What if you budgeted for tipping?

28 October 2015

We’ve all been there. We draw R100 in two crisp R50 notes only to find that in a few days it’s gone. Did you use it to buy a book? Movie tickets? A big bunch of flowers? No. It trickled away slowly and reliably on tipping.

How is this possible? Let’s imagine you visit your local shopping mall twice in a week, paying R10 for secure parking each time. You go to gym once a day during the week, parking in a parking lot manned by car guards and paying them R5 for each visit. You stop off at a shop five times per week, to pick up dinner on the way home, and pay the guards at that centre R5. That is already your R100 spoken for.

Now, tipping is unavoidable. Eating out at restaurants, going shopping and parking around the city will inevitably rack up service fees. It is not realistic to pretend otherwise. However, there are two things we can do to keep this, often unaccounted for, expense within reasonable limits:

1. Be aware of how much you spend

The key to any successful budget is awareness, and honesty. The black hole that sucks up your extra cash becomes a lot smaller as soon as you examine your spending habits. While tipping usually seems like an ad-hoc expense that you only think about when you reach into your pocket to find some spare coins, there are some known factors you can use to help you budget. How many times on average do you eat out, get petrol, go to the mall, movies or gym? Do you buy groceries on your way home or do you do it all once a week? Asking yourself these questions already gives you an idea of how many times you need to tip. This allows you to allocate a percentage of your budget to it, which in turn, keeps your spending under control.

2. Set a tipping rate

If you grab whatever coins are closest to you, this is a particularly helpful practice. By setting your tipping limit in advance, you take the hurry and emotion out of the exchange. Take an honest look at your budget and decide a flat rate for certain tipping situations. If you combine this knowledge with the average number of times you need to tip, you should have a good idea of how much you can spend each month.

The idea behind both these habits is to take the little things into account. By putting them into practice, you can plan, adjust your budget, and spend within your means.

What about you? Do you tip differently for parking depending on where you are and how long you are spending there? Do you have a strategy or does your tipping depend on what’s in your wallet and how you’re feeling on the day? We’d love to hear.

Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.