Color of Money Live: Should you split the check?

Aug 22, 2019

Welcome to a weekly discussion about your money hosted by Michelle Singletary, nationally syndicated personal finance columnist for The Washington Post.

You can submit your questions or comments by using the ‘ask now’ link. Although this isn’t required, I would like to know your pronoun as well as your city and state.

Why? I will often address an unanswered question in a future column. Knowing a little more about you helps me tailor my answer. Thank you!

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Read & share Michelle Singletary’s Color of Money Column on Wednesdays and Sundays.

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Thank you so much for joining me today. I just love the time I have to chat with you live.

So, going forward I would like to know a little more about you. You don't have to include your name. But tell me where you live or what pronoun you like. Why? If I can't get to your question, I may answer it in a column. Knowing a little more about you helps me tailor my answers. 

Thanks. 

So lets get started. 

I decided to do a financial check up and realized the interest rate for an account I set up a while ago was 0.03% (that is not a typo). I researched different ways to invest funds and today I set up a new IRA account! I felt dumb for not realizing this sooner, and then I worried I was going to make another dumb decision, but I did my homework and have a huge sense of relief now. Hope this encourages someone else to do a financial checkup, even if they are scared.

Good for you. I realized something similar in one of my retirement accounts. It's easy to miss things when you are doing life. So, don't beat yourself up, just make the change. 

I'm ISO your words of wisdom about how to navigate a common occurrence - splitting the check. I'm well off financially but it bugs me to split the check at a restaurant since I often find myself paying double what I ordered. I have no qualms splitting the check when the costs are roughly on par - if someone gets a $15 drink and I don't, I'm OK paying for half their drink, for example. I don't consider myself a cheapskate and I usually treat when I'm in a much better financial position than a friend. This issue comes up regularly. I have a regular lunch with friends who don't have to watch what they spend. I doubt they intend to have others subsidize - they probably don't think about it or figure it all evens out. Except that it doesn't. Last time my lunch was $14 total while the most expensive lunch was $40, a big spread and splitting the check four ways came to $30 each. Before that I paid $60 when I my order was around half or less. Once I went to dinner with one of these friends, all lovely people, and her total was about $70 while mine was around $25 (she orders high call martinis.) The server asked if we wanted separate checks and my friend said no, that reminded her of college. In that case I said, actually that'd be great, and as nicely as I could told my friend my tab and hers, explaining I'd ordered off the happy hour menu. I felt terrible as she seemed distressed, saying she didn't realize her total was so high. It feels like a lose/lose - appear cheap (while wealthy) and make everyone uncomfortable asking for a separate check, at least for me, or keep paying far more than my share. Or I guess I could order more than I want just to even the cost. Should I continue to stay mum to spare the awkwardness? I'm sure my friends would be floored if I ever bring this subject up, though they know I am frugal. It's not just this regular lunch, this happens on the regular. Fingers crossed you'll have a lovely way of handing this situation!

I love this post. In fact, I think I need to revisit this in a column. I wrote about it years ago.

Here's the column: Don't Meet Frugality With Hostility

 I have no problem letting the server or my friends know I would like a separate check. This is especially the case when I'm dining with a large group. I am very careful about what I order and how much I spend. And it's not because I don't have the money. I just would rather spend it on something else. Plus, I hate subsidizing people who order multiple alcoholic drinks, appetizers, etc. Then they are the first to say, "Let's split the check." 

I am not the one. Don't even try it!

I think you should speak up. It bothers you so don't be afraid to share your feelings. And if friends are bothered by how you want to handle your money that's their issue not yours.

What do you guys think? 

We are looking at retirement and the stock market. We heed investment advice with an understanding of our unique situation. Do you have a Pension? House with a mortgage? Debt lingering ? Car payment/lease? 401k - Is it your sole source of income except for Social Security? Health Issues / Medications? Family/Parents who depend on you in emergencies or regularly? Do you live below your means? We look at these questions and then decide what to do with our money. Each person's situation is not IDENTICAL to your situation.

Exactly. Listen and learn and then figure out what works for you. 

Read: Fearful of an impending recession? Here’s what you need to know if you’re near retirement or retired.

 

 

After we paid off our mortgage, we still pay 1/3 monthly in property taxes. But that leaves 2/3 of what we were paying to do with what we want (we both still work). If you're one of those people who enjoy playing with money, keep your mortgage. Me, I'd rather think about something else.

Me, I rather be debt free too!

Read: Yes, you should pay off your mortgage before retiring.

We had a windfall before our first child was born and opened a 529 plan for her with a large initial investment. We had a second child many years later, but don't have the money to make a large deposit. The inequity has been looming over us for a couple of years now. Any suggestions on how to be fair to kiddo #2? Should I transfer some from #1 to #2 now before they are old enough to be thinking of 529s? (Should I submit this question to the parenting chat??!?!)

Run the numbers. First figure out if you are actually behind in saving for kid #2. It also could be that with that large investment for kid #1 you don't need to put in any more money. So whatever funds you might have contributed for both you could direct to kid #2. 

There's also this. It just may be that they will be treated differently. The second child may not have as many choices as the first. That's life. 

Still, you can equalize things by managing their expectations now. For example, you might let them both know you can only afford for them to go to a school in-state unless they both get enough free money to attend out-of-state. They both may have to commute rather than live on campus. 

If it were me, I would treat the totality of the money available for college as one large pot (You actually can transfer money between beneficiaries). One child may want to stay on campus but the other is fine with commuting. So then you apply the funds accordingly. The most important thing is to get a handle on how much you need at a minimum (tuition and fees) and how much you can add to the 529 plans from your income or any other bonus money so that you can eliminate the need to borrow or greatly minimize it. 

I eat out occasionally with a group of friends, all in our 60's, some retired, some still working. We always ask for separate checks. No one is offended

We have a group of four couples, including my husband and myself, and we always ask the server before we order to divide the checks by couples. Now, there are some times when they policy is not to do separate checks. In those cases we still figure out what each couple ordered. Or, we press the management to allow us to split the check. 

The thing is no one is offended. And often we end up sharing appetizers even if the cost ends up on someone else's check. 

Good friends can work this out without hurt feelings or resorting to calling someone cheap in a negative manner.

But if someone is constantly snippy about your wanting a separate check, well, that's a not-eating-out-with-you friend. 

Hi! I've been fairly low income for all of my working life, and, as such, have also been generally financially conservative and thrifty. (No debt aside from mortgage! Crappy car paid for in cash! Vacations involve a tent! Home is a duplex - get a tenant to pay the mortgage! Second hand purchases! Fully fund the IRA no matter what! etc.) I've had a windfall (inheritance), some of which I recently spent to pay off my mortgage. (I could have invested it, and perhaps done "better," but part of my emergency strategy is NOT HAVING A MORTGAGE.) Some of the windfall is an inherited IRA which I will likely just leave be, and use the RMD for some much needed home repairs. But some will be liquid cash. I'm also engaged to someone who earns a very healthy salary, and who has some stock benefits that will be vesting soon. He, however, is not as savvy as I am. That'll be my job. I am at a loss as to how to find someone to advise me with these items who will not have at least SOME sort of self interest. Do I invest in stocks/bonds? Do I buy an investment property? (Would a CFP would recommend that, even if it was the best choice?) Some of both? Something else? How do I best refigure my new financial status? I don't know where to start, and having any extra money what-so-ever is a brand new for me. I guess the most important question here is to how to best find quality WHOLLY unbiased help. (I'm 51, FWIW. And yes, the talk of recession gives me pause, though I think I know well enough to not look and just leave my IRA alone. It's in one of those "retire by thus and such year" type funds, which I think automatically reallocates things the closer you get to the chosen retirement year. Need to check the inherited one, though.) Thank you for sharing your expertise.

Get thee to a fee-only financial planner. Ask for recommendation from friends, co-workers. Make sure you are clear you want advice and not a sales pitch. There are some good folks out there who can help you figure out what to do. Try the Garrett Planning Network or search the database at the fee-only association, National Association of Personal Financial Advisors (NAPFA)

Here's a good article on finding a fee-only planner

What You Need to Know About Fee-Only Financial Advisors

Re: the question above of inequitable 529 plan distribution ... The rules for application of money from a 529 plan are quite liberal. There's no reason the money in the initially established account can't also be used for the sibling.

That's right. Thanks. 

I, too, am often on the low end of group restaurant tabs and for that reason, after being burned in the past, I am not shy about asking for a separate check. But I always say, "Separate check, please ... that makes it easier than dividing it up and figuring out my share." Not the whole truth, but it works to get a separate check without appearing too "frugal." (When did frugal become a bad word, anyway?)

Frugal is not a bad word at all. Miser, yes. But asking for a separate check does not mean you are a miser. 

My tips

-- Ask for the separate check before you order. -- Don't make a big deal about asking for a separate check. I like what you say, "May, I please have a separate check." 

-- Ask for yourself. You don't have to include the rest of the party. Let them figure it out and hopefully they will follow your lead.

-- If someone squawks or tries to "make" you feel like you are being "cheap" ignore the comment. You do not have to justify to anyone how you spend your money. 

-- If someone says, "Oh, I'm sure we can figure out who ate what so we don't need a separate check," shut that down! 

Your friend is perfectly within her rights to spend as much as she wants at a meal, but she should at least be aware of how much it's costing her!

Totally agree. So, my husband and I took our son out to eat after church service. Nice restaurant. I always check the bill from top to bottom. I called the server over. Turns out she gave us the wrong check.  Not a big deal. But she comes back and says the table next to us paid our bill, which was about $20 higher than ours. She had given them our check by mistake and they had paid it without looking it over. 

What to do?

The server asked if we mind just paying their bill. 

Mind?

No, ma'am, not at all. 

Also, some piece of technology has come along to make splitting checks MUCH easier for the waitstaff. They used to be reluctant, but now it seems to happen without any ado, so long as you alert them beforehand.

Exactly. Love that. Makes things so much easier especially since some folks have cash, other want to pay by credit. 

There were a few times I was in a group when we split the check. Folks would give one person the cash and he or she put it on their credit card. But guess what? Later that person said, they used the cash and didn't have it when the bill came. 

Another reason for separate checks. 

I'm with Michelle --- when you sit down or place your first order just say "May we have separate checks please?". If someone cries out "That's so college!" you lift your water glass, say "Go 'Hoos!" then pivot the conversation: "Did you read that article in the post about the repairs at the Jefferson Memorial?" she/her, Ashburn, VA

Thank you for sharing the personal information. 

Love the suggestion to lifting the glass! Nobody can "make" you feel guilty. You make that choice.

So live your financial truth!

My rule is, whoever would owe the least if we all paid exactly according to what we ordered is the one who gets to decide whether we split the check evenly.

Interesting. 

I'm firmly in the camp of splitting checks. I often order a cocktail and two glasses of wine, when some of my friends are drinking iced tea or seltzer. Why should they have to subsidize my $30 worth of drinks? FYI I am a 50-something female.

It's so nice to be grown and able to do what you want!

Good for you! I've been adding a Roth CD for the past few years at my local CU--I call it my "gap years" fund....just gives me a little more peace of mind for the future. I encouraged my 3 young adults to contribute to a Roth the first year of real earnings -- so all 3 have a good solid start with retirement growth.

Love it. Thanks.

Love your column, I've learned so much. I turn 65 in January. I'm not retiring soon and have really good health care through work. (I'm a federal employee, married with no kids). I have to sign up for Medicare soon, I understand its a legal requirement to at least register. I need to keep my employer health care for my family. What are my choices? How do I plan through this. My wife won't be Medicare eligible for 3 years. Thanks

You are asking the right questions. It's so important to do some pre-retirement planning so that you avoid costly mistakes. A lot of people don't realize that if they fail to sign up for Medicare Part B when they turn 65 there is a late enrollment penalty when they do get it. However, there is an exception to the penalty if you have other insurance. Other penalties might apply for other parts of Medicare. Please do some research. To start read the following column: Before retiring, make sure you have a plan

Also go to Medicare.gov for more information of when you should sign up. 

 

I have always found it easiest to ask for separate checks when you order - that way the server knows at the beginning, and you don't know what anyone else has ordered, so it isn't about the money - it's about making it easier on the server!

Would love to hear from any servers. Are you bothered by separate checks? 

"I felt terrible as she seemed distressed, saying she didn't realize her total was so high." The OP should not feel bad at all that her friend felt bad because of THE FRIEND'S actions! This "friend" wants the OP to subsidize her martinis without having to feel bad about it, is what it comes down to. A REAL friend would be fine paying their own check. It's not like it's any harder for her (friend), if the server is offering separate checks! Coming of age in the 80s, a lot of places wouldn't do separate checks, so we all figured out our own shares, put in our cash, and at least one person always double-checked the total so the server wasn't being short-changed...mistakenly, of course, as we wouldn't continue to hang out with someone who would undertip, even when we were in high school.

I didn't like the policy of not separating checks because everyone ALWAYS wanted me to do the math. But then I had to make someone pay their fair share because he or she would not add in the tip. So I ended up being the "collector." 

Hated that!

i agree with you Michelle, I make my restaurant choices with cost in mind. i don't mind paying a few extra dollars for someone else's choices, but not more than that. Plus I don't want my dining companion to have to subsidize my choices if I'm splurging. Separate checks are the way to go.

Yes.

I had a friend who introduced me to a friend of hers. I was warned after meeting her that while so&so was a great person; funny, interesting, etc, never to split a check with her. there are some people who are just like that.

She's in the acquaintance category. 

I think it depends on how often you go out with those people, and how often you have the more expensive meal. I have several friends with whom I eat out with often enough that it evens out in the end. It was nice for me to realize I was at a point where I didn't have to worry about a little unevenness in the check. That being said, even with those same friends, usually someone takes note if one of us had a significantly more expensive meal or more drinks and offers to split accordingly.

I can see this as a way. I just don't want to have to keep track. Because I AM the kind of person who keeps track. 

Hello! IVF seems to have worked (hurray!), so I'm thinking of college savings. I'm thinking of putting the bulk into a Roth IRA (in husband's name) rather than a 529. Due to our late start in child-bearing, we'll be 59.5yo when kiddo is in college and will therefore be able to withdraw from the Roth without taxes or penalties for anything we want (not just educational expenses). If kiddo gets scholarships or doesn't need all the funds, we can use them to purchase kiddo a car, pay for a wedding, help with a down payment, or whatever. Is there something here I have missed and need to consider? (And yes, our actual retirement and other savings are in great shape.) Thank you!

Congrats. Sounds like a good plan. But I also like the 529 plan because we get a state tax break. 

My husband and I are both retired feds. We opted for Medicare Part A only. We kept our BC/BS and it is less expensive than the Part B premiums would be.

Its' all about planning and knowing what's right for you. 

I don't think splitting checks is as hard on the server as it once was. The POS software has improved, probably because many business travelers must have separate checks for their own accounting.

Even so, sometimes the server looks annoyed. Of course, I do not pay the person any mind. 

Many of my friends, unless they are treating, actually want separate checks. The exception is my friend the mooch, who often overorders to have food for the next day, on one memorable occasion, when I was picking up the bill at Outbank, having already signed the credit card slip, called over the waitress and ordered a large dessert to go, instructing the waitress to add to "our bill"and mentioning as an aside to me that she would give me a few bucks. A few bucks to cover a $9.00 dessert, plus tax, plus additional $2.00 tip? I don't think so. I told her to have the waitress create a new bill which she should pay. In more, I wonder if I should set boundaries on the cost of food ordered.

Wow. That's crazy! When I'm treating a group or my young adult kids, I often tell them there's an order limit. You can't order an entree for more than X. They look at me like they are going to put me in a nursing home one day. I don't care. 

My organization is going through a massive restructuring, and I'm not sure if my job will be restructured out of existence. I'm in a small town, so if I am laid off, I expect that any new job will come with a pay cut. I've been trimming discretionary expenses since news of the restructure came out, but not sure that will be enough to adjust to the smaller income. I'm paying extra on my mortgage, plan to maximize my IRA contributions this year (for the first time ever), and put about 20% of my take-home into my savings/life happens fund. How should I prioritize these if I can't maintain this level of savings? Thanks!

Actually, I think you are doing all the right things. The one thing I might change is paying extra on the mortgage. For now, until you know more you should be preserving more cash. 

I can't tell you how much I love your chats--your advice is always fabulous and your warmth really comes through! My question is whether there is any reason to not move money from a bank account to a money market account? The background is that we have been saving for some home renovations and putting it in an online bank account that earns 1%. The same bank offers money market funds that are earning 2%. Is there any reason why we wouldn't want to invest the money in the money market fund? We would probably taking some of it out next year.

I see no reason you shouldn't move the money to get a higher return if the money market account is insured by the FDIC. 

Our loan office recently sent us info on our loan that included a calculator for pay off. It includes options to put more money towards the mortgage and then shows how much in interest you would save and how early you would pay it off. I was floored! Putting it in front of my husband and I change our perspective on adding more funds to the mortgage and this is for an investment property. We have no mortgage on our primary residence so I figured we were making enough to not make it worth it. I was so wrong. Here comes more money towards the mortgage and we'll see how fast we can pay it off!

Love it. Debt-free is the way to be!

"so&so was a great person; funny, interesting, etc, never to split a check with her." Someone who doesn't do right by others is not a great person. Sorry.

I sort of agree. But then good people have flaws. 

People are being too harsh to the original check splitters friend. She didn't seem mortified because she'd wanted to foist her spending onto her friend, she was clearly mortified by having unwittingly put her friend in a difficult situation! She was happy to split once it was called to her attention!

Thanks for making us look at it a different way. You are probably right. 

Is there any specific site that lists all reliable online CD's and rates? or do you recommend any specific online account?

I like bankrate.com to search for rates and banks, etc. 

As a person who doesn't feel strongly about the check splitting one way or the other, if you do, please, please say so! I am happy to split, I love going out with you and want you to be happy, but I'm not a mind reader!

Thank you for sharing this side of check splitting. 

I enjoyed the comments and advice from your guest in last weeks column. That said, I think his answers tom people who were 3-5 years awy from retiring were at best glib and at worst patronizing. In particular, the comment below- "A good retirement plan means you don’t care about what happens in the market." I dont know why, I guess if we were wealthy enough that we could put all or most of our 401Ks and so forth into risk-free investments that we can ignore the stock market, I guess we wouldn't need to be reading personal finance columns, right? And yes, i think everybody and their brother knows that stocks outperform bonds in the long run and you cant time the market blah blah blah- but maybe just maybe, this time it "really is different?" We have a billionaire president who has declared bankrurtcy twice yet his answer to everything seems to be to cuth the taxes for the wealthy and lower the interest rate. I guess I just dont have confidence in what will happen IF our next recession is a barn-burner. Thanks for letting me vent.

Don't mind the vent at all. And I do understand what you mean. But Dan was just trying to get people to calm down. 

And this time -- based on the history of the market  -- is not really that different. Because NOBODY knows what's going to happen even with whomever is in the White House, you have to have a plan that works for you no matter what happens. 

The experts I talk to don't believe we will have the kind of downturn we had with the Great Recession. 

But again since we don't know, the thing is Dan was right. A good plan means you can't care about the daily gyrations. Otherwise you will drive yourself crazy. 

You have said several times that you keep your cars until they start breaking down on the highway. Is that literally true? Except for a flat tire or running out of gas, a unexpected breakdown is more likely to be the result of neglected maintenance than sudden failure. Most mechanical problems develop slowly. Do you take care of the cars you have?

So, I was joking to make the point that I keep a car for a long time. I make sure to get all required and recommended maintenance. And as soon as any warning light comes on I race to the mechanic. But there are times when you can't planned for a breakdown. So if I have a car that becomes so unpredictable that it is constantly stranded me without any warning of an issue then it's gone!

Back when people still often used cash, I used to just immediately put the cost of what I ordered plus a third to generously cover tax and tip to avoid getting stuck with half or a third or a quarter of MUCH larger eaters/drinkers. The person who put the check on their credit card got a few extra bucks, but that was fine. I have really avoided the issue since I really don't eat out with larger groups anymore. Cafeteria style places, where you get your meal yourself and then eat together helps. But higher end places don't work like that.

I'm with you. Did the same thing. And because this can be an issue, I generally avoid very large party meals out at restaurants. Someone always skips out on his or her fair share.

You don't have to ask for separate checks in 2019. There are apps (my family likes Venmo) where one person pays the check and then everyone else Venmos the payee instantly (it takes like ten seconds). I have a large family and we have been doing this for years now. It's fair and everyone pays for only what they ordered/spent. You can do this before or after the tip. Easy peasy.

Okay. But I'm old school. Give me my separate check. You take yours. No need to be repaid. Also, because can I be honest. I have some relatives who will say they will pay me back and well, nope they don't. 

Great. But does it show how much potential gain you miss by not investing your money for higher returns rather than paying off a 4% mortgage?

And how would a calculator do that since market gains are NOT guaranteed?

Paying off your mortgage and saving that interest is a guarantee. 

There's also this.

Being debt-free removes a lot of stress.

Do what you want. You are grown. But for me, I do not want to take a mortgage into retirement. 

I want to be free of the biggest expense in my budget. And this can be done without sacrificing retirement savings. 

Boston, MA Pronoun: He Hi- We let a neighbor borrow our car on a regular basis because he's in a tight spot. Unemployed for a while and without a car in a suburb where it's hard to live without one. Unfortunately, he got into an accident that wasn't his fault with someone who totaled the car and drove off. I do trust our friend's telling of the situation. I didn't think the damage was that bad. The car was driveable, but the insurance company gets to decide if it's totaled, and it was. It was a 9 year old sedan. So we decided to buy a SUV, since we have a 3rd kid on the way in October. I want to feel fortunate that between savings, a healthy emergency fund, and the insurance payout, we are able to buy a late model used car without much debt. We are borrowing money but will be able to pay it off in 2 months or so. However, I feel mostly pissed off about the fact that we cleaned out our savings. I'd really rather feel gratitude that we are in the position to use savings, especially since our friend is in such a difficult situation. Any chance you can help? Also, if there is reason to believe that someone will be borrowing your car on a regular basis, add them to your insurance! That would have saved us and our friend a lot of hassle.

Adding the friend wouldn't have prevented the totaling of the car. 

What a wonderful friend you are. And the fact that you aren't mad at your friend for an accident, you are TOPS in my book.

Life happens and you had the money. But it's okay to feel the loss. Still, that's why you saved for the things in life that happened. The accident could have just as easily been you. Being grateful doesn't mean you don't feel the pain of letting the money go. Feel it. 

I'm grateful there are folks like you willing to help someone else out. Good for you. 

I don't think he was being glib. I think he meant that you should be invested at your risk tolerance comfort level. If a small loss keeps you up at night, then you need to be more conservative. If you are comfortable with the continuous ups and downs, and won't need a big chunk of your money in the near future, you can be more aggressively invested. Didn't he also talk about "buckets"? Conservative for near term needs, more aggressive for money you won't need for a long time. Get invested properly then you can ride out the highs and lows.

You got it!

Thank you all for joining me today. Great conversation about splitting the check. And I see your question about refinancing. Don't have the time to get to it but may in a column or answer it next week. Come back.

I read everything you send me. All of it. 

Don't forget next time to include where you live and a pronoun. Just trying to get to know who's dropping in. 

Take care and see you back next week. 

I have no question, but kudos to you for asking what people's pronouns are. It's a common request out West, and people introduce themselves with their preferred pronouns. As a parent of a transgender child, I think this is awesome.

You are welcome!

 

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Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

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