There is plenty of career advice floating around the web offering tips for how to get a raise.  Ideas range from proving cost savings to your boss thanks to your efforts, or cross training in a particular specialization that makes you stand out from coworkers.  But what happens after you receive the raise?  If you are like most people the slight bump in your paycheck will be frittered away thanks to an equal bump in your lifestyle.  With 2009 right around the corner, hopefully at least a couple of you are expecting a raise at work.  Here are a few ways to make that raise really effective.

Put a freeze on your lifestyle, but not completely.  I like the idea of holding expenses after getting a raise and pocketing the entire amount into a savings account at ING Direct.  However, that isn’t very realistic.  Besides, you likely earned that raise through hard work, and should enjoy at least a portion of it.  I recommend increasing your savings contributions to various savings vehicles (see below) by about half of the amount of your new raise.  With the remaining half, go ahead and sign up for that Netflix account, or gym membership, or buy that new golf putter you’ve been eying.  Success with personal finances is about finding balance.

Where to save half of the new raise.  The first place to start is your 401(k) plan at work.  Chances are you are contributing a percentage of your income, so this boost in annual salary will automatically boost your 401(k) contributions.  Still, if you aren’t contributing through a match, I consider boosting another percentage point or two using proceeds from your new raise to obtain the match.

If you are already contributing enough to receive a match in your 401(k), consider adding the remaining 50% of your raise amount to a Roth IRA.  The earnings here grow tax-free, and you can withdraw your contributions any time without penalty.  If you have already maxed out IRA contributions for the current tax year then simply dump half that raise in your taxable savings account, such as a high yield online savings account or brokerage account.  The idea is to get the money out of your primary checking account, where it will just be frittered away in DVDs and extra stops at Starbucks (at least that’s where mine would probably go!).

Should I accept a raise, or a bonus? Some companies are offering bonuses in lieu of raises this year to lessen the increased salary budget for next year.  If given the option, take a raise over a bonus, even though the lump sum from a bonus looks appealing.  Raises are permanent (well, as permanent as anything in the job market can be these days).  Things like matching retirement funds, life insurance proceeds, etc. are based on your annual salary, and with some creative accounting companies are often able to avoid these increased expenses by offering year end bonuses instead of increasing your salary with a raise.

Time’s almost up! Here are a few last minute gift ideas that don’t require standing in line on Christmas Eve.  My personal favorite is an Amazon gift card, which may be printed out or emailed to the recipient.  You can buy just about anything at Amazon these days–books, DVDs, electronics, even groceries!

Amazon Gift Card.  Amazon.com used to be the one-stop shop for buying books online. In fact, it still is.  But Amazon now offers so much more!  I have bought everything from packs of diapers to household appliances from Amazon, and I’m sure an Amazon gift certificate would go a long way towards pleasing someone on your list.  They offer several options for procrastinators like print from home or email delivery, so no waiting on a gift card via snail mail–perfect for last minute shopping.

Netflix Membership.  Plans start at $4.99 a month, and are a wonderful last-minute gift idea for the movie buff in your life.  Simply select the plan, length of time you would like to gift and you’re all set.

Magazine Subscription.  My first introduction to the world of personal finance was taking up an interest in magazines like Kiplinger’s Personal Finance, Money, and Smart Money.  All offer great personal finance information on topics such as debt reduction, investing, household finances, etc, and make a great gift for a twenty-something just starting out (I personally like Kiplingers best, but subscribe to all three). Also check out my personal favorite, Backwoods Home Magazine.

Cash. If all else fails, give cash.  Cash is the universal gift. It can be spent anywhere that accepts money!  No worries over expiration dates, stores going bust and gift cards becoming invalid.  And one of the best things about cash is the recipient doesn’t have to spend it at all.  Maybe they can use it to add to their debt snowball, or get a jump start on an emergency fund.

The following guest post is from Elise Degrass.  Elise is a new freelance writer. She spends most of her day writing and reviewing cell phones.  She appreciates your feedback at elisedegrass@gmail.com.

We’ve all experienced shock at seeing a high cell phone bill, and the prospect of facing permanently high phone bills is daunting to many people; after all, phone conversations are an essential part of personal and business life. Rather than giving up your phone or keeping it turned off, there are some smart options that you can utilize to keep your bill low, while allowing your to retain all of the advantages that led you to use a cell phone in the first place:

Carefully Evaluate Whether Your Existing Plan is Cost Effective

Even if you’re locked into a contract with a certain provider, most of the time you can switch between various calling plans. In particular, if you have many more minutes than you need, consider moving to a lower cost plan. If you have multiple family members on the account, then you might want to look at a family plan that will provide volume discounts. For many people, a disproportionate percentage of their call time is linked to just a few people: try to coordinate cell phone providers with those you call most, as that will often all free in-network calling.

Schedule Longer Conversations in Advance

Although spontaneous conversations occur all the time, if you can anticipate longer conversations and schedule them for nights and weekends, you’re bound to save on valuable peak time minutes; check when your night minutes kick in, as it varies from plan to plan.

Resist the Temptation to Purchase Add-on Features

Most people are constantly bombarded with advertisements for upgrades on their cell phones, from ring tones to software packages. Make sure you read the fine print on these plans, as they’ll likely to continue to bill you well after the initial purchase.

Find An Affordable Text Messaging Plan

Rather than incurring an expensive per diem text messaging charge, you can often purchase a text messaging plan that will save your quite a bit when all costs are factored in. Many cell phone providers offer plans which can accommodate your level of use.

Use Alternative Methods of Communication

Having a cell phone can be convenient, but also consider utilizing inexpensive methods of communication such as Skype when you’re at your computer – that way, you can cut down on your costs while maintaining a high level of available for business clients, friends and family.

Local car dealerships have been running a blitz of advertisements here in my local town over the last several weeks in an effort to move inventory before the end of the year.  One thing I detest about car advertisements is the notion of “affordable payments.”  As if the final cost of the automobile is irrelevant.  What matters is whether or not buyers can afford the monthly payment.

And this monthly payment mentality is not limited to the car-buying business.  Blue Hippo computers has gotten in on the act, too.  A fellow blogger recently posted about Blue Hippo computers, a company that “helps” people “afford” computers by offering a monthly payment plan.  In fact, Blue Hippo is selling inferior, over-priced products through some sort of bastardized layaway or rent-to-own plan.  Here’s an excerpt from his article; first a message from the Blue Hippo site, and then his comparison:

Unlike other financial companies, BlueHippo® doesn’t check your credit and measure you based on some score. Since we don’t check your credit, we do ask that you build a credit history with us by paying a $99.00 initial fee, followed by 52 weeks of consecutive layaway payments of $39.99. After 13 weeks we can then offer to finance the balance of your purchase price, order your computer, and have it shipped directly to your home via UPS or FedEx. It’s that simple!

After reading this, my first question was “So how much do you pay for the laptop?”. Based on the above, assuming you use their layaway program, you’ll pay $99 + (39.99 * 52 weeks) = $2178.48.  I’ve read that the $39.99 is for the desktop and that the laptop is actually $49.99 for 52 weeks making the laptop $2599.48.

As he points out later in the article you can get “a faster processor and double the hard drive space” at a site like Dell.  So why would anyone even consider doing business with Blue Hippo?  Because they offer a monthly payment plan.  That’s it.  Forget the fact you will pay many times the cost of a comparable computer.

The only way to win at finances long term is to break this monthly payment mentality.  With the exception of large expenditures such as a house, just about everything else in our life can be paid for in full, up front, at the time of the purchase.  Doing so may change your ownership time line, but there is nothing wrong with delaying gratification for the satisfaction of avoiding a new debt.

Next time you are considering a large purchase and considering a monthly payment option, inspect the terms of the deal.  Chances are you will be paying much more for the opportunity to make payments rather than paying in full on the day of the purchase.  Trust me, stores, car dealerships and banks are not doing you any favors for offering monthly payments (plus interest) for many months, despite how nice their advertising sounds.

Much of the advice I share here are lessons I’ve learned the hard way.  I certainly don’t possess any unique skill at navigating the personal finance world, and I’ve made my share of mistakes.  To clean up those mistakes I typically advise families to cut any unnecessary spending, particularly in this time of recession.

We have taken our own advice in the Frugal household by cutting the cable back to basic service, lowering our cell phone plan, signing up for the value Internet plan, and a number of other cuts.  However, there is one expense I am unwilling to let go–my gym membership.

Gym memberships really are a luxury in that I could get adequate exercise with a good pair of walking shoes and a few dumbbells.  However, with our current layout a home gym is not possible, and most of the equipment I use at the gym is too expensive to put in the house anyway.

Over the years I have struggled with whether or not to let go of my gym membership.  I have even gone so far as canceling it and trying to do home workouts to no avail.  Right now my membership costs about $30 a month, or $360 a year.  That works out to roughly a dollar a day.  Actually, because I don’t go every day like I should it works out to closer to two or three dollars a day.  Still, that is not a lot considering the benefits I receive.

Benefits of a Gym Membership

Lower health care costs.  If I can get in and stay in better shape it will help lower health care costs and insurance premiums.  In this way, I consider the $30 a month an investment because it more than offsets the costs of additional doctor visits and increased premiums.

Relieves stress.  After sitting at a desk all day, and much of the night, it is good to get up and move around.  I have lifted weights since high school and find it to be therapeutic in terms of relieving stress.  It would take much more than $360 to outfit my garage with the same equipment I use at the gym–weight bench, squat rack, leg press, barbells and a full weight set, not to mention the various cardio equipment.

Mental clarity.  Ever just feel like you are in a fog, mentally?  Me too.  When I start to feel that way I immediately look at two things:  my diet and my workout schedule.  When I start to slack off on either one I can feel a decline in mental sharpness and often feel more fatigued.  Strange that working to near exhaustion in the gym actually gives you more energy, but it really does.

Adds discipline to your daily routine.  Regardless of what time of day I workout, the workout itself sets the tone for the day.  I used to get up early and hit the gym, but I have replaced that early morning time with writing.  Now I typically workout after I leave work, and it is a nice change of pace to leave the office, hit the gym and then head home.

Networking opportunities. If you are single, this advice may mean something totally different to you! But for us married folks, I am referring more to professional networking opportunities.  The gym is sort of a melting pot for professionals in my area as people from a variety of industries have memberships to the same gym.  It is not unusual to strike up a conversation about the market with the guy on the treadmill next to me.  Eventually we chat about family and jobs and I have established a new contact.  It never hurts to have a few of these casual friends in your network.

Boosts self-confidence.  It is true that better looking people have an easier time getting ahead in life.  Fortunately for me, looks aren’t the only thing that matter!  Hard work and discipline makes up for a lack of looks, but one secret ingredient can override all others–self confidence.  Establishing a workout routine, sticking with it, and making progress boosts self confidence.  The physical improvements are nice, too, but the change on the inside is far more important.

Do you have a gym membership?  Have you considered canceling it to reduce monthly expenses?

A few members of The Life Skills Network put together an outstanding resource around the theme of simplifying the holidays.  My first “Fab Five” entry will be dedicated to their posts, and I’ll include a few others as well.

Simply Perfect: 43 Holiday Tips from On Simplicity Readers (@On Simplicity)
Simplify Your Holidays in 3 Easy Steps (@My Dollar Plan)
Crappy Economy = Best Christmas Ever! (@My Super-Charged Life)
3 Ways to Simplify Your Christmas (@The Wisdom Journal)
The Top of Your Holiday To-Do List: Breathe (@Simple Mom)

Debt Elimination Tips: How To Reduce Debt With These Do’s and Don’ts.  Enjoyed this read on tips for getting out of debt.  I usually find a nugget in each “get out of debt” article I read, and this was no exception. (@The Digerati Life)

New Credit Card Rules Coming Soon, to the Benefit of Cardholders.  A vote this Thursday could eliminate such credit card nastiness as double-cycle billing, universal default, and at-will interest rate increases.  An unintended consequence of this legislation, assuming it is approved, is that issuers will charge higher rates and lower credit lines to minimize risk exposure.  You don’t expect the banks to lose money do you? (@The Sun’s Financial Diary)

10 Things We Can’t Have Without the Other.  Because as the article states, “one without the other makes less sense than none at all.”  A fun, thought-provoking post. (@Marc and Angel Hack Life)

Despite the tough economy many people still rely on proceeds from holiday tipping for a large portion of their seasonal income. But tipping is not reserved for only traditional service professions such as restaurant servers.  Around the holidays there are many other tipping opportunities for people who provide a service to you throughout the year.

Things to Consider Before Leaving Your Tip

Quality of the service provided.  Obviously, if you are unhappy with the service you are receiving you should not only not leave a generous tip, but should probably discuss the level of service with the provider.  When determining how much of a tip to leave let the service level guide you.  Does the individual go above and beyond, or just enough to get the job done?

Tip within your budget.  Sure, it would be nice to add to your paperboy’s tuition fund around the holidays, but a large tip might not be in your household’s budget.  Do not feel pressured to live up to a tipping standard (like the ones offered below) if your budget does not allow it.

Tip frequency throughout the year.  Do you typically tip for this service during each transaction?  When I venture out to get a haircut I typically leave a few dollars extra as a tip throughout the year, so at the end of the year I don’t leave a particularly large Christmas tip.  However, I do not tip our newspaper delivery person throughout the year, so I’ll include a little extra with the December bill as a thanks for keeping the paper out of the yard and on the pavement.

How Much Should You Tip This Holiday Season?

Like I mentioned above, a general rule of thumb should be to allow the level of service guide you.  Still, it is good to have a baseline, or starting point, when determining how much to tip.  Hopefully the following amounts will help get you started.

• Newspaper delivery person: $20, or less if you are like me and only receive the weekend editions.
• Baby sitter: Equivalent of one evening’s pay (in addition, a small gift from the child is a nice touch).
• Hairstylist:  If you tip throughout the year, double your normal tip amount.
• Mail carrier:  Gift up to $20, but not cash.  Personally, we like to bake a few goodies for both the mail carrier and the policeman that directs traffic after school.
• Housekeeper:  Consider a tip equal to the cost of one service.
• Personal trainer: If you see your trainer regularly (as in more than once a week), $30 to $40 ought to be sufficient.
• Gardener: Equivalent of one week’s pay.  This should be reserved for lawn care providers or gardeners that provide a regular, weekly service.  Give less for seasonal lawn care providers.
• Day care staff: A tip of $25 to $50 to each care provider plus a small gift from your child.

This is also a good time for a reminder that tips are appreciated by those in service industries all year.  One of my family members used to deliver pizza while in school and said you would be appalled by the amounts of some tips he received – in the $1 or $2 range, if any at all.  Think about it, food delivery drivers brave the elements and navigate traffic to deliver your meals.  Why do they receive less than the standard 10%-20% of the total bill that servers in restaurants receive?  Never quite figured that one out.

We are going through rough economic times, and tip income seems to be down for those in jobs that typically rely on tips for income.  People are eating out less, and canceling unnecessary services, minimizing the opportunities for those that work for tips to earn their money.  If you can afford to be a little extra generous, now is a great time heading into the holiday season.