post-pandemic outing celebration.
Hold Your Horses
Most of us are reasonable and realistic with our spending which mainly includes 80% of the richest Americans who save the most which allows them to stay rich and if we were to spend more, it wouldnât be on others rather ourselves.
How selfish.
Yet that can be a good and bad thing. Bad because we waste too much on things we believe we need but really donât and good because we donât underestimate and assume that others arenât pitching in to help others as well.
Similarly with donations, there are millions of other wealthier donors/philanthropists that can contribute instead. Musk can donate a billion and it wonât affect his account since he makes that much in a day. Yes donations provide a warm feeling inside when you contribute, yet realize if you are living pay-check to pay-check with no emergency fund, in massive debt, have no discretionary income and giving away more than 10% of your income to charity, thatâs a problem.
You come first. Finance is selfish in a smart way.
Track Your Tips
Especially in cities where cooking is a pain and most residents eat out a couple times a week, tipping adds up fast and as you saw with my bill, it costs $16 for 1 nice dinner!
That could be several meals of food for 1!
As always before eating out and spending anything, assess your priorities, debt obligations and emergency fund. It would be disastrous if you realized you went into more debt because you tipped too much.
Eating out is pure entertainment and a choice. If you were less lazy, you could save more and eat in. Eating out is recommended for those with discretionary income.
Eating in is obviously cheaper to an extent but not always the best for your waistline as you tend to eat more at home snipping away at those leftovers 6 times after dessert with larger portion sizes when no one is looking.
Eating out a couple times a week with tips of 20% can surmount to thousands of dollars per year. Love your community but set constraints. Pitch in with everyone not just yourself.
Last Tip
The pandemic has caused some of us to forget how to socialize, practice people skills, street smarts and most importantly how to do math including myself.
If this sounds like you, donât be afraid to consult your friends and family on the rules of society and establishments on what is the appropriate amount to tip.
You donât have permanent brain damage, you just didnât practice for a while.
Thereâs never too much tip for the restaurant but there is too much for you.
Ask your peers, âwhat do people really tip here?â or on your neighborhood community site, âhow should I go about assessing if this tip is a good amount?â
Weâre all adjusting to our new spending habits. Itâs not just you. It all takes time and practice just like a new skill in school, hopefully one thatâs useful.Â
Now enjoy the experience and live a little!
You deserve it.