Despite managing multiple responsibilities and tight budgets, students must also find ways to stay healthy without overspending. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are excellent tools for this purpose because they provide tax-advantaged ways to pay for healthcare expenses while promoting financial savviness.
Here’s how HSAs and FSAs can help you achieve financial stability and a healthy lifestyle.
Understand the Tax Benefits and Savings Potential
The primary benefit of HSA and FSA accounts is their tax savings. Contributions to these accounts are pre-tax, meaning the money is deducted from your paycheck before taxes are applied. That reduces your taxable income, which lets you save on taxes while building a fund for medical expenses.
HSAs offer a triple tax advantage with pre-tax contributions, tax-free growth, and tax-free withdrawals for all medical expenses, and unused funds roll over annually, making them a valuable long-term savings tool. At the same time, FSAs provide pre-tax funds but are typically “use it or lose it,” making them better suited for immediate healthcare needs within a plan year.
One way to take advantage of this is to set aside a small portion of your income for these accounts, even on a tight budget. The tax savings alone can add up, and with an HSA, you’re building a lasting fund for future healthcare needs.
Maximize Your Funds by Investing in Health and Wellness Products
Both HSAs and FSAs cover more than just doctor visits and prescriptions. Depending on eligibility, you can use the funds in these accounts for health and wellness products like first aid kits, sunscreen, contact lenses, and fitness trackers. You can even purchase exercise equipment with HSA funds to support your fitness routine while maximizing your savings.
For instance, if your doctor prescribes supplements like digestive aids or vitamin D, these might be reimbursable through your HSA or FSA.
It’s important to verify if your current health products are HSA/FSA-eligible using resources like the FSA or HSA stores. Doing this helps you maximize your funds and avoid extra expenses.
Plan for Routine and Preventive Healthcare Costs
You might not always think about routine or preventive care as a student. However, staying on top of your health now can prevent costly medical issues down the line.
HSAs and FSAs cover routine and preventive care, including check-ups, vaccinations, and screenings. You can also enjoy regular dental cleanings, vision exams, and routine doctor visits, which help you stay healthy while minimizing out-of-pocket costs.
Use your HSA/FSA to budget annual preventive care expenses like check-ups and vaccines. Preplanning and taking the initiative ensures you have the funds ready when needed and promotes physical health and financial discipline.
Use Your HSA/FSA to Cover Mental Health Expenses
Since college life can be stressful, mental health care should be a key focus area in your well-being plan. Many students aren’t aware that HSAs and FSAs cover mental health-related expenses, including therapy sessions, counseling, and mental health apps.
Virtual therapy services and apps like Headspace or Calm, as well as prescribed medication for anxiety or depression, are often eligible for reimbursement. If you’re using mental health services, check if they are HSA/FSA-eligible and budget for them accordingly.
Leverage Technology to Track and Optimize Your Spending
Managing an HSA or FSA account can seem daunting, but you can use available tools to stay organized. We now have apps and platforms designed to help you manage these accounts, help you track expenses, monitor eligible purchases, and quickly submit claims.
Use apps that automatically categorize expenses and remind you about upcoming deadlines, view your account balance, set savings goals, and find eligible expenses all in one place. Choose an app that simplifies HSA/FSA management and makes it easy to track eligible expenses and maximize your savings.
Conclusion
By understanding how to take advantage of HSA/FSA accounts, you can set yourself up for a healthier lifestyle and smarter financial habits, all while reaping significant tax and wellness benefits.
