In 2000 my wife and I budgeted for new glasses, contacts, some minor dental work and medicine and thought we had all expenses covered. Well, we did and had not factored in the discount eye glasses and contacts from VSP or Vision Service Plan. Our FSA or Flexible Spending Account was left with approximately $250 and we had to spend it within a few days. An FSA, if used correctly can be a tremendous asset for your family finances. You can set aside pretax money for use for medical items like medication, medical procedures, dental visits, and more. Unfortunately, the Health Savings Account did not allow non prescription, over the counter items like contact solution or aspirin. We would have just gone to Target or Walmart and stocked up on contact solution. Another reason I wish Costco took Visa or Mastercard, this year our FSA uses a Mastercard for all purchases. Very handy, but not at Costco where they only accept American Express. Losing $250 because we didn’t budget correctly was a terrible feeling. At least if we went out and at at the finest restaurant and spent $250 on steak and lobster, we would have had something to show for it. Instead the lesson was learned to budget and spend to our FSA limit.
It’s interesting that we want to be frugal and make wise decisions with our personal budget, but if I feel that we will lose any of it to FSA, I say spend it quickly. Yesterday we checked our FSA account balance and found that we have about $80 left for the year. That gives me one day to spend $80. A quick trip to Target and we should be stocked with contact solution for all of 2009. I might even splurge and buy Alcon instead of the the generic Target contact solution.
Do you have an FSA or Health Savings Account as part of your budget? Have you lost money by not spending it all? Many FSA or HSA offer Mastercard or Visa cards and are very efficient and convenient. The hard part is to remember and use the card when purchasing medication that can be reimbursed with the FSA card. Contact solution and many other over the counter medicines qualify now for reimbursement. Make sure you don’t donate any funds to your FSA or Health Savings account company. Check your companies FSA rules for eligible purchases.
Finding new sources of passive income, residual income, or even extra income can be offset if you don’t spend all of your FSA money. Be sure to spend that FSA account money that you worked so hard to earn in 2008. If you happen to forget, be sure to keep that Visa or Mastercard as your first credit card in your wallet. Mine is red and I often wish it could be used for non medical procedures like Costco pizza. For 2009 we are increasing our FSA budget as my wife wants to have Lasik eye surgery. The benefits can be tremendous as she will not have to wear contacts and can wake up in the middle of the night and see the clock clearly. I can’t imagine what that would be like. Instead, I think I’ll wear contacts for a few more years.
{ 6 comments… read them below or add one }
I’ve always went back and forth on the FSA account at my company but have yet to pull the trigger and move over. With very young kids you never know when you’ll need it, but it is a good plan if you can chart out where you’ll be spending!
Unlike FSA funds, HSA funds do not have to be spent in the year they are received. They can roll over indefinitely. In fact, we don’t spend any of ours, preferring to invest and use those funds in retirement, tax free.
Thanks for the reminder-
It’s such an irritating process. Someone is making some big bucks off the little guy, again.
Don’t mean to whine in the New Year, though! Happy New Year!
LASIK is wonderful if you qualify and it works for you. I had mine a year ago and I have perfect vision so it was worth it for me.
The whole process was a bit crazy (I posted on it on my site) and I don’t think I could do it a second time…but I am happy I did it now.
One of the things I’m thinking of doing this year is opening a health savings account. I’ll do a little more research before taking the plunge, I think.
@Hank
We’ve tried to budget a little extra for our kids and the FSA in 2009, but it’s still hard to determine. Not as many doctor visits as they would have if they were under the age of 1. $10 co pays start to add up quickly when you see the doctor often with a newborn.
@Mr. GoTo
I’ll have to investigate the HSA further and see if we can benefit from it as well. Thanks for the tip.
@Greener Pastures
Yes, me too. I was happy to spend it all and have nothing leftover this year for the corporation. Makes you wonder how much money people waste each year by not utilizing the fsa accounts.
@lulugal11
I personally couldn’t do lasik unless they knocked me out. I can’t imagine sitting still while the doctor is working on my eye. Even if they could do the entire procedure in 5 minutes.
@Miranda
I will as well.