Real Life

Why I Wish I Had an HSA

HSAs are a triple-tax-shelter, the money in them is yours (no matter what), and anyone can contribute to it. What's not to love?
by Sarah Li Cain May 26, 2020

Every few months I get to thinking about what I should be doing differently with my finances. As a freelancer, I’m lucky to receive health insurance through my husband’s work. And for many years we’ve opted to pay for our health expenses through the use of a flexible spending account (FSA).

Why’s that, you ask? Honestly, I can’t really answer that. An FSA felt simple. I’d heard the acronym thrown around before. Far as I knew, we’d pick an amount we wanted to contribute at the beginning of the year, put it into an account for our health needs, and use it up by year’s end. 

Mostly, I think we figured that as long as we were putting money somewhere for our health needs, we were doing it right. Right?

Eh, not really.

When I finally learned about health savings accounts (HSAs) a few years ago, I put off opening one because I thought it would be too complicated. But after some time, and a beyond-adequate amount of research that resulted in my becoming relatively obsessed with them, I realized that choosing an FSA out of what I perceived as convenience was a copout. 

I was unknowingly keeping myself from so many benefits offered by an HSA. All because I was satisfied with what felt familiar.

If you are eligible for an HSA but haven’t gotten around to opening one yet, it’s time to reconsider.

I Could Save Big on Taxes

One of the first things to think about when considering an HSA is its immeasurable tax benefits. HSAs have something called the triple-tax advantage, which means (prepare yourself!) three things:

  • Contributions (which do have limits) are tax-deductible, so they reduce your federal income on taxes owed. Woo!
  • Funds in your account grow tax-free over time.
  • And the money in your HSA can be spent tax-free on qualified medical expenses.

I want to save as much on taxes as possible (hello, freelance life). And sure, my husband and I both have IRAs, which helps reduce our taxable income, but I’d love to put away even more pre-tax dollars. Who wouldn’t?

Pay for Qualified Medical Expenses

Especially because I’m someone with variable income, I like to set aside a significant amount of money for those “just-in-case” moments. For example, last year my car broke down, which cost a few thousand bucks I wasn’t expecting to have to dish out. And while I’ve always been careful to maintain a sizable ‘emergency fund’, well, shi*t happens, and I can’t depend on that steady paycheck (looking at you, salaried folks!). This just means that I need to be extra prepared.

If I had an HSA, I’d be setting myself up to be more financially secure when it comes to my health… all while benefiting from those triple-tax advantages I mentioned earlier. Plus, if for some reason I have a  medical emergency and need to dish out thousands (since I have a high deductible), I want to make sure I can pay without going into debt.

If I had an HSA, I’d be able to contribute to my account and basically forget about it until I need it. Even if week-to-week or month-to-month, I’m using the funds for small HSA-eligible expenses (like OTC meds or menstruation products) I would feel better knowing I had a specific account earmarked for those medical expenses.

The Money Would Be Mine… Forever

Since I’ve always had an FSA, I’m used to the “use it or lose it” motto. And as much as I always tried to predict how much I’d spend on my health that year, well… see above regarding sh*t happening.

At the end of last year, I was scrambling to spend my FSA on eligible expenses so that my money wouldn’t go to waste. As a working mom/human being in the world who is just downright busy, that feels like it was such a waste of time, not to mention effort.

If I had an HSA, I could’ve simply contributed the money I’d put into my FSA into a much more stable, portable account, where it could stay safe and grow. Plus, since the money that goes into an HSA can stay there indefinitely, I could even use that account as an investment vehicle! Win-win.


Take the first step
in taking care of you.