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.

The Christmas holiday is one of the most anticipated times of the year.  Unfortunately, criminals also look forward to the season as more people are out shopping and leaving their homes unattended during holiday travel.  Here are a few holiday safety tips to protect you and yours this season.

Safety Tips Around the House

Before traveling, contact your local law enforcement agency and ask to have your home placed on “vacation watch.”  Most municipalities offer this service.  The nearest patrol officer will ride by your home for a safety check once during their shift.  Be sure to notify authorities when you have returned.  Note, please do not call 911 to discuss this service.  A non-emergency number should be listed in your phone book. 

Try to make your house look lived in while you are away.  Consider picking up some inexpensive timers for lights and radios, and have them come on at times when you are normally home.  I even suggest staggering the timers so that living room lights come on and off early in the evening and bedroom lights come on later.  This is consistent with most schedules, but adapt it to fit your family’s routine.

Do not broadcast your plans to everyone.  You may be proud that you are taking your family on a week-long cruise over the holidays, but don’t brag too much.  You never know who might be taking note of your travel plans.

Leave a spare key and emergency telephone number with a trusted neighbor or friend.  In an emergency it may be necessary for someone to enter your home (water heater busted, etc.), so it is a good idea to leave a key with someone local. 

Pay someone to rake up leaves and/or blow off your drive way.  Tall grass in the summer and down leaves in the winter are a sure sign of an unoccupied house.

Silence the ringer on your home telephone.  One trick of the criminal trade is to stake out a house and call the phone number.  If the phone rings and rings with no answer it is a safe bet no one is home. If the phone doesn’t ring at all, crooks may suspect they are dialing the wrong number, or someone is home and using the phone.  Do not mention your travel plans on voicemail or answering machines.

Remove garage door openers from cars parked in the driveway.  It is a good idea to leave a second car parked in the driveway, but be sure to remove the garage door opener.  Burglars can easily bust out a window and open your garage with the click of a button.

Lock garage entry doors.  If you live in a home with an attached garage, lock the door from the garage to the home when leaving for Christmas vacation.  Garage doors have been known to malfunction, or be manually forced up, allowing access to your home.

Trim shrubbery and trees close to your home.  Overgrown shrubs provide the perfect cover for a burglar working to pry open a window.

Do not leave remnants of Christmas morning by the curb.  Large appliance boxes and containers are a sign Santa was really good to someone in the neighborhood!  They are also a sign to theives that the house just got a new plasma television for Christmas.  Break down boxes and put them in cans or black garbage bags to conceal the products that were inside them.

Holiday Shopping Safety Tips

Use the buddy system.  It is always a good idea to shop in pairs as theives are less likely to target two or more individuals. 

Lock your gifts in the trunk.  An electronics store bag filled with goodies sitting on the back seat in plain view is tempting for a smash-and-grab burglar.

If shopping at an outdoor mall or outlet stores, consider moving your car when you drop off presents.  No one likes to lug around too many items from store to store, so most people return to their cars several times to drop off purchases and resume shopping.  When you do this, consider moving your car a few lanes away.  Thieves like to stake out parking lots for people leaving purchases in their car and returning to stores.  If they see you get in and drive away they will likely assume your shopping trip is over and look for another target.

Ask for a security guard escort.  If you approach your car and see an unsavory character staked out nearby, return to the store and ask for someone to walk you to your car.  Most store security personnel are used to this, so there is no need to feel embarrassed.  Besides, better to be safe than sorry!

Have keys ready, and don’t take your time getting in your car.  There is nothing I hate to see more than a single woman approaching her car while digging through a purse for her keys.  With her head down and her attention diverted she is such an easy target.  Find your keys before you leave the store and have them in hand.  Walk quickly and confidently to your vehicle, and unlock, enter and lock the doors in quick fashion.  Once safely inside you can verify receipts, store away purses, etc.

Park in well-lit areas.  If you know you will be shopping for a long time, anticipate coming out into a dark parking lot and look for light poles to park under.  Besides providing light, light poles also serve as a reference point in a crowded parking lot to remind you where you parked your car.

Parents, park next to the shopping cart return area.  When you are finished shopping it is nice to put Junior in the car seat and return the shopping cart one lane away, rather than walking fifty feet away with Junior alone in the car, or you toting him and three bags of groceries.

These are just a few things to keep in mind while out and about this holiday shopping season.  Actually, they are good tips for any time of the year, but especially during times when criminal activity is high. 

I’d like to hear from you.  Please add any additional holiday safety tips in the comments below.

God grant me the serenity
to accept the things I cannot change;
the courage to change the things I can;
and the wisdom to know the difference.

These last few months have been trying times for me, personally and financially.  Several things have happened to create sort of a “perfect storm” in my life and when that happens I always look for some piece of inspiration–something to keep me on track. I found that peace in The Serenity Prayer, and have applied its lessons to my personal finances and beyond.

God Grant Me the Serenity To Accept the Things I Cannot Change

Stop and think for a moment about all the things that are currently causing stress in your financial life.  I bet there are quite a few you have control over, like overspending or expensive car payments.  But if you are like me there may be other things that are outside of your control, yet they continue to cause stress. Here are some examples I have witnessed recently from others:

• The stock market losses.  If you are in the market for the long haul there is little you can do to hedge against these wild swings (mostly downward swings) over the last few months.  Instead of worrying over stock tickers incessantly, try to put it out of your mind and remember that you have a long-term perspective.
• Political landscape.  I’m not the best one to be advising others not be stressed over politics.  I used to be a politics junkie, listening to talk radio and news most of the day.  But over the last couple years I have unplugged from a lot of it.  Politicians on both sides of the aisle have abandoned fiscal conservatism, as the recent bailouts have shown, and the more I listen to politicians finding ways to spend our hard-earned tax dollars, the higher my blood pressure gets!
• The financial situation of others.  Many people lie awake at night and worry over other people’s financial problems–their parents, their kids, their best friend, etc.  While it is healthy to show some concern, it is healthier to recognize that they make their own decisions freely, and the best thing you can do is be a supportive father, son or friend.

The Courage To Change the Things I Can

When you have identified the things you do have control over you must find the courage to make changes in your life.  For example, if you are unhappy with your current salary, what strategies are within your control to increase that number?  Chances are your boss isn’t just going to give you a raise for no reason.  You may have to return to school to finish your degree, or agree to take on some additional training related to your job.  You may have to start your own side hustle.  All of these things take courage because they are outside of our comfort zone.

The Wisdom To Know the Difference

Most of us are aware of the types of things that cause us stress, and the thing that don’t.  The challenge is placing a new challenge in our lives into one of those two categories.  It is this “wisdom to know the difference” that makes ALL the difference.  Chances are right now you are worrying over things that are not within your control, and not worrying about things that are within your control.

I encourage you to reflect on the things that are now causing stress in your life.  Take some time to jot them down on a piece of paper, and then really search deep down to figure out which column they belong in–things you cannot change, and things you can.  Then get busy developing a plan to change those things you can.  You will feel better just for having gone through the exercise.

I know it is en vogue to bring back things from the past, but this is a trend I thought had gone forever:  layaway.  With tightening credit policies, and maxed out consumer debt, it seems layaway is making a comeback.  Personally, I am not a big fan of layaway, ranking it somewhere between using a credit card and taking on a rent-to-own contract.

An Alternative to Layaway

In the Frugal household we have created our own sort of layaway plan.  When we have our hearts set on a big-ticket item we relabel a “subaccount” at ING Direct and transfer a little money there from each paycheck.  For instance, we recently needed to save up a couple hundred dollars for new tires.  Rather than charging them, or financing them through the tire dealer, we gave a subaccount the nickname “Tires” and transferred $25 a paycheck (every two weeks) into this account.  In just a couple months we had enough money to pay cash for new tires.

The account described above is often referred to as a sinking fund, where funds are “sunk” in regular intervals to pay for an item.  The concept can be expanded to cover annual, or semi-annual, insurance premiums and other infrequent expenses.  When you think about it, an escrow account at your mortgage is just a sinking fund where a little money is siphoned away from each payment and held to pay insurance premiums and tax bills.

Layaway is Just a Forced Savings Account, With Bad Terms

My main problem with layaway is that is really a forced savings account with fees and sometimes a nasty cancellation policy.  Instead of agreeing to purchase an item by a certain date, and risk being charged if that date comes without full payment, why not just save up the money in the same increments over the same amount of time?  That way, if something comes up and you cannot buy the item when the time comes you can easily back out of the purchase.

When I told my wife I was preparing this piece for Frugal Dad she shared a layaway nightmare she had as a young teenager.  Guess jeans were all the rage, and while at the mall with a couple friends my wife put a pair on layaway along with an $8.00 “down payment” so the store would agree to hold the jeans.  The idea was that she would later return with her mom and get the jeans.  They never returned, and my wife was out $8.00.  It was a painful experience, but it must have cured her.  That was the last thing she ever put on layaway!

One of the side effects of the atrocious market we have endured in recent months is incredibly low interest rates on deposit accounts. Bank savings accounts are earning less than 1% yield, and even traditionally higher online savings accounts, such as ING Direct, are only offering 2.75% APY at the time of this writing.  What’s a conservative-leaning investor to do?

If you are up for taking on slightly more risk for the chance of a lot more reward, the peer-to-peer lending industry might be the place for you.  I was admittedly skeptical when peer-to-peer lenders first came on the scene, but the more I’ve learned about the industry, the more I appreciate its ability to cut out the middle man (banks).

What is Peer to Peer Lending?

Peer-to-Peer lending involves investors pooling their money to fund loans for borrowers in the private market.  Interest rates vary according to the credit risk for a particular borrower, but it isn’t uncommon for investors to earn over 6% or 7% on loans for those with good credit, and much more on riskier borrowing prospects.

One of the aspects of peer-to-peer lending that appeals most to me is the fact that banks are cut out of the lending cycle and power is pushed down to the average citizen.  Perhaps it appeals to my entrepreneurial spirit.  I might not be able to fully fund your $10,000 debt consolidation loan, but I can pitch in $100 along with dozens of other investors.  This helps spread the risk around a bit so that no single investor is heavily leveraged in any one loan deal.  It also provides borrowers greater opportunity for receiving a loan in this tightening credit market.

Borrowers are asked to fill out a profile including a compelling description indicating the reason they are in need of a loan.  This has a way of personalizing the request.  Perusing the current loan listings at Lending Club I see a variety of loan requests from debt consolidation, to a used car purchase, to a request for start-up capital to fund a new business idea.  Knowing that you are investing in someone’s dream is exciting!

Peer-to-peer lenders, such as Lending Club, also grade borrowers based on their creditworthiness including such factors as debt-to-income ratio, credit scores, etc.  Of course, it isn’t foolproof, and there are risks of defaults and late payments.  However, several well-placed investments in loans could make for a portfolio producing a much higher yield than other types of cash investments.

How Much to Invest in Peer-to-Peer Lending?

I personally treat this type of investing much the same way I treat single-stock investing; I don’t put more than 10% of my overall portfolio in either investment.  The bulk of my investing is for retirement inside growth stock mutual funds.  Outside of retirement funds I stash emergency fund cash away in an online savings account, and with any remaining cash I may dabble in things like peer-to-peer lending or investing in single stocks I feel good about over the long-term, and have a history of producing great dividends.

So like anything else I recommend here, don’t dump all your eggs in one basket.  Start small until you get the hang of social lending.

Interested in finding out more about social lending?  Join me over at Lending Club!