If you’ve ever lost money because you forgot it was there to begin with, this is what it feels like:
That’s it. That’s what it feels like. A strong punch in the gut that leaves you speechless and thinking: whoa, huh? Well, that and being angry with yourself for the foreseeable future.
The first time I lost a large amount of money, I was making $40,000 per year—and spending virtually all of it on annual living expenses. So in essence, I was breaking even… saving a little bit (depending on how much mac and cheese I ate for dinner in 30 days’ time) here and there, but generally, money was a stressor (adulthood!).
Now, $800 may not sound like a lot to lose for some people, but when you’re trying your damndest not to live off of credit cards, and just barely within your means… well, it’s a whole lot.
So how exactly did I manage to lose $800, you ask? Easy. I put it into my flexible spending account (FSA) and then simply forgot that it was there.
How could I forget about that amount of money, you might be wondering? Another easy one! I didn’t know any better. The HR department at my then-job didn’t do what many have begun to, which is send out email reminders towards the end of the year that you’re “running out of time to spend those FSA dollars before you lose them!”
Instead of scheduling a bunch of year-end doctor’s appointments I could have been getting out of the way, I remained blissfully unaware, and, well… you know the rest.
Of course, it wasn’t really HR’s mistake, nor their problem that I forgot about this great thing I’d done for myself a year earlier. After all, doing the personal due diligence to account for my assumed health expenditures was such an adult thing to do! I just didn’t do it, uh, right.
“How Did You Forget About That Money?!”
This is what my mom asked me. And her knowing that I had, indeed, gone to the doctor over the past 365 days, owed copays, and bought prescriptions, this was a fair question. But one to which I had no answer. Somehow, I’d managed to simply forget about the money in my FSA. Ugh, even thinking about it right now, 5 years later, bums me out. After all, my healthcare-working, financially-savvy mother taught me better!
The year was 2015, and when I put that money away at the beginning of the year I just… I just truly didn’t think much of it, crazy as that may sound. I filled out forms blindly, took the advice of the random guy who sat next to me when I asked, “Hey, how much money do you put into your FSA?”
It’s cringey! But we all make mistakes. And this was a big one for me.
So, What’s Changed?
Believe it or not, this was not the last time I’d have an FSA! The following year, I put $500 into my account (but went through before June… whoops).
But now it’s 2020, and I’ve had a health savings account (HSA) since 2017. Initially, I signed up for an HSA because I knew I’d never lose the money I put into it (unless I spent it, duh) like I did with my FSA. This was, unsurprisingly, a point that was and remains very important to me. But it’s been a few years now since opening that first HSA. And today, I know a lot more about their benefits.
Perks of My HSA
My company offers a yearly employer contribution to my HSA, so I see know it feels to have extra money come into my account, too. And because I fund my HSA directly from my paycheck, it arrives pretax (like free money, honey!).
In addition to knowing my money won’t disappear from year to year, I also pay for my copays, prescriptions, and even new glasses and sunglasses with my HSA. As someone who isn’t totally sure month to month how much money I’m going to need for my health expenses, I love that I can change my contribution amount… whenever.
I don’t plan on going back to an FSA any time soon, and believe it or not, it’s not even because I lost 800 big ones all that time ago (ugh). Honestly, having an HSA just feels a lot less… stressful? Complicated? Anxiety-inducing?! And it works for me whether I’m contributing, withdrawing for eligible medical expenses, or investing for a future that may or may not look like the present… all tax-free, baby!