Part of my job is to be familiar with the benefits package that our company offers so that I am able to answer questions that employees may have about their options and educate them on the package when they start working for our firm. Through my position at work and discussions I've had with other people my age, I've found that there are a lot of important benefits that we, as millennials, don't fully understand or take advantage of.
Joe has a goal to convince everyone he knows to take advantage of the retirement plans that their employer offers. When talking to people that he works with, he's discovered that the top reason our generation hasn't started contributing to an employer offered is because they believe that it is costing them money to do so.
A retirement plan is like a long term savings account. The money that you are putting into it isn't going anywhere. Instead of being readily available whenever you want it, your money is put in an account where it will make even more money and can benefit you greatly when you retire in the future.
If your employer will match your contributions up to a certain percentage, that's even better because it's like free money!!!
Example: Your employer will put 4% into your retirement plan when you contribute 5% of your paycheck to that retirement plan. If you have the opportunity, it would be silly not to work that 5% into your budget each month. The millennial generation will be a lot better off if we start planning and preparing for our future now when we're young.
Health Savings Accounts
This type of benefits often go hand in hand are a great thing to have, employer offered or set up on your own. There are a few different types of plans out there, but the basics are that you contribute money to these accounts, pre-tax, and you can use that money to pay for eligible medical expenses. Your employer may also contribute to this account as well as part of their benefits package. During some training this year, I learned that if you have a costly medical emergency and you don't have an account already set up, you could definitely set up an account afterward, but because the event happened before the account was set up, you can not use those funds to pay for those expensive bills. But if you have an account already set up, even if you aren't contributing to it at the time of the event, you can start contributing to it so that when the bills start rolling in, you can pay for them those funds that have not been taxed yet. If you can contribute to your HSA, consider contributing as much as the plan will allow so that you have that money set aside to help when payments arise.
We're young, we don't need life insurance, right? Wrong! Right now is a crucial time to have life insurance.
If you have someone who depends on your income enough that if something happened to you, they'd be in a bind, you need life insurance. Joe and I just bought a house, and our employers have a life insurance plan in place for us, but we are currently looking at getting something more because if one of us passed away, in order to keep our house and pay the bills, the other would need some sort of extra income. Once we've paid off our house and are completely out of debt again, that situation would change because we'd have a bigger store of emergency funds and we wouldn't have as many bills each months. The millennial generation is at an age and in situations where most of us rely on paychecks from two people to pay our bills and basic life expenses. We obviously home that neither spouse passes away so young, but it's smart to be prepared for any situation.
Right now, during open enrollment, take the time to sit down and look at the insurance benefits that are being offered to you. Educate yourself and then make the changes you need to set yourself up for success. Treat your insurance costs like you would any other thing in your monthly budget. They are as important as your rent payment because without them, you'd be in trouble. Figure out how much your benefits are costing you and put them into your monthly budget so you are prepared to pay for them whenever they come due. If you're unprepared, you are just one emergency away from a financial disaster!
I was selected for this opportunity as a member of Clever Girls Collective and the content and opinions expressed here are all my own.