Every fiscal year, I must choose which items I need to pay for through payroll deduction. As much as I love finding ways to save money, times come when I must spend wisely. I can budget my net pay very well. Therefore, I have the costs of some of my needs go through payroll deduction to reduce or eliminate out-of pocket expenses when I need to use the coverage.
Medical Insurance
My employer offers medical coverage, but I pay some of the premium out of pocket. I have my portion of $62.21 taken out through payroll deduction. This insurance covers me from unexpected illness or injury, which occurred frequently in 2012. I choose the lower-premium but higher-deductible plan. In 2012, I used up my $1,500 deductible in the first half of the year. I had the money in my health savings account, and once I used it, I had the rest of the year’s worth of all medical expenses fully covered. That $1,500 looks expensive, but it is far better than the $6,000 more that I would have paid without the insurance coverage.
Health Savings Account
To cover that $1,500 deductible, I choose payroll deduction to transfer money into my health savings account. I have $50 deducted each payday, and my employer contributes another $25. That $150 each month will total $1800 for a calendar year. This money more than covers my high deductible and leaves some left. In most years, I will not have many medical procedures, so my account will stay full. I can then save the money for future emergencies.
Vision Insurance
When I turned 40 in late 2009, my primary physician suggested annual eye exams. I added vision insurance to my payroll deduction — at $5.21 per paycheck — to cover the exams and other vision expenses. My first exam showed that I needed both reading glasses and prescription sunglasses. Each pair cost $200, and the exam itself would have cost well over $200 more without the coverage. My insurance covered the reading glasses, half the cost of the sunglasses, and most of the exam’s cost. Instead of paying over $600, I paid $145 the first time. For each annual exam since, I pay $54 total rather than full cost.
Dental Insurance
I have used payroll deduction for dental care since I started working full-time in 1993. After turning 40, I began having some dental problems. My teeth became infected and required multiple deep cleanings. I also needed to replace previous fillings, add new fillings, and have oral cancer screenings. My insurance costs $12.55 per paycheck. It covered much of the cost but left me with $1,100 to pay out of pocket. I could have complained about paying this amount, but I chose to feel grateful that I did not have to.
Identity Theft Protection
A $7.40 payroll deduction for identity theft protection saved us in 2012. My wife and I received word that our checking and credit card accounts were frozen because of two fraudulent charges totaling $10. This was a very small hit, but it could have led to the emptying of our checking account and the running up of our credit card. We endured the hassle of getting new accounts and replacing the cards, and we were happy to have our money refunded. Our identity theft protection company and our credit union watch our accounts carefully. They notify us of any suspicious-looking activity and ask us about unusual charges to make sure that we actually made them.
Well worth the cost
These five deductions total $137.37 each payday or $274.74 per month. As much as I would love to have that money available for other bills, leisure, or savings, I gladly have it deducted for these intended purposes. We saved approximately $5650, possibly much more if not for ID protection, by paying these costs through payroll deduction. I will make this trade any time.
