November is for thanksgiving and open enrollment!
I have been working for the same organization for 8 years, and I find that this yearly process is a great test for my knowledge of personal finance.
The way I navigate open enrollment has changed as our financial picture evolves. At first, the process was filled with frustration as I lacked the most basic knowledge of taxes and benefits overall. As my understanding of personal finance improved and we started making strides towards our goals, I became more confident when assessing the various options offered by my employer.
In the spirit of celebrating our wins and being thankful for the progress we have made so far, I wanted to grade my experience during the open enrollment process over the years.
In a scale of 1-10, with 1 being frustrated and 10 feeling confident, this is how my experience has changed.
Year 0-3
During my first open enrollments I was in the 1-3 range.
I knew the 401k was for retirement planning, but I was unsure about the differences between a Roth 401k vs. a traditional one.
Back then we had three health insurance plan options, two different kinds of PPO and a HDHP/HSA. Most of my colleagues went with the PPO so I chose that as well.
We could make contributions to a thing called FSA, but the “use it of loose it” statement made me afraid of putting any money in it.
Choosing benefits was overwhelming to say the least.
I would ask coworkers and sometimes they would give me some insight; some didn’t really know much about it and would tell me that their spouses were the one that took care of it.
The HR department would send me supporting documents when I emailed them about something. For some things, they would say that they weren’t allowed to give me any advice.
I went to the 401K information meetings; the guy with the suit seem very knowledgeable about money. But I guess when you know nothing, everybody with a suit seems like a financial guru (kind of like everything tastes great when you haven’t eaten for a while).
I was that annoying person that asked the most questions during meetings. Another colleague of mine was too but he always mixed in political statements and his questions sounded like attacks.
I was so confused about the fact that, aside from the two of us, most people had a blank stare and never questioned anything.
Were they experts already and I was the only clueless one?
I don’t give me a zero those days because at least I was curious and willing to learn.
Year 3-5
A few years ago, I started noticing that open enrollment wasn’t so bad. I had read a few personal finance books and googled a few things. I would give me a score from 3-5.
I knew contributing to the 401k at least up to the match was a good idea, it was free money or a part of my compensation I needed to claim.
I had some understanding of how deductibles work.
I started noticing the good choices that were out of reach because we didn’t have significant savings.
My general knowledge of personal finance was progressing and I could feel how it was empowering me to gather my own resources and ask better questions.
Year 6-7
By the last couple years, I have been a 5-7.
I sat straighter when completing the open enrollment process and looked forward to making some changes relative to prior years.
I started to play out scenarios and evaluate them under the available health plans.
We had savings that to cover high deductibles. This allowed us to start taking advantage of having a health savings account (HSA) that my employer contributed to as well.
The tax benefit of the HSA and flexible spending accounts (FSA) became clear enough that I could explain them confidently to someone else.
While navigating the choices, I would open the PDFs linked on each of them and read about something that wasn’t clear to me rather than going directly to HR.
I began to start making choices confidently while understanding the benefits and risks of our selections.
Year 8
Fast forward to two days ago when I started the open enrollment process for 2020.
I had already made most of my choices and estimated their cost annually and on my biweekly paycheck.
I had a general framework of our desired savings rate and average monthly budget.
I can navigate our accounts easily without scrambling for usernames and resetting passwords repeatedly because I forgot them.
This year I had more clarity in where our overall strategy can be optimized.
I decided to take advantage of our limited FSA as my husband must have an expensive dental procedure early next year.
I opted out of some optional coverage that I had before just because they seem cheap.
I will give myself an A (yay!), a 9/10 as I still think there is more room for learning.
It all started with a choice…
It took time to get here and I look forward to continue improving both our knowledge and our overall finances.
Now, I view open enrollment as a yearly opportunity to test my understating of benefits, taxes, and the impact of retirement contributions on our path to financial independence.
I could find it frustrating every year but since it will happen regardless, I might as well get better at it.
Now I do my own research, not just get answers from HR.
I make choices I understand, not just because others make them or because they are “cheap.”
I get to monitor our financial progress and set new goals for the future.
We can choose to avoid learning and face the same wall over and over again OR we can start equipping ourselves with the tools to open up a smoother path through the wall we know we are going to be facing.
I can’t control systems or politics, but I can arm myself with knowledge. That’s how I can make the best of our circumstances so I will claim my choice to do so.
All because I changed my attitudes towards what frustrated me: I decided to learn instead of dreading open enrollment.
After all, I am thankful for the benefits I have and the simple fact that I have options.
Have you notice changes as you navigate open enrollments every year? let me know in the comments.
