Bigger doesn’t always mean better
- B.J. Yoder: Young Money
- April 17, 2022
- 601
I was getting a mortgage from a local bank, and we were talking about the options, and another bank’s name came up. This bank was a national bank that has a “quick and easy tool to get a mortgage.” The loan officer told me his friends always ask why they shouldn’t just go through the quick and easy process instead of using him. He just laughed because he knew what would happen after the loan applicant signs up with the large bank, and that’s where the actual cost comes in.
It made me think of the full cost of things because maybe this large bank is 0.25% lower than a local bank, but what happens if you have a question about your mortgage or the payment needs to be taken from a different place, then what? Can you call the branch down the road from you to ask for the person who wrote the loan for you? Of course not. Most of the time, it seems like you will be on hold for a while, or you will only get a robotic voice that is anything but helpful. It’s times like that where the 0.25% seems like absolutely nothing.
What else can this apply to when things seem “cheaper”? I will obviously name insurance — I might be a little biased, but I do see real-life examples of it. The biggest one is when it is cheaper to go directly through a large company versus using an agent and it might be a few dollars higher, but it should be the same. I talked to one gentleman who waited a half-hour to get a hold of someone at this big company just to change a driver. He finally decided to switch over to an agent because the response was quick and much easier.
This also applies to furniture shopping, IT service, realtors, hardware stores and other service companies. I could go on and on about how the large hardware store couldn’t have cared less about if I found blind brackets for my window versus the local hardware store helping me through any little project I have around the house.
I have learned this the hard way on a much smaller scale. It wasn’t about shopping local or using a smaller company; it was just about going with the cheaper option. I like saving money, but over the years I realized different things such as shoes, phones, backpacks or furniture don’t save you money in the long run. Think of spending $40 on boots and you replace them every two years. After six years that’s a total of $120 — simple math. What if you would spring for a pair of $90 boots that seem too expensive at the time, but they end up lasting seven years? If I do the math quickly, that would be a savings of $30.
I’m not saying all big businesses are bad, but to most, we are just a number. The care and relationship aren’t there, and eventually, the “cheaper option” will feel like the cheaper option because of time spent and stress used. The cost can be felt monetarily, but it also can be felt mentally, and it can squeeze the precious minutes you have out of your day.
Think of these things the next time you’re weighing your option. The bottom line is not the only thing that matters. It’s trust, time, ease of use and being comfortable in the decision you made. Put a value on each one of these things and make sure they show on that bottom line along with the price.
Holmes County native BJ Yoder is an insurance agent by day and a finance enthusiast by night. This column is for informational purposes only. He can be emailed at benjamin.john.yoder@gmail.com.