Financial 411: Tips on Tipping

IBO Predicts City Budget Surplus Won't Last Long

New York City is on track to end this fiscal year with a nearly $2 billion surplus. According to the city's Independent Budget Office, the city is collecting 20 percent more in income tax revenue from businesses and 10 percent more in personal income taxes.

"The economy is doing better in New York City, I don't think there's any question about that," said Mayor Michael Bloomberg. "But we are certainly not back to the boon times."

Recently, the mayor announced more layoffs and additional cuts to services to deal with deficits next July and in upcoming budget years. Despite the current surplus, the Independent Budget Office forecasts the city will still be in the hole for more than $1 billion in the next budget cycle. It says that is due to rising pension costs, the interest the city pays on its debt and Medicaid spending.   

Consumers Are Spending More

American consumers appear to be in a festive mood this holiday season. They are spending more on gifts. Analysts believe sales could even match results seen in years prior to the start of the recession in 2008.

In particular, data from MasterCard Advisors SpendingPulse finds Americans are buying clothes at a furious pace -- perhaps to replace older items they wore out during the recession. Sales are up nearly 10 percent compared to last year. Online shopping is also going strong. It's up more than 13 percent compared to last year.  

With all that gift buying, lines at the post office are longer as well. Today is expected to be the busiest mailing day of the year. More than 800 million pieces of mail will be dropped off. That's two and a half pieces of mail for every person in the U.S. It's an increase of 40 percent from the daily volume.

Markets

Stock markets were largely on hold today as investors wait for economic data about U.S. economic growth and the housing market later this week. The Dow Jones lost 14 points to close at 11,478. The S&P 500 was up three points, closing at 1,247, and the Nasdaq gained seven points, closing at 2,650.

Some Tips on Tipping During the Holidays

If you haven't finished your Christmas shopping list, it's time to start panicking: only five more shopping days left. And what to do about those people who help you out throughout the year, like doormen, hairdressers and delivery people? How much should you give to them?

Joan Goldwasser, senior reporter with Kiplinger Personal Finance, provides some insight and advice on tipping during the holiday -- like who to give to, how much to give, and how to give it.