From origins to budgets: Understanding the US tipping culture’s impact on expenses

After a gruelling 20-hour flight, an exhausting layover in London (which prompted a personal vow to avoid Heathrow in the future), and the ensuing battle against jet lag, I arrived in NYC. 

My energy depleted and hunger soaring, salvation arrived in the form of Uber Eats. I promptly ordered a $15 sandwich from a conveniently located Deli across the street.

However, upon completing my order and reviewing the summary, I was puzzled to find a total charge of $24.50 instead of the expected $15. Upon double-checking, I realized I had only ordered one $10 sandwich. The mystery of the extra $21.50 was unravelled:

• $5 for delivery fees,
• $1.50 for taxes,
• and a $3 tip amounted to $9.50.

Wait, what? How did it all pile up so fast? And seriously, why am I tipping for a “takeout sandwich” when nobody even served me?
And if the tips are for the driver, then what’s the deal with these extra delivery fees creeping in?

Driven by my bewilderment, I opted for a change of clothes and embarked on a brief expedition across the street to personally collect the sandwich.

Lo and behold a familiar query resurfaced – would I care to leave a tip? Without hesitation, I politely declined, firmly convinced that my initiative to walk and procure my own meal warranted a pass on tipping.

If you’ve found yourself in a similar scenario, it’s no shocker that newcomers to the USA, be they tourists, expatriates, or new immigrants, often find themselves confounded by the intricacies of the tipping culture.

What’s the deal with America’s tipping culture, you ask?

Well, it’s an intriguing journey through history. This tradition harks back to medieval times when masters would reward exceptional service from their servants with extra money. Curiously, this practice made its way to the United States from European holidays, where travellers, eager to flaunt their aristocratic tastes, began tipping upon their return.

Unsurprisingly, the notion was met with opposition from numerous diners who found it condescending and linked to divisions in social class. This was because it effectively required individuals with limited financial means to bear a greater burden of meal costs.

Consequently, on the other side of the Atlantic, in Europe, this practice was swiftly abandoned due to the prevalence of anti-tipping sentiments.

Meanwhile, tip culture in USA persisted in upholding the tradition of tipping.

Tipping culture in America – More than money, it’s table etiquette

American tipping culture transcends mere compensation for service; it’s also regarded as a form of table etiquette. The prevalence of US tipping culture has reached a point where it’s almost treated as an unspoken expectation or customary practice. Typically, tips are expected to fall within the range of 15-20%, and this is especially true for life in NYC.

This will undoubtedly have a significant impact on your overall cost of living.

Interestingly, even among Americans, there’s a growing conversation about whether the tip culture has gone too far. Regardless of personal preferences, it’s important to recognize that the US tipping culture is set to remain unchanged in the foreseeable future.

Managing the high cost of living along with the tip culture in NYC
To streamline things, I’ve adopted a strategy of including a specific percentage on top of the base amount, a trick that has certainly made the entire process more convenient for me.

However, let’s be frank – it’s not solely about the concept of tipping. The overarching concern for everyone is the daunting cost of living in the bustling heart of New York. It’s a city that’s already known for its steep expenses. Now, atop that, you’re expected to tack on an extra 20% for tips.

It’s no help that most times, relocating abroad itself comes with its own set of substantial costs. The last thing you’d want is to grapple with financial management woes.

If you’re on the hunt for some nifty strategies to navigate the labyrinth of New York’s living expenses, here’s a trove of 9 insightful tips for you.

Budgeting

Begin by crafting a thorough budget that itemizes your earnings, fixed costs (such as rent, utilities, and transportation), and variable expenditures (like entertainment, dining, and shopping).

It also provides you with a clear gauge of how much you can comfortably allocate to dining out when you’re feeling too lazy to cook. This way, you can enjoy meals outside without the looming stress of affecting your financial stability.

At the end of the day, budgeting gives you a crystal-clear insight into your financial flow and empowers you to make well-informed choices.

Preparing meals at home

Regularly dining out can strain your finances. Opting to cook at home can yield substantial savings (just take a peek at my $20 sandwich!). Strategize your meals, purchase groceries in larger quantities, and engage in batch cooking to economize on both time and money.

Accommodation

Housing is frequently the most substantial cost within New York City. Explore the possibility of residing in budget-friendly neighbourhoods beyond Manhattan, or delve into shared apartment arrangements to distribute expenses. Check out rent-stabilized apartments and equip yourself to engage in rent negotiations.

Transportation

New York boasts an extensive public transportation system that you should consider utilizing. Instead of relying solely on taxis or ride-sharing services, which can lead to accumulating expenses, opt for subways and buses.

You might find it worthwhile to think about investing in a monthly metro card that grants you unlimited rides.

As for cleanliness and safety, don’t expect it to top the chart in that department.

And if these factors are a priority for you, you might also want to contemplate walking as an alternative. New York City is well-suited for pedestrians, providing captivating sights and distinctly diverse neighbourhoods at every corner.

Entertainment

Make the most of the city’s abundant free or budget-friendly cultural happenings, museums, parks, and public venues. Seek out reduced-price tickets for Broadway shows and other attractions.

Tipping

Let’s delve into the art of appreciation – tipping! It’s like seasoning for the service industry soup, not just in the entire US but particularly in the ever-awake hub of activity, New York. Your merry band of tip-worthy folks includes the trusty waitstaff, the mixologist maestros, the road-trip wizards (cab drivers), and all those who bring joy to your service needs.

The golden rule is to sprinkle a bit of extra joy, usually 15-20% of your total bill.

However, beware of the sneaky service charge ninjas that some places might unleash – always give your bill a once-over before throwing extra sparkle on it!

Understanding service charges

In certain cases, restaurants could include a service charge on the bill, particularly for larger parties, which could potentially serve as an alternative to traditional tipping. So always double-check your bill to avoid double tipping.

Cash vs. Card

Leaving your tips in cash isn’t your only option. Choosing to settle your bills with a credit card is a viable alternative. In fact, using a credit card can be quite advantageous, as it simplifies the tracking of your overall spending. Nevertheless, it’s worth remembering that smaller establishments still tend to favour cash tips.

Delivery and takeout

Don’t be mistaken – according to the tip culture in US, tipping is definitely expected. When you choose food delivery or takeout, it’s customary to leave a tip for the delivery person. Typically, this tip ranges from 10% to 20% of the total bill.

Has the tipping culture gotten out of control?

You know, folks across the USA are kind of wondering if this whole tipping thing is getting a bit out of hand or if there’s a better way to make sure service peeps get their fair share. I mean google “tipping culture reddit” and you will find lots of conversations around this.

But for us newcomers or tourists, it’s like this secret handshake – following the local tipping traditions is our way of showing love to the hardworking service crew.

Whether we’re fans or not, it seems like the tipping groove won’t be changing anytime soon. So, our little trick? We’ve got to get smart about balancing our expenses while keeping this tipping dance in the loop.

Before you go…

Making the move to the US is a major deal. Especially with the high cost of living in NYC and the tip culture, we’re all on a mission to cut corners and save wherever we can.

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