Thursday, April 26, 2018

Coach Teens To Leave a Tip Cushion On Their Cards

Restaurant bill with embarrassing emoji.

Here’s a restaurant riddle for you:

Your teen takes a date to a restaurant. The bill comes for $40. Your teen’s prepaid card has a current balance of $47. Your teen hands the card and the bill to the waiter intending to pay a total of $46 with tip included. The waiter returns with the card and informs your teen that it has been declined. Embarrassment ensues.

Why was the card declined for insufficient funds? After all, there was clearly enough on the card to cover $46.


When your teen hands over the bill, the restaurant doesn’t know what the final tip will be. Naturally, they’d like to make sure your teen can leave a nice one. After all, their service was impeccable! So, the restaurant preauthorizes the purchase for the amount plus a generous anticipated tip.

Unfortunately, the restaurant’s anticipated tip (likely 20%) is more than your teen intends to leave. So, the restaurant’s anticipated total of $48 ends up exceeding the $47 on the card, and the preauthorization attempt fails.

The bottom line: teens need to be coached to leave a healthy tip cushion on their cards.

20% should be enough, but maybe 25% just to be safe. That way, the preauthorization with the restaurant’s aspirational tip will sail through, and the waiter will return with the bill sans the humiliation.

Then your teen can write the actual tip on the restaurant’s copy of the receipt. Later, when the restaurant finalizes or “settles” the bill, they’ll adjust the total transaction amount to reflect the actual tip amount. Your teen’s prepaid card balance will be restored accordingly.

Here’s an example of the proper sequence for a $40 restaurant bill charged to a prepaid card with a $50 balance. Watch how the balance adjusts at the end.

Step Card
1. The bill arrives showing the meal costs $40. $50.00
2. Teen hands bill and card to waiter. $50.00
3. Waiter preauthorizes card for $48.00, tacking on $8 (20%) to account for expected tip. $2.00
4. Waiter returns bill and card to table. $2.00
5. Teen writes in a tip amount of $6 (15%). $2.00
6. Restaurant settles bill for adjusted amount of $46. $4.00

So, spare your teens some embarrassment and maybe even some compensatory dish washing duties at the restaurant. Clue them in on the need to keep a safe tip cushion on their cards when dining out.

P.S. Running your prepaid card near empty can be a real problem at the gas station too, where you’ll often see a $75 preauthorization at the pump, even if you only intend to fill up for $20. Yet another reason to teach your teens to keep a hefty balance buffer on their prepaid cards.

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Tuesday, April 10, 2018

Keep Up The Good Fight With Kids And Chores

Are you struggling in the parenting trenches right now? Battling to convince your kids to do chores regularly, or to save patiently, or to give thoughtfully?

This excerpt from my conversation with Andy Hill on his Marriage, Kids and Money Show might give you some solace.

Andy: Some people are listening right now, and they’re saying:

“This is all well and good. It sounds like you guys have some kids that really want to help out. I haven’t even started asking my kids to contribute around the house. Where would I even start?

What would you say to that person?

Bill: So, first of all, let me disabuse you of the notion that my kids wanted to help out. I think what is really interesting and fun — now that most of my kids are in their twenties — is you realize that the good fight was worth it.

In other words, you think they’re not listening to you. You think the fact that they don’t pick up their clothes for the thousandth time is because you’re a crummy parent. You couldn’t convince them that work was important or to pull their own weight for the family.

Then they grow up and move away, and you start seeing the fruits of your labor.

Sometimes the messages are all getting through. They’re just not prepared or ready or mature enough to receive them. And then when they go out in the world and learn a little bit of what the world is about, you realize that all the messages are still floating around in there, and they start to land. And it’s really gratifying.

My kids wouldn’t leap to give money. Or, they wouldn’t leap to save. Or, any of those things necessarily. Sometimes they did. Sometimes they didn’t. They were normal, good kids. Good kids are going to act out every once in a while.

Being a parent is so humbling. I didn’t realize how stupid I was until I had kids. If I saw a kid acting out, my first reaction before I was a parent was:

“What’s wrong with that kid’s parents?”

And then, it turned out, I was the volunteer soccer coach whose kid was lying down in the middle of the field, pounding the grass, swearing at the referee.

“Hey coach, whose kid is that?”
“Uh, that would be mine...”

And, now, that particular kid? (I’m not going to name any names, I’ve got 5 so I can hide it among them) He is one of the most thoughtful, caring individuals. (OK, I’ll give it away: he’s a dad now too.)

So, keep up the good fight. And keep with the consistent messaging — even if you don’t see the immediate results. I bet if you’re consistent with your messaging and you’re consistent with your efforts, you’ll see the long term results.

And there’s no reason not to hedge your bets anyway. So stick with it.

Andy: That makes me feel good for someone who’s in the trenches of it right now.

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