Financial Literacy To Tip or Not to Tip: Living in the US

October 6, 2023
By Thomas Sharrock

In my first few hours after arriving in the United States, it was clear that prices and customs were very different to home. International students, regardless of where they call home, often find it overwhelming to adapt to new costs and a new financial culture, not to mention all the other challenges they're facing in their move to campus. I traveled to Philadelphia from my home in Winchester, England, and I had never been to the USA before. Let me tell you some of the things that confused me most…

Small things, like the cost of a bag of chips (or crisps, as we call them in the UK), are different whereas I’m used to paying no more than $1.20, here it’s more like $4.50. It took me a while to adjust to how expensive food tends to be, and I have recently started trying more local dishes instead of only seeking out my favourite food, where ingredients are more niche in the US, and therefore food is more expensive to buy. That said, Philly has an incredible food scene, and whenever I have the opportunity to make the most of that (like restaurant week), I definitely jump at it.

Let’s address the elephant in the room – tipping culture. The first time a barista asked me how much I was going to tip for my coffee, I was slightly taken aback. You might have been, too, if you don’t come from a country with a similar culture! The tipping culture in the US is unique from every other country I’ve visited, and it is something I am still adapting to. Ultimately, tipping is still a personal choice and everybody should tip the amount that they feel most comfortable giving. It’s especially important to remember to leave a tip at a restaurant or bar; I remember getting a drink last semester, and when I didn’t leave a tip, the bartender angrily scrunched up the receipt and told me not to go back there because they “worked for tips.” This experience was an exception, but nonetheless, I learned to always factor a tip into how much I expect to spend on a meal out! It’s also difficult to know how much is appropriate to leave. In my experience, anywhere between 10% and 20% is appropriate – however, it is apparently typical to tip 20% on average (thanks to my boss for pointing this out…)! This is something that you can scale based on your experience. If, like me, you don’t feel comfortable leaving a tip at Starbucks (for example), there’s no reason to feel like that’s inappropriate – just expect the occasional side-eye from the barista! At the end of the day, the tipping screens are becoming increasingly common in unexpected places, and it's your personal choice.

Generally, most of the shocks tend to come from things being more expensive than I’m used to. In the UK, VAT (sales tax) is included in the cost of items at a store – I find it harder in the US to walk around the store and calculate a running total in my head since tax is added at the register. After a while, the experience has come to feel less bizarre. One last word on things that are more expensive; phone plans! Back home, I pay about $22 for a better plan than the one which I pay $45 for here. This is definitely a cost to prepare for, and I’d suggest shopping around for the best deal.

Turning to the positives, though, the US is great for rewards. You can sign up for a CVS ExtraCare card, earn Amtrak points, and so much more. The rewards available on credit cards in the US are also uniquely superior to anywhere else I’ve experienced – if you plan on staying in the US, or even just want to make the most out of what’s available to you, then opening a credit card could be a great option for you!

In the meantime, there are still unexpected costs which I come across every now and then. I have created my own emergency fund in case one of these things becomes too much – for example, health insurance, which is not something that exists in the same way for me back home! I have valued finding people who I trust and learning from their experiences. And you can always come and speak to me or another Peer Educator at Financial Wellness too!