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'Tis the season for giving—and that includes tips to your housekeeper, doorman, babysitter and the other service providers who make your life easier. But with inflation taking a bite out of your budget, you may need to cut your spending this holiday season. Fortunately, there are ways to thank deserving people while keeping your costs in check. To budget for holiday tips, determine who you need to tip, how much and, if cash is tight, whether an alternative such as a small gift might work.
Who to Tip and How Much
When thinking about who to tip, start by listing the people who regularly provide you with services. This could range from your mail carrier and gardener to your hairdresser or dog walker. As you create your list and determine your tip amounts, Emily Post suggests considering:
- How often the person provides a service
- The quality of the service
- Your relationship
- What's customary in your area
- Whether you already tip the person in the course of service. For example, if you normally tip your hairdresser, you don't need to give a holiday tip; give a small gift instead.
Here are some people you may want to tip at the holidays and guidelines for how much to tip.
- Live-in help: Cash gift of one week to one month's pay and a gift
- Child's teacher: Gift card
- Babysitter: Cash gift up to an average night's pay and a small gift from the child
- Au pair or nanny: Cash gift of one week's pay and a small gift from the child
- Day care worker: Cash gift of $25 to $70 for those who work directly with your child, plus a small gift from the child
- Housecleaner: Cash gift of up to one week's pay
- Gardener: Cash gift of $20 to $50 or a gift
- Pool cleaner: Cash gift up to the cost of one service
- Building superintendent: Cash gift of $20 to $100 or a gift
- Doorman: Cash gift of $15 to $100 ($15 each if there are multiple doormen) or a gift
- Newspaper carrier: Cash gift of $10 to $30 or a gift
- Dog groomer: Cash gift up to the cost of one grooming or a gift
- Dog walker: Cash gift up to one week's pay or a gift
- Nursing home or assisted living staff: Do not give cash. Give a small gift or a group gift, such as food the staff can share.
- Hairdresser/barber: Cash gift up to the cost of one haircut or a gift
- Personal trainer/fitness instructor: Cash gift up to the price of one session or a gift
- Manicurist: Cash gift up to the cost of one service or a gift
- Massage therapist: Cash gift up to the cost of one service or a gift
- Trash collectors: For private companies, a cash gift of $10 to $30 per person; for municipal workers, check regulations regarding gifts.
- Mail carrier: U.S. Postal Service workers cannot accept cash gifts or gift cards but can accept gifts valued at $20 or less.
- Delivery drivers: FedEx drivers can accept gifts worth $75 but can't accept cash or gift cards. UPS discourages tipping. Consider gifts such as bottled water, baked goods or snacks drivers can eat on the road.
Some Tips on Tipping
Make the most of your tips by following these guidelines.
- Presentation matters. When giving cash, visit the bank to get crisp, new bills. Tuck the cash inside a holiday card, and always include a handwritten note of appreciation.
- Know the rules. Government employees are generally prohibited from accepting gifts, and some private companies restrict gratuities as well. For example, nursing homes and home health staffing agencies typically forbid tipping staff. Schools often discourage cash gifts to teachers, which could be seen as bribery. If in doubt, check the employer's policies.
- Don't tip business owners. If the owner of the nail salon does your weekly manicure, give them a gift.
- Tip early. Tip around Thanksgiving or early December so the recipient can use the money for holiday shopping.
How to Tip When Money Is Tight
Tipping everyone on your list could cost hundreds of dollars. If you're rethinking your tipping strategy to save money this year, try these ideas.
- Pare down the number of people. Focus your tip budget on the people who matter most. For instance, you might skip a person you only see a few times a year, but not the doorman you see every day.
- Scale down spending. Don't want to drop anyone from your list? Then reduce the amount you give. Something is better than nothing, even if $5 is all you can manage this year.
- Go for a group gift. Chipping in with other parents for a group gift to a teacher can give you more bang for your buck. You can also cut costs by giving one gift that a group of people can share, such as a box of candy for nursing home staff.
- Try treats. Baked goods are always appreciated and can be an affordable alternative to tipping or purchasing gifts.
- Give the gift of praise. If you can't tip, send the person's employer a letter complimenting their work. You can also write a glowing online review of the person's business, tout them on social media or refer friends to them.
Keep Your Holiday Budget in Mind
Including tips in your holiday budget can help ensure that you don't spend beyond your means. Don't have a holiday budget? Look back at what you spent last year to arrive at a rough amount. Here are some tips if you need to generate extra cash for the holidays:
- Look for ways to reduce your expenses. For example, cancel unused subscriptions or memberships, eat out less often, refinance debt or transfer high-interest credit card debt to a balance transfer card.
- Try a no-spend challenge to boost your holiday fund fast.
- Look for unused items around the house you can sell online.
- Find a short-term side hustle such as rideshare driving or working retail. Plenty of companies hire temporary workers during the holiday season.
Clever use of credit cards can cut the cost of holiday gifts. For example, some cash back credit cards let you use your cash back to purchase gift cards. You could also get a credit card that offers a welcome bonus for spending a certain amount within a set period. Use the card to buy gift cards for a lot of service providers and you could qualify for the bonus, which might even cancel out the cost of the gift cards—as long as you pay off the balance before interest accrues.
Stay in Control of Your Holiday Spending
Generosity can spur you to go over budget at the holidays, but racking up high credit card balances can hurt your credit score. Plan ahead and stick to your budget to help ensure a happy New Year—one free of credit card interest. Signing up for free credit monitoring from Experian can help keep your spending in check. You'll get alerts of spending increases and decreases, potential identity theft and other factors that might affect your credit score.