Sunday, October 24, 2010

Tipping Etiquette

It is customary here in Canada to give a 15% tip for service at a sit-down restaurant. It's also customary to tip a small amount (50 cents or so) to a barista who serves you your morning cup of Joe. In some countries the tip is included in the final bill, although most follow this same rule of thumb. Although receiving tips is important to the waiters/waitresses, your tip should reflect the level of service you received. Most food service workers are paid below minimum wage, because they are suppose to earn extra tips. A lot of people tip 15% regardless or whether they received good service or not and a lot of food service workers expect it regardless of the service the provide. Preparing and serving a meal is a team effort so sometimes when you receive bad service it could be a number of things going wrong behind the scenes.

I believe as a customer of a restaurant tips should be subject to the service you receive. Too often are we expected to give the standard tip when we receive terrible service. Often waiters will forget your water because it doesn't add to the final bill and therefore is not going to inflate their tip. This is just awful service and should be rewarded accordingly.

Therefore, if you felt you received good service from an attentive waiter than an appropriate tip would be 15% or more. However, if you felt that:

1) You were ignored
2) It took forever for the bill to arrive
3) The water never came
4) There was some other service deficiency

than your tip should reflect that. So if the waiter was having a bad day and was grumpy, or something went wrong behind the scenes, should this kind of terrible service still be rewarded?

Please leave comments about the food service experiences you have had and whether or not you believe that the percentage you tip should reflect the level of service you received. If you have experience working the in the food service industry please leave a comment on what you think should be an appropriate tip when recieving sub par service.

Here is a video from about tipping:

Sunday, October 17, 2010

The Miracle of Compound Interest

One of the most memorable quotes of Albert Einstein was that "the most powerful force in the universe is compound interest!" Compound interest is really the catalyst that expands your funds and it's the mechanism that can turn small savings into huge sums. With a decent return on your investments (6-8%) and patience, compound interest can grow your savings astronomically.

Here's an awesome story that beautifully illustrates the power of compound interest. Back in the early history of China there was an emperor who had great problems with their tax laws and trouble calculating the dynasty's cash reserves. To solve this problem he hired one of the most prominent mathematician's at the time. The mathematician toiled day and night trying to audit the financial books of the dynasty and finally after months of slaving had solved the emperor's cash reserve problem thus saving the dynasty from financial ruin.

To reward the mathematician the emperor was willing to grant the mathematician whatever he wished, as long as the emperor approved. The mathematician thought long and hard about this and simply asked that he would be given a dollar one day and the next day two dollars, and the next day 4 dollars and so on... for an entire month (30 days), each day doubling the amount given. The emperor in his haste granted the mathematician's wish, not understanding the power of compound interest. Although the amount initially would be small, the amounts would grow exponentially. Eventually by day 30 the amount would grow to $536,870,912! By the end the emperor had to forfeit his entire kingdom to the mathematician or face the shame of not fulfilling his promise.

This story illustrates the power of compound interest. By making small investments early on in your investment career, your savings can grow dramatically. As long as you save for the purpose of growth and reinvest your returns, you can let compound interest work for you. Compound interest is one of the best tools you can use to increase your savings for your long term goals such as retirement or your child's education fund, since one of the main requirements is time. Harness the most powerful force in the universe save often and start early!

Here is a quick video clip illustrating the power of compound interest:

Wednesday, October 13, 2010

Get That Furnace Ready! Save 50% On Your Heating Bill

Summer is definitely over. This morning was one of the first frost warnings here in Waterloo, Ontario. With temperatures dipping below zero, it will soon be time to get that furnace running. Here are 5 home heating tips that will help keep you warm and save you big bucks this winter:

1) Install a Programmable Thermostat - these things pay for themselves as soon as you install them. It is one of the best investments you can make when it comes to your home heating and cooling system. You can program your thermostat a few degrees cooler when everybody is away during the day (between 9 am -4 pm). You can also program your thermostat to kick in an hour or so before everybody starts getting home, so you come back to a warm and toasty home. You can also program your thermostat a couple degrees lower when everyone is in bed and tucked under warm covers (between 12 am - 6 am).

This will potentially save you 30% on your heating bill. You can also set your thermostat to a degree or two cooler during the times when you're at home and throw on a sweater. I don't suggest living in a meat locker, but having a pair of warm pajamas can save you tons. Check out this link for more information: save-30-on-your-home-cooling-bills-with.html

2) Change Your Furnace Air Filter - this is really important and should be done every 60 to 90 days when your furnace is running around the clock. It should be changed more frequently if you have pets or live in an older home with older duct work. The furnace has to work a lot harder to heat your home if it can't get proper air flow into your duct work, so be sure to have this checked out before starting up your furnace for the season. This could potentially save you 10% on your heating bill.

3) Seal Drafts - doorways that lead into your home can be very drafty. To seal them up, try attaching a door sealer to the bottom of your door. Windows are areas that lose a lot of heat as well. You can either caulk around the outside of the window with a clear insulating caulking or attach a thin transparent plastic sheet over the inside of the window (like saran wrap). Another trouble spot are fireplaces, be sure to seal these up when you're not using them. This can save you about 5% on your heating bill.

4) Don't Heat Empty Rooms - If there are any rooms or space that you don't use around the house (i.e the basement area), try not to heat these areas. If you have doorways that can block off these areas you can keep them closed. If there are vents that pump warm air into these areas, be sure to close them. You can purchase magnetic vent blockers that attach over the vent and block the warm air. You can also put a small electric space heater in the rooms that you do use if extra heat is required there. This could save 5-10% on your heating bill. An important thing to note is that you never want the temperature to drop too low in your house since it could damage plumbing if the pipes freeze.

5) Let the Sun In - during the day be sure to open up all the blinds and curtains to take full advantage of mother nature's furnace. Letting the sun in can raise the temperature in your home by a couple of degrees. Conversely, during the nights it's best to close all your curtains and blinds to insulate drafty windows and keep the warm air in. This could potentially save 2-5% on your heating bill.

The savings are really heating up with this video:

Monday, October 11, 2010

Over 1000 Unique Visitors!

Thanks to all the dedicated readers of Cash Saving Tips. I hope that the articles have been entertaining and useful.

Tell your friends and keep on saving!

Thursday, October 7, 2010

Deal Find

There's a great new website called Deal Find. The site sells gift cards offered at a great discount. Unfortunately the deals are only for retailers around the greater Toronto area (for now...). Here are 3 examples of the past deals they've had:

1) Thai Spring Roll (Restaurant) - Regular Price $50, Coupon Price $20
60% Savings

2) East Village Yoga (Fitness) - Regular Price $280, Coupon Price $20
93% Savings

3) Toronto Cleaning Service (Cleaning) - Regular Price $75, Coupon Price $39
48% Savings

How it works (an exerpt from their webpage):
"Every day, Dealfind features something cool to buy or do at an unbeatable price. How do we get such a great price? Because we represent a large group of buyers and we can promise local businesses a certain amount of volume. Buying in bulk, as a group, you get the best deal."

I'll leave a link at the bottom of my site. Check it out and save today!

Here's a clip from another great coupon site:

Tuesday, October 5, 2010

Stick to the List!

Have you ever noticed when you go to the mall that every store is having a massive sale. What luck, you just happened to be there during a blow-out sale while you were getting a new tube of toothpaste. Coincidence? I think not. All the stores always have sale marketing campaigns to lure you in to check out their "great deals".

This happens not only at malls but at just about every retail establishment. For example, when you go to a discount garage to get your oil changed, and the next thing you know the mechanic gets you to buy the complete muffler king package. So when you head out to do some shopping keep in mind that you will be bombarded with advertising and that retailers will be constantly trying to upsell you. Being upsold is like being asked if you want to get your fries and drink supersized at McDonald's (which they don't do anymore after that documentary, "Super Size Me").

The best way to avoid being upsold and unnecessary spending is to have a grocery/shopping list in hand before you head out. Once you have a list, stick by it. While wandering through the mall you'll probably see some extra widgets, but try to stay focused and remember the reason you came in the first place. The last thing you want to do is leave the mall with a bunch of sham-wows and slap chops. Make a list and stick by it, you'll save tons by doing it!

Check out more ways to save from America's Cheapest Family:

For more day to day saving tips check out:
Start a Change Jar
What's Your Latte Factor?
To Clip or Not To Clip?
Top 7 Things You Should Not Have to Pay For
Basic Sewing Techniques
Hang Dry Your Clothes

Saturday, October 2, 2010

The Invisible Tax

This article is about that unseen tax that on average steals 2-3% of our money’s spending power each year. This tax is known as inflation. On average our money loses 2 to 3% of it’s value each year, this is mainly due to the increase in the amount of money circulating in the country. There are many other complex factors involved that influence inflation rates, but the important thing to note is that on average our money loses value. This means that in about 30 years what would have cost us a $1 (say a can of pop) will cost $10, a whopping 10 fold increase (that better be the best damned tasting pop ever!).

Inflation is also known as “The Widow’s Worse Enemy” (sorry for the sexist remark). It was given this name during World War I. During this period most men went off to fight and when they did not return their wives would be left a lump sum settlement from the government. Being that men were the main bread winners (earners) during that time the widows would have to invest their money to live off the interest. Most widows would invest in a fixed income investment (i.e. bonds) that would pay a constant interest rate each month. Widows who depended on their investments to survive saw the cost of living persistently and gradually increase each year due to inflation, while their investment income remained the same. Most widows in this situation were forced to work in old age or suffered alone in poverty.

Before we can even worry about inflation it is critical to pay off all your bad debt (Check out: Know your Debt & pay-off-debt-or-invest.html). After your debts are settled you can begin to invest (Check out: top-4-forms-of-passive-income.html). When looking for an investment you have to beat the average inflation rate. Otherwise you’re not producing any extra value with your investment. Most “high-interest” savings account offer an interest rate that is a complete joke. I believe most banks are offering something like 1%. That means that your money is losing value at 2% a year instead of 3%. Leaving your money in one of these accounts would be a bad idea. Your money has to be in some kind of investment vehicle that at the very least is beating the average inflation rate.

There will be many questions to ask yourself when examining investment options. One of the first questions you should always ask yourself is: “will my return on investment keep pace with the average inflation rate (2-3%).” Having your money in the bank is not a terrible idea. It’s a safe place to accumulate your savings, until you have a sizable sum it's difficult to make a serious investment. When your savings do grow to a large enough sum (say more than $1000 or so), then it’s time to start thinking of ways you can make that money work for you. Don’t let the invisible tax erode your spending power. Become a wise investor and kick inflation’s ass!

Check out this Rich Dad video on inflation: