Please email me at:
![Jason [at] LiveRealNow [dot] net](https://liverealnow.net/wp-content/uploads/2010/11/email.jpg "Jason [at] LiveRealNow [dot] net"){kind=small}
Or use the form below.
[contact-form 1 “Contact form 1”]
How Much Should You Tip?
- Image by cemre via Flickr
This post from CNN Money has been making the rounds. I’m getting into the game today.
With the holiday season upon us, tipping the people you work with is a tradition in some cases and actually expected in others. Here’s what CNN came up with and my take:
- Housekeeper. We don’t have one. I’d think $75-100 would make a nice tip/Christmas bonus. I seem to be more generous than average with my imaginary maid. Maybe that’s because of the outfits she wears.
- Gardener. Once again, we don’t have one. Even if we did, I live in Minnesota and have close to a foot of snow over the patch of weeds I call my garden. If I did have a gardener, I wouldn’t have seen him for a few months by now, anyway. $0!
- Mail carrier. I’ve only met my mail man a dozen times and I’ve never considered giving him a Christmas present. Do people really do that?
- Barber. I don’t have one any more. My wife has started doing my hair for me. When I did, I tipped about 25%, but again, I wouldn’t think about a Christmas present. I only saw him quarterly. I don’t think my wife has a regular stylist either. She’s just got a shop she goes to and gets whoever is available. Is there holiday tipping protocol for that?
- Garbage collector. No way. Really? I don’t know that I’ve seen the same guy twice. Am I supposed to give a present to the anonymous, interchangeable union guy that drives past my house every Friday?
- Newspaper carrier. One night, twelve years ago, while my wife was still working graveyard shifts, she had a hard time sleeping on her nights off. That’s natural for 3rd shift workers. At about 4AM, she was watching TV and saw someone run past the window. Scared, she came to wake me up. I handed her the phone to call the police, while I grabbed the only thing I had for self-defense and went to investigate. I ran out on the front step–in my boxers, carrying a sword–and saw someone lurking in the neighbor’s yard across the street. I yelled, “Y0u don’t belong here!” only to hear “I’m delivering the paper!” That’s when I start tipping the newspaper carrier. I stopped when we canceled our subscription a few years later. Who needs a dead tree in the morning, when there are a million news sites on the internet?
If the majority of people are giving Christmas bonuses to that many people, and are as generous as the article suggests, then I fall far to the loutish end of the bell curve. I am planning to give my virtual assistant 1/12 of the pay he’s earned this year, so that should make up for some of it, but that is an ongoing business relationship.
How do you compare when it comes to holiday tipping?
Budget Lesson, Part 1
budget” width=”300″ height=”185″ />Over the next few weeks, I will be going over my budget in detail.
The first section is income, but that’s straightforward. A line for each income source, bi-weekly, monthly and annual totals. Simple.
Before we start, a word on the organization. There are five columns:
- Category – This is the description of the line item.
- Cost – How much do you pay for this item?
- Time – What is the frequency of the payment? Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
- Monthly – Cost and Time are combined to calculate the monthly expense, to make it possibly to budget. If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
- Yearly – This column is mostly informative. It’s helpful to see this in comparison to my annual pay.
The first section I am actually going to address is discretionary spending.
- Groceries/Dining $475.00 – We don’t budget heavily for groceries, which would be a surprise if you saw me. At the smallest I have ever been, fit, I was never small. We shop smart, buy in bulk when it makes sense, and rarely eat out. We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
- Discretionary $250.00 – This gets used for household items, like toilet paper and soap. It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
- Baby stuff $60.00 – We have two children in diapers. ‘Nuff said. This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
- Gas/oil $200.00 – Gas and auto-maintenance. This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
- Clothes $15.00 – All of our dressers are overflowing, so this is strictly replacement cost for the time being. Our kids wear a lot of hand-me-downs.
- Blow Money $50.00 – Occasionally, habitual shoppers need to shop. If they don’t do it on-budget, they will do it off-budget and kill the whole idea.
Initially, we used a “virtual envelope” system. We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent. Didn’t work. We are going on a pure, cash-only system as of the first of the year. No money, no spendy.
Dealing With the Police 101
Last night, a friend called me up and asked me to accompany him to the police station. The police had knocked on his door, waking up his girlfriend while he was out. When he called, they wouldn’t tell him why they wanted to talk to him. Was it an ex trying to make his life difficult or one of his employees getting investigated?
This friend has had a number of interactions with the police, but never learned how to deal with them. Before we left, I gave him a crash course in “stay out of jail”.
Lesson 1: The Police Are Not Your Friends.
During an investigation, you are a suspect. They are looking for a conviction. There may be a “good cop” trying to “help you out”, but he is trying to put you in jail. “Protect and Serve” doesn’t mean you. In general, it means society as a whole. During an investigation, they are serving the interests of the prosecutor.
Generally, they are going to look at you–as the target of their investigation–as the enemy. This is normal. They spend all of their time dealing with scumbags and s***heads. Naturally, they start to assume that everyone who isn’t a cop will fall into one of those categories.
Don’t get pissed when they act rude, ignore you, or anything else. It isn’t a lack of professionalism, it’s just a different profession. They are using interrogation techniques that have been proven successful. Ignore it and focus on Lesson 2.
It will feel wrong to disobey the authority you’ve been taught your entire life to obey. You’re not. You are standing by your rights. Nobody cares about your future more than you do. Certainly not the guy investigating you.
Lesson 2: Your Lawyer is Your Friend.
The second a police interaction starts to look like they are investigating you, demand your lawyer, then see Lesson 4. When you demand an attorney, they stop asking you questions. You can take it back and start talking, so again, see Lesson 4. It’s your attorney’s job to talk to the police and, if necessary, the media. It’s your job to talk to your attorney.
You don’t need an attorney ahead of time. Criminal defense attorneys are used to getting calls at 3AM. It’s part of their job. If you have a low enough income as defined by whatever jurisdiction you are being investigated in, you can get a public defender. That’s better than nothing, but I’d prefer to hire a professional shark, even if it means mortgaging my future. Prison is a big gamble.
Lesson 3. Consent is Your Enemy.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
“Officer, I do not consent to any search and I would like to speak to my attorney.” Remember this. Memorize it.
They need probable cause, a warrant, or permission to search your stuff. Never agree to it. Don’t stop them if they search anyway, but never, ever agree to a search. If the search is done improperly, your lawyer(see Lesson 2) will get the results of that searched thrown out.
It isn’t possible to get into more trouble for standing by your rights. There is no crime on the books anywhere in the US called “Refused Consent to Search”. Your day will not go worse because you defended your Constitutional rights.
Lesson 4. Shut Up.
I know a few defense attorneys. According to them, most of the people in jail either committed a crime in front of a bunch of witnesses, or they talked their way into jail. Shut up. You’ll want to either justify or defend yourself depending on the circumstances. Don’t. Shut up. It may be one of the hardest things you ever do, but keep your mouth closed. The only thing worse than talking is lying. Don’t lie, just keep quiet.
There is nothing you are going to say that will make your interrogator invite you home for Christmas. He isn’t your friend, you won’t meet his parents, you aren’t going to his birthday party. There is absolutely no win in talking to him. Shut up. The answer to every question is “Lawyer.” If the only thing you say babble is “Lawyerlawyerlawyerlawyerlawyerlawyer”, you’re probably not going to do too badly.
In your car, the dynamic changes a bit, but the principles don’t. When a cop pulls you over, don’t argue. You can’t win an argument with a cop on the side of the road. Be nice, be polite, and as soon as possible, pull into a parking lot and take as many notes about the encounter as you can. If you are planning to fight whatever he pulled you over for, don’t give him any reason to remember you or spin his official report to make you look bad. Again, shut up. Catching a theme?
Gambling With Your Future
If you are being investigated by the police, your future–or some part of it–is on the line. While you are gambling with your criminal record and your freedom, don’t forget that you are an amateur in this arena. The police, the prosecutor, and your attorney are the professionals and the stakes can be huge. Keep your mouth shut, call your attorney, and thank me later.
Budget Lesson, Part 3
I keep calling these lessons, but they are examples and explanations, more than lessons. Names aside, please see Part 1 and Part 2 to catch up. The Google Doc of this example is here.
This time, I’m going to review my non-monthly bills. These are the bills that have to be paid, but not on a monthly basis. Some are annual, others are quarterly, or even weekly. Every month, the amount–adjusted to the monthly equivalent–is set aside in Quicken.
- School Lunch – We don’t qualify for any of the reduced lunch plan, and I don’t know that it is possible to send a brown-bag lunch that is both cheaper and healthier than the school’s menu. This is automatically replenished whenever it gets below $15. This actually gets paid about every other month.
- Property Taxes – Semi-annual and increasing every year. I know the valuations around me, so I don’t think an appeal would win.
- Life insurance – We pay this quarterly. If I die, my family will be completely covered for several years, without adjusting a single expense. If the expenses are adjusted to account for the fact that I won’t be eating, driving, or using electricity, it will last much longer. This is a separate policy from the one discussed in Part 2. GET INSURANCE! Take care of your family.
- AAA – Since we got reliable cars, this hasn’t been a money-saver, but it’s priceless in terms of peace of mind.
- Vehicle Registration – We have two cars and a motorcycle that need registration every year. I’m planning to sell the bike in the spring, but I was planning that for last spring, too. It’s easy to put that off, since I enjoy riding.
- Daycare – Daycare is a weekly expense. As a two-income family, this isn’t an expense we can do away with…yet. As time goes on, the bill will be getting lower. In June, my youngest reaches a cheaper pricing table and my oldest is almost ready to be done with daycare completely.
- City Bill – Our garbage and sewer are paid through the city on a quarterly basis.
- Web host – I’ve got this blog, plus a few other side projects hosted here. I have been simplifying and reducing the projects that aren’t fun or profitable, but I’m not sure this expense will ever go away.
There aren’t too many items here that can be legitimately and responsibly trimmed.
Money Problems – Day 7: Paying Off Debt
Today, I am continuing the series, Money Problems: 30 Days to Perfect Finances. The series will consist of 30 things you can do in one setting to perfect your finances. It’s not a system to magically make your debt disappear. Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.
I’m not running the series in 30 consecutive days. That’s not my schedule. Also, I think that talking about the same thing for 30 days straight will bore both of us. Instead, it will run roughly once a week. To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.
On this, Day 7, we’re going to talk about paying off debt.
Until you pay off your debts, you are living with an anchor around your neck, keeping you from doing the things you love. Take a look at the amount you are paying to your debt-holders each month. How could you better use that money, now? A vacation, private school for your kids, a reliable car?
If you’ve got a ton of debt, the real cost is in missed opportunities. For example, with my son’s vision therapy being poorly covered by our insurance plan, we are planning a much smaller vacation this summer–a “staycation”–instead of a trip to the Black Hills. If we didn’t have a debt payment to worry about, we’d have a much larger savings and would have been able to absorb the cost without canceling other plans. The way it is, our poor planning and reliance on debt over the last 10 years have cost us the opportunity to go somewhere new.
The only way to regain the ability to take advantage of future opportunities is to get out of debt, which tends to be an intimidating thought. When we started on our journey out of debt, we were buried 6 figures deep, with a credit card balance that matched our mortgage. It looked like an impossible obstacle, but we’ve been making it happen. The secret is to make a plan and stick with it. Pick some kind of plan, and follow it until you are done. Don’t give up and don’t get discouraged.
What kind of plan should you pick? That’s a personal choice. What motivates you? Do you want to see quick progress or do you like seeing the effects of efficient, long-term planning? These are the most common options:
Debt Snowball
Popularized by Dave Ramsey, this is the plan with the greatest emotional effect. It’s bad math, but that doesn’t matter, if the people using it are motivated to keep at it long enough to get out of debt.
To prepare your debt snowball, take all of your debts–no matter how small–and arrange them in order of balance. Ignore the interest rate. You’re going to pay the minimum payment on each of your debts, except for the smallest balance. That one will get every spare cent you can throw at it. When the smallest debt is paid off, that payment and every spare cent you were throwing at it(your “snowball”) will go to the next smallest debt. As the smallest debts are paid off, your snowball will grow and each subsequent debt will be paid off faster that you will initially think possible. You will build up a momentum that will shrink your debts quickly.
This is the plan I am using.
Debt Avalanche
A debt avalanche is the most efficient repayment plan. It is the plan that will, in the long-term, involve paying the least amount of interest. It’s a good thing. The downside is that it may not come with the “easy wins” that you get with the debt snowball. It is the best math; you’ll get out of debt fastest using this plan, but it’s not the most emotionally motivating.
To set this one up, you’ll take all of your bills–again–and line them up, but this time, you’ll do it strictly by interest rate. You’re going to make every minimum payment, then you’ll focus on paying the bill with the highest interest rate, first, with every available penny.
DOLP
This is the plan promoted by David Bach. It stands for Done On Last Payment. With this plan, you’ll pay the minimum payment on each debt, except for bill that is scheduled to be paid off first. You calculate this by dividing the balance of each debt by the minimum payment. This gives you an estimate of the number of months it will take to pay off each debt.
This system is less efficient than the debt avalanche–by strict math–but is better than the snowball. It give you “quick wins” faster than the snowball, but will cost a bit more than the avalanche. It’s a compromise between the two, blending the emotional satisfaction of the snowball with the better math of the avalanche.
Snowflaking
For each of these plans, you can give them a little steroid injection by snowflaking. Snowflaking is the art of making some extra cash, and throwing it straight at your debt. If you hold a yard sale, use the proceeds to make an extra debt payment. Sell some movies at the pawn shop? Make an extra car payment. Every little payment you make means fewer dollars wasted on interest.
Paying interest means you are paying for everything you buy…again. Do whatever it takes to make debt go away, and you will find yourself able to take advantage of more opportunities and spend more time doing the things you want to do. Life will be less stressful and rainbows will follow you through your day. Unicorns will guard your home and leprechauns will chase away evil-doers. The sun will always shine and stoplights will never show red. Getting out of debt is powerful stuff.
Your task today is to pick a debt plan, and get on it. Whichever plan works best for you is the right one. Organize your bills, pick one to focus on, and go to it.
Assuming you are in debt, how are you paying it off?
