The end of the year is almost here so here’s something to think about before you get busy for the holiday season: your flexible spending account.
Now for those of you who don’t know what a flexible spending account, it’s an account you can open to help pay for medical expenses.
Also known as an FSA.
If you’ve read some of my posts, you’ll see that personal finance has terms of its own (almost like an entirely new language).
Anyway, so this account that you funded from the time you elected a flexible spending account has money that WILL expire at the end of the calendar year.
So please use it! Otherwise, you are basically throwing money away.
You can use it for new glasses, prescription refills, dental copays and other medically-related expenses.
For more details, click here.
Take a look around you. See if you can spend the funds in this account before the year is over.
If it’s too much of a trouble, then the funds will be lost. Because this account classifies as a “use-it-or-lose-it” account.
However, if you want to avoid this scenario next year, you could consider putting funds into an HSA (health savings account) instead of a FSA.
Because HSA funds don’t expire AND they serve in a similar function.
Read here to find out more about HSAs.
Just keep in mind that in order to qualify to have an HSA, you will need a high deductible health plan.
So are you on track to use up all of your FSA funds? What do you typically use the funds for? Sunscreen? Prescription refills? Contact lenses?
Or maybe you couldn’t use the funds in time and lost them forever? Did this prompt you to change accounts?
I would love to hear your thoughts and comments.
So leave a comment below!