Borrow Student Loans

This Week In Your Wallet: Burning A Hole In Your Pocket 

Jean Chatzky  |  October 15, 2019

This week we’re talking allowance. While you might have felt like a millionaire with a fresh $5 bill in your pocket at the end of each month, parents are now, on average, shelling out $30 in allowance to each of their kids on a weekly basis, according to a survey published by the American Institute of Certified Public Accountants. The New York Times broke it down for us: 80% of parents expect their kids to do work around the house in exchange for the payout, and 60% of parents hope this money will help their kids learn responsibility and the value of a dollar. While that seems great on paper, the survey concludes that only 3% of kids are saving any of that money. Ordinarily, it’s spent on  entertainment, outings with friends, or toys. 

First of all, parents, don’t stress. Your intentions are good. But, David Almonte, a member of the Institute’s Financial Literacy Commission, recommends making allowance-giving more of a “teachable moment.” Help your kids open a savings account so they have a place to put the money instead of allowing it to burn a hole in their pocket. Almonte recommends teaching them the difference between wants and needs, and helping them think of short-term and long-term goals they can save for. 

More importantly, it might be time to rethink the concept of an allowance if you’ve been paying your children for chores. Todd Yuzuriha, a co-host of “The Money JAR,” a family finance podcast sponsored by Junior Achievement, suggests that maybe jobs around the house shouldn’t be tied to an allowance. Household chores should be expected of everyone in the house, while an allowance is designed to help teach your child how to manage their money. As their allowance grows, so should the list of things that you — the parent — expect them to pay for.  The goal is that by the time they leave for college or independence, they can manage greater sums of money on their own. By separating the two, it might be easier to focus on the true desired outcomes of each. 

A 20% Tip: No Longer a Treat 

Think about the last tip you gave. If you’d post it as your Facebook status right now, I trust it was a good one. But, if you’re cringing behind your computer screen, you should know that in a new column, The Washington Post’s Michelle Singletary says you need to be tipping 20%. All the time. No matter what. Singletary admitted she used to be on the “sliding-scale” side of tippers, meaning a tip would only be as good as the service she got. 

But in America, unfortunately, we don’t tip to reward stellar service, instead, we tip to supplement our waiters’ wages, says Tim Carman, who reports on food for The Post. Take away workers’ tips, and their salaries take a steep plunge. He also asks us to think about our jobs. We get paid even when we’re having a bad day, don’t we? So why shouldn’t everyone? Servers are only human, and Carman asks us to remember that. If something’s making you unhappy, he suggests asking the server — nicely — to correct it. 

Singletary says she’ll be tipping 20% at every meal from now on, and writes, “Like it or not, tipping isn’t about me — or you. It’s simply a responsibility placed on all diners in this country. And you need to factor that in as the full cost of dining out,” she says.  As we head into the holiday season, I’d love to know how you feel about the 20% hard line — and not just in restaurants. Hair stylists? Taxis? And what about the people that you’re not sure you should be tipping at all? Send me your thoughts at and we’ll report back next week.

Packing Lunch to Save Big Bucks

We’ve heard it all before. Packing a lunch can save you tons of money, and probably some calories. Yet, we all fall victim to take-out heroes and gourmet chopped salads. Those take-out options inevitably look so much better than the crummy sandwich you made in a hurry early this morning. But, what if I told you how much money you’d really save, and put an actual number on it? A writer from Refinery29 saved $113 during her month-long experiment where she packed lunch from home every day. That may not seem like a lot, but multiply by 12, and you just saved $1356 over the course of a year. Now dump that into your 401(k) and watch it grow over time…. 

And on that note, middle-class workers have unfortunately put less money into their retirement savings this year. The main reason? The new tax law.  Many people got lower refunds than in the past, and wound up feeling like they couldn’t afford to put as much into their retirement funds. Also, with fears of a recession brewing, many — mainly millennials — are taking some of the money they typically set aside for retirement and putting it into an emergency savings account instead. And while emergency funds can be a very, very good thing (having six months’ worth of living expenses is ideal) you need to remember the importance of paying your future self first — which is where retirement savings come in. So if you skimped in 2019, try to get things kicked back into gear in 2020. 

When Paying Down Student Debt = Saving For Retirement 

As of 2018, two-thirds of students were taking on student debt, according to an annual report from the nonprofit group the Institute for College Access & Success. And the amount each student is taking in loans is rising — on average, almost $30,000 —  up 2% from 2017. While this number is “concerning,” says Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, some companies are actively helping their student debt-burdened employees save for retirement. Companies including Abbott Laboratories, Travelers Co., and Raytheon Co., are matching the dollar value students put toward their loan debt and are putting it into a 401(k) so they don’t fall behind in retirement savings, according to a piece in this week’s Wall Street Journal. Kudos to them.  Let’s hope more join their ranks — and soon. 

Have a great week, 


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