FSA Christmas Club

In the US, many companies offer Flexible Spending Accounts (FSA) for medical expenses. You put in a set amount for the year that is divided into the number of paychecks you have, and then the money is taken out (pre-tax, thus lowering your taxable income) accordingly. We track our FSA qualified spending each year to determine how much to put in each year.

To get that money back, you submit a claim form and the qualifying receipts to your company and they will either mail you a check or put the money into a designated account.

That money comes out of my husband’s paycheck each month, and put into our FSA account and invariably I forget all about it. It’s like a forced savings account!

If I don’t see it, it doesn’t exist….which is why having savings deducted from the front end, before it gets to us, like a 401k or having money directed into a savings account, can be so great.

So, I knew that we had some money that I could claim from our FSA account. And, after my husband’s ladder fall, I have PLENTY of claims to submit in order to get the money.

A few weeks ago, I received and email reminding me that we had money to claim back. I didn’t realize that we had $650 waiting for us to claim! Woo hoo! Super excited. That’s about what we’ve paid out so far after my husbands fall too.

Then, I started thinking that this would be a great way to save for Christmas!

You could just treat it like a Christmas Club! Just leave the money in your FSA account until you are ready to shop and then submit all your claims.

Granted, you aren’t earning any interest on it, but the money is taken out pre-tax, lowering your taxable income. So, if you company offers an FSA plan and aren’t taking advantage of it, you are already missing out on some great savings. The best part is that you just can’t access the money anytime like an ATM, you have to submit the claim forms and wait, thus making it harder to spend.

What are some ways you save for Christmas/birthday spending?