Did you know that health savings arrangements can save you money?
To start using a health savings arrangement, you first need to decide how much you want to put into it. In other sections of this training there are more detailed tips and tricks on how to determine the perfect amount to start with, but in general, you want to try to put in more than you think you will need each year.
- You won’t have to pay taxes on it
- Keeping money in the account eliminates stress from unexpected medical bills
- You may want to have enough money in the account to cover your annual out of pocket expenses
Each account type has a different limit on what you can put in each year, and most people can’t afford to do it all at once. In addition, some accounts are funded solely by you, and others allow your employer to put money in as well.
Try to put in as much as you think you will need for the year, plus a little more.
If you think you will spend $1000 this year, multiply that by 1.25 and you will put in $1250. Don’t forget to put in money to cover your family members because you can use these funds for them too!
Put money away to cover your yearly deductible.
Here is a trick that you can use: take your total deductible and divide by 4. If you can save that amount in addition to your yearly expected need, you will have your entire deductible covered in 4 years.
Once you have saved it, make sure you know what to do with it.