Using the medical flexible spending account (FSA) is one way we stretch our budget every year. Each December, I carefully consider the expenses we will have (prescriptions, doctor visits, dental cleanings, etc.) and then add some extra for unknown.
It’s a tightrope balance between selecting too much and risk losing the money or not enough. This year I fell off the tightrope already!
An Unplanned Expense
During my quarterly cleaning appointment earlier this month, my dentist decided to call in a specialist for one troublesome area. He sent me to a periodontist for help with a problem around one tooth which is a dental implant.
Next week I’ll be having gum surgery including getting a bone graft. The cost is large; I could have gotten dentures three times over for the money that has been spent on this one tooth over the years for a root canal, crown, implant, new crown and now this surgery.
My goal is to keep my teeth throughout my lifetime so this procedure was the only option.
If I had known about the surgery last month, I would have allotted the maximum amount for my FSA. Instead, it’ll be gone next week and I’ll be paying all other out of pocket medical expenses with after tax dollars.
But there is one bright spot. My dental plan pays $1,500 in benefits per year which this will use completely. That’s not the good part.
The good news is that this year my employer is changing insurance carriers February 1st so I get another $1,500 for the year.
Emergency Funds Work
The remaining several hundred dollar balance after FSA and insurance will come out of our emergency fund. You know that account with money in it just waiting for life to throw a wrench in your plans.
If you don’t have one of those accounts, before you start sending every extra penny to pay off debt or buy a new shiny toy start saving! You really need at least three months income set aside at a minimum.
We can’t control every expense or plan for every problem in life. What we can do is be ready for it!
Do you have an emergency fund? When have you needed to use it?
photo by: Old Sarge