I feel old when I say this, but “back in the day” (when I was about 5) the only people who expected to be tipped were taxi drivers, waiters/waitresses and hairdressers. I guess hotel busboys too, but we never used them when I was growing up. But now it seems as though every other industry is trying to stick their hand in the proverbial jar. The pizza place next to where I work offers a tip section on their receipts, even though I walk in, I order my pizza and I come back in 15 minutes. Is that so deserving of some cash for the extra effort they put in? What happened to people accepting their salary? This one I at least attributed to the fact that it may be a system in place for delivery drivers.

Last night though, I went to the Booster Juice in the local mall and paid debit, and it asked me if I wanted to leave a tip. I’m already paying $3 for my snack size drink, so no, I do not want to leave a tip. This is why workers are paid a wage: to do their jobs.

I really don’t understand when the mentality became that not only should we be paying for a product, but we should tip virtually every worker we come across. It’s up to the business owner to pay them a fair wage which renders them good workers.  That cost should be included in the price; I shouldn’t be expected to tip them another couple of bucks!

I by all means support workers being paid a fair wage. I’m pleased when the minimum wage is increased and I always tip well when I have been rendered a good service (generally 25% or so at restaurants and hairdressers), but I don’t believe as consumers we should be guilt tripped into tipping absolutely every worker we come across.

Maybe I’ve just been ignorant, but I’ve seen more and more companies trying to guilt me into tipping. Why can’t we be like the countries on other continents, where they don’t have tipping at all? I’d be glared at less by some poor kid who’s unhappy that I’m not going to pad his salary as he makes my smoothie.

Popularity: 14% [?]

I’ve been an avid traveler for most of my life. I took my first plane trip when I was 6 months old, across the Atlantic to France, where my mom grew up and all of her family lives. Since then, I’ve been to most of Western Europe and Australia, and plan to eventually do a trip to Asia. Now, at 19 years old I’m planning on moving to Australia in May, and I thought that in the spirit of the trip I would reveal some of the frugal tips I learned in my years around the world:

1. Plan early. Plan very early! I am an impulse traveler. Last Sunday a friend of mine and I went to New York on literally one hour’s notice. However, when it comes to travel, planning early can save you a ton of cash. The discount airliners in Europe (such as RyanAir and EasyJet) will give you a bigger discount if you book early: in 2003, my parents booked a flight from Paris to Liverpool almost a year in advance, and it cost a mere 50 pence! Of course, we also had to pay 30 pounds in taxes, but it was still an extremely cheap flight. Book in advance and you’ll save some cash on flights.

2. Get your cash before you leave. Your local bank has much better exchange prices than mall kiosks and airports, no matter where you’re going. Order your cash at least two weeks before you leave, because even if you’re going to Mexico, there’s a good chance your bank won’t have Pesos on hand. They’ll have to be ordered and while they normally only take three or four business days to come in, it’s best to be on the safe side. At the bank I work at we don’t carry Euros on a regular basis and never have more than around 700 and the number of people who come in to try and buy some the day before their flight is absolutely phenomenal. Give yourself time and you’ll have a lower stress level as well.

3. When in Rome… We all complain about gas prices over here, but ours are nothing compared to the rest of the world. Renting a car is expensive, paying for gas is worse. Then you haven’t even factored in the fact that even taxi drivers in New York have absolutely nothing on European drivers. There’s a reason most Europeans take the subways and the train: they work. It’s relatively easy to find your way around all of the major city’s subway stations to find your end target. It will save you huge amounts of time and money, and there’s always that extra bonus of being able to tell your friends you experienced the “true” culture of London and Paris by traveling like the locals.

4. Bring your debit card. This isn’t so much a frugality tip as it is a safety one, but it’s important to mention. In 2003 my family was on a random island in Northern Norway when we ran out of cash. The ferry off the island only took cash, so when we spotted an ATM machine, my mom tried putting her Canadian debit card in and we were able to get cash. It’s important to keep your debit card on your for emergencies like that. Also, withdrawing directly from your chequings is a much better option than doing a cash advance.

5. Get local 800 numbers. When you’re outside of North America (or wherever you normally reside), 800 numbers don’t work. Make sure to get the local numbers for your credit card company, your health insurance provider and your bank. In case your cards are compromised while you’re overseas you’ll be able to contact them immediately and prevent losses. On the same note, call your credit card company and bank and make sure they know you’ll be overseas to avoid having your card frozen.

6. Make sure you have zipped (or buttonable) pockets.  As safe as you might feel walking through the cities in your own country, you need to remember that you’re not at home. Ladies, make sure your purse is zipped up with nothing exposed, and men be sure to carry your wallets and other important items in something closeable as well. Pickpockets are extremely common in most major cities in Europe, Asia and South America. Avoid this potential emergency by ensuring that everything you need is kept safe and on your person at all times. Being careless can cost you hundreds of dollars and a lot of stress!

7.  If you withdraw cash from an ATM, withdraw a lot. My card charges me $5 every time I withdraw money from an international ATM machine. This fee stays the same no matter how much I withdraw. As such, being as frugal as I am, I always withdraw as much as I possiby can in one shot. This can save you a significant amount of money if you use a lot of cash.

8. Get a money belt. Yes, they look lame. Yes, if you’re traveling with friends they will make fun of you. However, they will keep your cash, as well as any other items you carry with you, safe. When I went to Australia for the first time my mom bought me a money belt and as soon as I left her at the airport I took it off, never to wear it again. That was all good and fine until my passport fell out of my purse on the plane on the way back, and I found myself in Los Angeles airport, going through customs, without having a passport. A stewardess found it on the plane and brought it to me, but a money belt would have saved all sorts of problems.

9. If you go to an internet cafe, always change all of your passwords after. A HUGE number of internet cafes have keyloggers installed, and if you want your information to be safe, don’t log in at all, or change your passwords as soon as you can for everything you have accessed. Do not under any circumstances log in to online banking. This is why you have the phone numbers written down: so that you can call to find out this information. It’s much safer this way.

10. Quite frankly, there is no number 10, but it made the alliteration in the title work. I’ll finish off with some random tips: if you’re planning your trip last minute, find a good hotel deal with Wotif.com. Always be at the airport 3 hours before an international flight, especially if you’re flying Air Canada. Most importantly, planning ahead means you’ll have much more fun on your trip!!

Popularity: 36% [?]

Last week I gave you a list of things that under FICO 08 can help increase your credit score. There’s also a number of things that can hurt your credit score significantly more, however. You need to make sure NOW that under FICO 08 your score won’t drop. Here are a few things that many of us do today which will result in a lower score under FICO 08. For the sake of your credit score, do your best to avoid the following:

• Making late payments. In the past, one late payment could lower your score 100 points. Now, one late payment won’t hurt you as much, but regularly missing payments will hurt your score more. Do your best to make as many payments as you possibly can on time, or you will see a drop in your score.
• Using most of your available credit. Using more of your available credit will do more harm to your credit under the new system. Now that under FICO 08 your score will be hurt less by applying for credit, a good way to avoid this is to try and get some new credit. This will increase your available credit and prevent your score from dropping because you’ve used too much of your available credit.
• Getting fined. This isn’t really related to FICO 08 directly, but having parking tickets and other fines show up on credit reports is becoming increasingly common. Pay your fines on time before you see them on your report!
• Closing your credit cards. Even if you cut them up, don’t close the accounts. Having open accounts will prevent your score from dropping as it shows you have available credit, and it increases the length of your credit history. Using old cards from time to time is important under FICO 08, but you definitely should not close them!
• Only use credit cards. You need to have both revolving and fixed credit (ie. a car loan) to be seen as being diversified under FICO 08. If all you have credit-wise is cards, your score will suffer.

By avoiding the above mistakes, you can be ahead of the curve of FICO 08 and keep your credit score from falling under the new system. Be proactive when it comes to your credit - take care now to make sure that when your score is based on FICO 08 your credit rating won’t drop a few levels.

Popularity: 34% [?]

As I plan my upcoming move across the world to be with my fiancee in Australia, I do have some things to research. One of those things is banking. As I’ve written in the past, I think not using a cash back credit card is a waste of money, so I decided I was going to see what Australia offered before I actually arrive in the country.

So, this morning, I looked at the website of one of Australia’s big 4 banks, St. George. I go to their credit card selector, where I’m given three options: reward cards, no annual fee and low interest rate cards. Naturally, I pick the first one.

However, this is the text I was faced with:

Choosing the right credit card

A card with rewards

Think Again!

Reward schemes generally offer the promise of future benefits for a higher up-front cost.

To earn a $100 gift voucher on an average rewards card it would cost you over $16,000 in purchases*.

For this reason, St.George Bank does not offer a rewards scheme, but prefers to provide a range of low rate credit cards.

See our range of Low Rate Credit Cards.

I was stunned! I could believe it if they told me “we don’t offer rewards cards at this time”, but to tell me to “think again” about my choice and that I should go with a low rate card?? I pay my balances off every month, I couldn’t care less what my interest rate is. Working for the bank I do now, I could have gotten a card at about 5% interest, but decided to get the cash back card at the full rate.

Whoever decided to basically call the people who want a rewards card financial idiots was absolutely beyond me. Whoever came up with that text, as well as everyone involved in the approval process should never be allowed to work in any sort of marketing job again, ever. (Alright, so I don’t mean that, I’m just absolutely shocked that they would actually write that on their website!)

Just because of that I can guarantee that I will never be a customer of St. George bank when I move to Australia. I know it’s stupid and I know it’s petty, but the fact that they told me to “think again” because I want a rewards card just does not stick well with me at all. That’s not the type of bank I want to deal with.

Popularity: 28% [?]

With the weekend approaching, I thought I would leave you all with some of the highlights of the personal finance blogosphere for the week:

Frugal Trader from Million Dollar Journey lets us know that Questrade has improved its commission strcuture (for Canadian investors).

David from Money Ning appeals to the human reasons for buying a home.

Money Smart Life reminisces on traveling to Europe when the US dollar was more valuable.

JD from Get Rich Slowly gives us some tips from Erin Burt about getting over our fears of investing.

And finally, thanks to Blain from Stock Trading to Go for including The Penny Mine in this week’s Carnival of Personal Finance.

Have a great weekend everybody!

Popularity: 14% [?]

Real Estate Investment Trusts, or REITs, are becoming a more popular investment these days for people looking for an alternate source of dividend income. In order to qualify as an REIT, a company must pay out at least 90% of its taxable income to investors. This prevents the trusts from having to pay corporate income tax. This allows investors to invest in these funds as though they themselves owned the property.

It is a great way for people to invest in Real Estate without actually owning a few properties themselves. In Canada, RioCan is one of the largest Real Estate Investment Trusts around. One of the strip malls in your area is probably owned by them. There are three main types of REITs:

1. Equity REITs: These companies purchase properties such as houses, apartment complexes and commercial buildings and lease them to companies in order to generate a cash flow. This is what most people think of when told about Real Estate Investment Trusts. They function much in the same way as individual Real Estate investors, but on a much larger scale.
2.  Mortgage REITs: This form of Real Estate Investment Trusts invest in mortgage securities. These companies invest in long term bonds by using short term funds, and make money from the differences in yields. These companies make a lot of money when times are good, but as soon as that yield curve flattens, or decreases, they lose money. These are much riskier investments, and not a good option in today’s market.
3. Hybrid REITs: As the name suggests, these are Real Estate Investment Trusts which hold a combination of Mortgage and Equity REIT investments.

Real Estate Investment Trusts generally make for a good investment, as does Real Estate in general. Dividend income is relatively stable (as would rent be if you owned an individual investment property). If you’re looking to a good alternative for dividends from a different source than stocks, I would suggest looking into a well-managed Real Estate Investment Trust.  However, I would stay away from Mortgage REITs for the time being, until the yeild curve increases favourably and the market in the United States stabilizes. Invest only in Equity REITs for the time being, unless you have a very high tolerance for risk.

Popularity: 16% [?]