Comments on: Money Saving Monday Tip #2 – Reduce Your Taxes and Increase Your Income

By: Make Friends, Earn Money

Make Friends, Earn Money — Mon, 19 May 2008 10:25:56 +0000

Really well laid out post. I think reading your contributions because they are so clear, simple and straight forward and the use of examples is excellent. I think you’ve choosen a subject that will be valuable and useful to most people

By: glblguy

glblguy — Thu, 02 Aug 2007 00:21:02 +0000

@Aaron – Already did

By: Aaron

Aaron — Wed, 01 Aug 2007 22:14:42 +0000

Thanks! And as you do your research on HSAs, check out http://www.cdhcompass.com — a blog I manage about HSA health plans.

By: glblguy

glblguy — Wed, 01 Aug 2007 22:00:00 +0000

Aaron, great info thanks for informative comment. btw, right there with you on the Claritin!

By: Aaron

Aaron — Wed, 01 Aug 2007 20:35:50 +0000

I used to work for a company that administered FSAs for other companies, and it was often part of my job to lead enrollment meetings about the FSA for employees. It was often frustrating to see how many people would just leave money sitting on the table out of fear of the “use it or lose it” rule.

You’re right — all that it takes to successfully save serious money with an FSA is a little bit of pre-planning and 30 minutes of basic budgeting. I’m a pretty healthy guy–my only consistent medical expense is OTC allergy medication. Even buying just Claritin for a year can total up to almost $300. I always know I’ll spend it, so there’s no reason I shouldn’t open an FSA and save almost 25% of this cost.

To add to RobY’s comments above: I’ve now been an HSA accountholder for two years, and the advantages have been outstanding. In addition to being free from the “use it or lose it” rule, I’m now spending less in insurance premiums and using the savings to fund an HSA. It’s been an interesting year, as I just (last week) had major knee surgery to reconstruct a torn ACL. Since my HSA-compatible high-deductible insurance plan has 100% coverage once I meet my deductible, I’m actually coming out ahead this year — a traditional plan would have cost me almost twice as much, once I factor in co-insurance costs, co-pays, and all the taxes I would have paid on the funds to pay for my surgery (since my HSA funds are tax-free).

By: RobY

RobY — Wed, 25 Jul 2007 18:21:40 +0000

Of course they are not the right choice for everyone… however, it was a good fit for my family and situtation. I opened one in Jan 2007. Also, expenses I would otherwise pay with after tax dollars (such as braces which are in our future) will be covered.

By: glblguy

glblguy — Wed, 25 Jul 2007 18:14:49 +0000

Thanks Rob, actually have that down in my articles ideas list. Was reading about HSAs over on the WSJ the other night. Thanks for the tip.

By: RobY

RobY — Wed, 25 Jul 2007 18:03:12 +0000

For a future post, you might want to do some research on HSA’s too. These are “Health Savings Accounts” and work much like an IRA. They are used with a high deductible insurance plan and the money rolls over each year. You open an HSA yourself so you don’t need your employer to provide it. You do, however, need a qualifiing high deductible insurance plan which most employers now offer.

Also, note … don’t confuse a “Health SAVINGS Account” with a “Health SPENDING Account”. A spending account is the FSA you mention where you must “use it or lose it”.