A Tipping Guide To Feel Good, Not Guilty About Spending Money

In this post, I'd like to offer a tipping guide so you can feel good about spending money. My tipping guide not only shares how much money I think you should tip, but why.

Once upon a time, tipping was a voluntary act to reward good service. Today, however, tipping culture is out of control. Not only are consumers always expected to tip, but the standard tipping percentage has increased by at least 5% over the past several years.

I get it. Working a service job is hard work. I used to work at McDonald's for $4 an hour grilling burgers in front of a hot stove while my manager yelled at me for not cooking fast enough. I would have loved to have gotten an occasional tip.

However, as consumers, we shouldn't have to feel guilty for not tipping or not tipping as much every time we buy something in person. Business owners don't want their customers to feel bad either as unhappy customers are bad for business!

Tipping Guide Philosophy: Why We Shouldn't Feel Bad About Not Tipping Or Not Tipping As Much

A core part of my tipping guide is to make you realize not tipping or not tipping as much doesn't make you a bad person. The collective guilt we feel about not tipping or not tipping as much is a problem. So let me offer two reasons to feel better about your tipping habits.

1) You're already helping a business make money

Even if you are the stingiest person on Earth who isn't willing to tip a single dollar, you're still contributing to the well-being of the business you're patronizing. You should feel great about supporting a business make a profit!

For example, you could take a bus to the show, but you decide to take an Uber instead. Even if you don't tip, the driver and the company still get paid. Both would rather you take Uber for every trip and not tip than have you save the environment by taking public transportation.

In another example, let's say you decide to tip your waiter $8 after a wonderful meal for two that cost $80. Although your waiter will likely feel disappointed, most restaurants have a tip-sharing system where the total amount of tips gets divided by the wait staff, cooks, and bussers.

In addition, some restaurants already embed various service charges into the final bill. Watch out for those. In a Pew Research report, 72% of Americans oppose automatic service charges. Both the waiter and the restaurant owner would rather have you eating with them than eating elsewhere.

2) You're better securing your financial future

The money you spend tipping is money that's not going into your savings or investing account. Unless your net worth is far above the median, the money you spend tipping could have been better spent securing your financial future.

If you have children, a partner, elderly parents, and other dependents, all the more reason to save money on tips so you can take care of your loved ones instead. The more secure your finances, the less you will have to depend on the government, your parents, or others to support you. What a gift to society!

Three Examples Where It's OK Not To Tip Or Not Tip As Much

Now that you're feeling better about not tipping or not tipping as much based on my tipping guide, here are three examples where it's OK not to tip at all.

1) At a point of sale reader where no service is rendered. 

Let's say you go to the mall and buy a pre-made pastry displayed on the front counter. The clerk uses a tong to place the pastry in a brown bag, punches the cost in the electronic kiosk, and whips it around for your payment.

You see default tip options of 15%, 20%, 25%, or No Tip. Feel free to smash that No Tip button! Unless the clerk lifts your spirits every morning or adds some extra sprinkles, don't feel bad about not tipping.

2) Picking up a to-go item from a restaurant

One of the more awkward tipping situations is when you get to the restaurant before your to-go order is ready. As you're sitting or standing around waiting, you might make some small chat with the maitre-de, clerk, or bartender. When the bill finally comes, there's a standard-looking check with the word “Tip” underneath the total. What do you do?

Feel free to write a horizontal line in the tip box and write the total of the bill at the bottom without a tip. Given no service was rendered, no tip needs to be paid. You shouldn't have to tip a restaurant employee for just smiling and saying ‘hi' to you.

Now if you get to the restaurant early and the bartender welcomes you to sit down, pours you a glass of lemon water, and serves you a side of bread and butter, a small tip is probably in order. But even if you don't tip, don't sweat it. You were only there for a moment and the reason why you're waiting is probably because the restaurant was slow.

3) Paying a tradesperson to fix something in your home

Finally, when a tradesperson like a plumber, electrician, contractor, or handyman comes to your house to fix something, even though they are providing a service, you don't have to tip. Such tradespeople often charge a minimum visitation fee and an hourly rate. Depending on where you live, the hourly fee can be in the hundreds of dollars.

When they provide you the bill, there is no line item for where to tip either. It also can be awkward for both parties to exchange cash in terms of a tip.

Of course, if your plumber successfully fixes a leak that has bothered you for years, feel free to tip as much as you want!

A Tipping Guide To Help You Feel Great About Spending Money

My general rule is to tip people who provide a service. The more I appreciate the service, the more I will tip. I have no problem leaving 0% tip to someone who provides poor service, is insulting, or makes me feel like a second-class citizen.

Here are some tipping percentages to consider:

0% – For terrible service that also makes you feel terrible or when no service is rendered

10% – OK service, but below normal standards (long wait, forgot an order, etc.)

15% – Baseline (good service, nothing out of the ordinary)

20% – Great service where the service provider and/or establishment also made you feel good for coming

25% – Outstanding service where the person or establishment went above and beyond (customized a special cake for your birthday, fit you in at the last minute, comped a drink or a dish, etc.)

30%+ – When a favorite establishment has fallen on hard times or has been vandalized or burglarized

If you follow this tipping guide, you will feel much better about spending money and much less guilty that you didn't tip enough.

The Best Alternatives To Tipping

If you just can't afford to tip or tip as much as expected, refer the person or business to others. The more people you can refer to the business, the better.

The final money-free way to help a business is to leave a review online. The more glowing the review, the more business the person or establishment should receive. The best places to review a business or person is on Yelp, Google Reviews, or TrustPilot.

I'm Always Thankful For Reviews

As a creator who wrote the WSJ bestselling personal finance book, Buy This Not That, I love receiving reviews on Amazon. And as the host and creative of The Financial Samurai podcast, I love receiving reviews on Apple and Spotify.

Any time a reader or listener leaves a review, I get motivated to write and record more. I'm also much more motivated to respond to questions when help or advice is needed.

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A Tipping Guide To Feel Good About Spending Money is a Financial Samurai original post.