Realizing That Cheap Isn’t Always The Best Option

My motto used to be “whatever is cheapest” when it came to expenses. I’d go to the grocery store and get the cheapest cut of meat, I’d shop at stores that sold $5 shirts and I chose restaurants for date nights by what was the most inexpensive or that I had a coupon for. This motto even extended into things that were important, like the cost of my health insurance.

When it was open enrollment time at my job I would look at all my options and pick whichever one was cheapest. It didn’t matter if it wasn’t the best option or didn’t provide the best coverage for my needs. I just focused on which option had the smallest out of pocket deductible.

Then suddenly, when I turned 30, I started realizing that “whatever is cheapest” was a horrible motto. I realized that I did not want the cheapest cut of steak that was hard to chew. I realized that shirts that were only $5 were a waste of my hard earned money and spending more on quality clothes just made sense. I also realized, that when it was time for date night, I wanted to enjoy the {very} rare treat of going out without kids and go to places that were not so kid-friendly while I had the chance.

This realization also was clear when it came time to review my health insurance policy. As a mom it was my job to make sure that I had the coverage I needed. I started taking time to go through each option, weigh the pros and cons, and consider what was best for my family beyond just how much each plan cost at first glance.

The two major options were to go with a low deductible but higher payment per paycheck or to go with a high deductible but lower payment per check. In the past I always went with the low deductible because the large four digit deductible scared me. That was a lot of money to have to come up with at one time and not a possibility in my 20s.

A couple years ago, I actually did the math and realized that I paid so much in the monthly payments out of fear of the high deductible, that I ended up spending almost as much as the deductible would have been. It was broken up into bi-weekly payments instead of a big chunk of money but, in the end, the totals were similar. The downside was that we used our health insurance so little and now that money I made in payments is gone and if I had went with the other option I would still have that money.

I realized that it just made financial sense to go with the high deductible. I had been spending more money each month than I needed to and it was just basically disappearing. In the end I chose a plan with a low bi-weekly payment but a much higher deductible and put money aside in a savings account each month to pay the deductible if needed.

How much time do you spend comparing your policies? The 2014 Aflac Open Enrollment Survey found that 41 percent of employees spent 15 minutes or less researching their benefit options during the 2013 open enrollment season; and nearly a quarter (24 percent) spent five minutes or less. Turns out those were costly mistakes because Aflac discovered nearly 42% of workers waste up to $750 each year on their insurance benefits.

I was selected for this opportunity as a member of Clever Girls Collective and the content and opinions expressed here are all my own.