MOVED The Cost of 'Guilt Tipping' When You Pay on a Tablet

Posted by Dana George on Dec 29, 2019 10:00:00 AM

Do you feel uncomfortable being prompted to tip through a tablet-based payment system? You're not alone.  

If you frequently shop using a debit or credit card, you've probably completed at least some of those purchases on a tablet-based payment system. It looks like a large iPad and is often mounted near a cash register. What's interesting about these payment systems is that merchants have often set them to ask if you would care to tip. Regardless of the service provided -- pouring a cup of coffee, giving a haircut, or selling a new pair of jeans -- you are asked to tip anywhere from 10% to 30% (or more).

Depending on the person behind the counter or handing you the tablet, you may have a set of eyes on you as you decide whether or not tipping feels appropriate in that specific situation. And if so, how much.

Barista grinning at customer as he swipes her card through an iPad reader.

Guilt tipping

I recently had a manicure. Nothing fancy. I soaked my fingers in a bowl of soapy water and a tech cut cuticles that were worthy of a mountain woman. Before polish was applied, another employee handed me a tablet for payment. The tips on this tablet were not simply suggested percentage rates, but each of the rates was intended to represent a review of her work. It looked like this:

  • 15% -- Service was fine
  • 20% -- It was a good experience
  • 25% -- I will definitely be back
  • 30% -- My tech hit it out of the park

I forget to mention an important fact. The tech still had a port in her chest from a recent battle with breast cancer. Guess how much I tipped her?

The industry

Tablet-based payment systems are a boon to retailers. They're sold by companies like Square, Revel, and ShopKeep, and designed to allow merchants to include or turn off the tipping prompt.

According to industry leaders, the opportunity to tip via a tablet-based payment system is good for cashless customers because it gives them a way to tip. Fair enough. It also makes the socially sensitive among us feel like jerks for not tipping enough (or even knowing what constitutes enough).

ShopKeep breaks down how many of their customers take advantage of the tip prompt option. According to the cloud-based service providers, 49% of "quick serve" clients like bakeries and cafes have the tip option turned on, and 12% of more traditional retailers. 

Figuring it out

Tipping in the U.S. took root shortly after the Civil War. Americans who had the money to travel noticed Europeans were in the habit of tipping and brought the practice back to America. It served to show their friends that they'd been abroad and were genteel enough to tip like Europeans.

But let's face it, we've all received different memos regarding proper tipping etiquette. Some people leave a tip only for top-notch service, while others are too embarrassed to leave an establishment without emptying their pockets. I've been out with friends who were generous tippers and was once with someone so stingy that I snuck back to the table to increase the minuscule tip she slipped under her plate. 

Given the divergent nature of the advice, it's difficult to know how much to tip. The fact that we haven't mastered the art of basic tipping in more than 150 years begs the question of whether we're ready for this new frontier of tipping in establishments in which we did not expect to be asked.

I'm no Emily Post, but…

I'm no etiquette expert, but I am someone who understands the value of a dollar. As tablet-based tipping becomes more commonplace it will also become more expensive to support. Say you tip $3 three times a week for services that used to be free (like buying a shirt in your favorite boutique or picking up a ready-made arrangement for a friend in a floral shop). That's $9 per week in new tips. Invested in an easy-to-sign-up-for investment account earning 7% interest, that tip money would be worth over $6,500 in 10 years, $19,000 in 20 years, and a whopping $44,500 in 30 years.

Coming up with a plan

Rather than be shocked by the tipping prompt on a tablet-based payment system, I have decided to go in with a plan. If someone had to lean slightly to their left to lift a muffin out of case for me, it is not tip worthy. If an employee provides exceptional service, I want to thank them by tipping. It's that simple.

Guilt is a pretty silly reason to part with our money, particularly when those funds can help us plan for a more secure future

Topics: Buying Stocks

MOVED Am I Too Broke to Invest?

Posted by Dana George on Dec 24, 2019 8:00:00 AM

If you wait for the perfect moment to begin investing, you'll never do it. Today is the best time to begin building wealth. 

If you think you don't have enough money to invest, consider this: Over half the population is finding ways to put some of their cash into the stock market.

As of April 2019, 55% of Americans had money invested in the stock market, according to a recent Gallup poll. Respondents included individual stocks, as well as stocks purchased as part of their retirement accounts and/or mutual funds.

Pair of hands holding an empty wallet open over a calculator and some credit cards on a desk.

While that's impressive, it's also striking is that 45% of Americans do not own any stock in any form. If you are one of them, it's time to ask yourself why. The chances are it's down to one of these three answers (or a combination thereof):

  • I don't know how to invest
  • I hate risks
  • I don't have enough money

If you're currently unemployed and worried about keeping a roof over your head or food on the table, it's safe to say that now is not the right time to invest. If, however, you have a job and your bills are getting paid, it's time for someone to call malarkey on your excuses for not investing. 

It doesn't have to be complicated. If your employer offers a 401(k) retirement plan, make pre-tax contributions. If they match any portion of your contribution, it's free money. Educate yourself on the stock market and know that you don't need to be a millionaire. You just need a plan.

In short, once you have enough money socked away in your emergency fund -- ideally in a high interest savings account that's easy to access in the short term -- you're ready to invest for the long term. 

Address each excuse

Not to go too far down a psychological rabbit hole, but the idea of investing can bring up a host of scary feelings and being too broke is just one of them.

Afraid you don't know how to invest? 

You're already ahead of the game by reading this article, and there are plenty of books and other resources available if you want to learn more. But the best way to learn is to dive into the investment waters. You can ask questions and look for answers as you go. It's like learning to swim. You just gotta get in the water.

Think you don't have enough money to invest? 

That's likely because you think of investing as something "other people" do, people who make more money than you. That's just wrong. People like you invest their money. You know why? Because historically, stocks invested in the S&P 500 have averaged a return of 10%. Through good economic times and bad, those successful investors let their investments ride and reaped the benefits.

Afraid you'll lose money in the market? 

You will -- sometimes. And sometimes your investments will earn so much they will more than make up for losses. Start with a small amount of money, and keep it simple by looking at index funds or using a robo-advisor. 

It's natural to be worried about investing -- it's new and you don't fully understand the process. But like any fear, you have to face it to overcome it. And let's be honest here; there are few things scarier than getting into retirement with nothing put away for your golden years. Your future self will thank you for taking a risk now. 

Start small to end big

Can you think of ways you might scrape together an extra $10 a week? I don't know about you, but that's less than I pay for Netflix. It's less than a hotspot for my cell phone, less than two adult beverages with friends, and far less than the amount I spend on groceries that go bad and have to be tossed each week (my refrigerator is like death row for Brussel sprouts and kale). Look at your budget, work out where you can shave a few dollars each week, and assign that money to your investments.

Let's say you did decide to invest $10 each week. Although it doesn't sound like much, here's what would happen if you invested it in an IRA (or other investment account) drawing 8% annually:

$10 a week for this many years...

...would be worth










That $10 a week adds up to $13,000 over the course of 25 years. Assuming you earn at least 8% interest on your investment, that means you could earn an additional $26,263 on that money -- giving you $39,263. 

And it's all due to compound earnings. Compound earnings are a thing of beauty for this reason: You make an investment and it earns money, which is reinvested. As your investments grow, the earnings themselves start to earn more money. Compound interest is the reason banks get rich when we don't pay off our credit cards each month, and it's also the reason regular, everyday people can send their kids to college and retire in comfort. 

Remember though, the stock market goes through peaks and valleys. It's essential to view these investments as long term. That means not panicking when they're down and not cashing out when they're up. And don't invest money that you might need to access in the short term.

Just do it

I'm going to let you in on a little secret: You'll probably never feel like you have enough money to invest. There's always going to be somewhere else to use that money. You'll get a new job and buy a new car. You'll get a raise and send the kids (or dogs) to a better summer camp. If you wait until you feel wealthy, you will never invest.

So stick your toe in the investment water and get ready to swim. Once you realize how much your investments can help you meet your financial goals, you'll wonder why you ever waited. 


Topics: Buying Stocks

MOVED 4 Simple Ways to Double Your Money

Posted by Kailey Hagen on Dec 22, 2019 2:00:00 PM

Want more money? Try these four things.

We could all use a little extra cash in our lives, especially at this time of year. Slaving away at your 9-to-5 is one way to do it, but it's not the only way. While the following four strategies won't make you rich overnight, when used consistently over time, they can help you double your money.

Pair of hands belonging to person sitting in driver's seat of car flipping through a wad of cash.

1. Investing

Investing is one of the best ways to grow your wealth because there's a good chance your annual rate of return will outpace inflation, gradually increasing your net worth. Plus, it doesn't require much work from you -- apart from choosing the right investments. That's not always the easiest thing to do, but there are plenty of tools out there to help new investors get started.

It is worth taking a look at index funds because they offer low fees, instant diversification, and historically strong growth. These are mutual funds that passively track a market index, like the S&P 500. You could also try a robo-advisor if you want help picking investments. They tell you how to invest your money based on your answers to a few questions, although the advice isn't as tailored as some might like.

However you decide to invest and whatever you decide to invest in, stay mindful of fees because they can eat into your profits. Check your prospectus and your broker's fee schedule to learn what fees you're paying. You also need to make sure you diversify your investments across many assets and sectors to reduce your risk of loss.

2. Use a high-yield savings account

If you have money that you don't expect to use in the next few years, investing is your best bet. But if you want to sock away some cash for your emergency fund or a large purchase, a high-yield savings account is probably a better choice. These operate just like traditional savings accounts, but offer much better interest rates. The average savings account APY is 0.09%, but some high-yield savings accounts have APYs of more than 2%.

To give you a sense of the difference that could make, consider a five-year investment of $10,000. With the average 0.09% APY, it would only be worth about $10,045 after five years. But if that same sum had a 2% APY, it would be worth nearly $11,041 after five years. That's nearly a $1,000 difference, all from switching up the type of savings account. It may still take a while to double your money in an account like this, but it'll get you there much faster than a typical savings account.

3. Start a side hustle

If you're looking to make a little extra cash in the short term, there are often seasonal jobs available during the holidays and summer months. But it's also very possible to start a side hustle and generate extra cash year-round. There are a lot of options these days. You could drive for a ridesharing company, sell things online, walk your neighbor's dogs, or teach classes in your area of expertise. Think about what you're good at and how you could best monetize it. Then, advertise your business to your family and friends to help generate customers.

Keep in mind that you don't get to keep all of your side hustle income. You owe a portion to the government. If you also had the side hustle the year before, last year's tax return should tell you how much you must pay quarterly. Otherwise, you can estimate your taxes using this worksheet.

4. Spend less to double your savings

Doubling the money in your bank account won’t necessarily require any extra work if you're willing to cut back on your spending. Comb through your budget and look for areas where you're spending more than you need to or more than is wise. Dining out, clothing, and entertainment purchases are a good place to start. 

You should also look through your subscriptions for any you're not using anymore. Check your bank and credit card statements for the past year to make sure you don't overlook the ones that renew annually or every few months. Put the money you're saving into your high-yield savings account or your brokerage account to help it grow more quickly. 

Try one or a combination of the strategies above. If you stick with them, in time you can grow and maybe even double your money.

Topics: Buying Stocks