How much should you tip? And other questions.

In 1992, during the Barcelona Olympics (where the greatest basketball team of all time was assembled), Seinfeld began its fourth season with a two-part opening called “The Trip.” Like almost all Seinfeld episodes, there’s no point in me trying to recap what happens in those two parts–it’s a show about nothing!–but basically Jerry and George go out to Hollywood so Jerry can be on The Tonight Show, and so George can tag along for no reason. While there, they look for their friend Kramer, who somehow becomes implicated in a string of serial killings by someone nicknamed the Smog Strangler.

At one point in the second of the two parts, George and Jerry are in the back of a cop car with the guy who later turns out to be the actual Smog Strangler, and Jerry and he get into an argument about how much is appropriate to tip a hotel housekeeper. The Smog Strangler advocates for five bucks a night while Jerry insists that a dollar–“Two, tops!”–is more than sufficient.

This is not the time or the place to get into the problems with the tipping economy in general, but it’s an interesting question to consider! How much should you tip?

The questions don’t stop there, unfortunately. How much should you spend on food? Of that, how much should be for groceries so you can cook at home, and how much should be for eating out? How much should you spend on your children’s education? How much should you spend on clothes? How much should you spend on vacations? How much should you spend on a gym membership? How much should you spend on a house? How much should you spend on golf? How much should you spend on that wedding present?  How much should you spend on cars?

And we haven’t even gotten to giving and saving yet (which arguably should be the places to start).

Money is hard! It’s hard because it’s walking around masquerading as some nuance-less number with very little meaning while actually being nearly the opposite. Money is–simply, and yet with a great deal of complexity–the quantitative output of our emotional and behavioral reality. Money is the medium of exchange, and when we exchange one thing for another–when we value the thing we get more than the money we give, or when we value the money we keep more than what we could purchase with it–we are communicating to ourselves and others what we find to be most important in the world.

Which means that the entire practice of financial planning stems from two fundamental questions:

  1. What is it that you find to be most important in this world?
  2. Are you prioritizing your emotional and behavioral decisions to align with what you find to be most important?

Those questions are not about money. You will not find the answers on CNBC or in The Wall Street Journal or on the Bogleheads message board. You will find them with some introspection, meaningful conversation with those closest to you, and hopefully, a financial planner who realizes their job is built on those questions.

It’s not that the lifelong process of answering those two fundamental questions magically makes the other ones disappear. You still have to live in the world and make decisions! And some of those decisions can be really complicated. But they begin to have clarity, you begin to have more fun making them, and you start to feel less worry and guilt and more peace and freedom as you see your money at work.

After all, your money at work is really you at work. Make it matter.

Jared Korver
[email protected]

A product of small-town North Carolina (Carthage, to be exact), I’m proudly married to my best friend and co-adventurer, Amy. Together, we have two sons–Miles and Charlie–and could more or less start a library from our home. I love being outside, can’t read enough, am in the habit of writing haikus, and find food and coffee to be among life’s greatest treasures.