Should I use an FSA or HSA to help me save for healthcare needs?


Did you know I have 20/20 vision? Thanks to an FSA account I contributed to and the Lasik it helped me pay for! I hope you feel a little closer to me now.

When I first started working in a professional setting, I never took advantage of an FSA or HSA because I did not know about either account. Then I had a conversation with a few of my coworkers, who told me how they were using the accounts to save on healthcare and pay for dependent care. (As a side note – I would call this a money conversation and you know I’m a big fan of those!)

By talking with my coworkers, I was able to learn how they were using these accounts for qualifying expenses. That prompted me to take action because I could see they were using these accounts to save on annual and monthly expenses.

This money conversation with my peers prompted me to schedule a time to talk with my Human Resources department and learn more about the benefits offered. Since then, I’ve used both an FSA and HSA to reduce my taxable income and offset the cost of laser eye surgery, copays, glasses, contacts, dental procedures, and medications.

But before we go any further into this conversation about FSAs and HSAs, let me put in this disclaimer: I’m not an HR professional. I’m sharing my experience so you can start to develop your own opinion and strategy to leverage either of these two savings accounts.

So, what is an HSA and an FSA? HSA stands for Health Savings Account. You qualify for an HSA if you are enrolled in a high deductible health insurance plan (HDHP). FSA stands for Flexible Spending Account. If you have a plan that is not an HDHP, you most likely qualify for an FSA.

I’m not going to get into the nitty-gritty of an FSA and HSA but I want you to consider at a high level how either of these accounts can benefit your financial well being and help you pay for your health care needs.

Here are three steps to get you started…

1. Calculate what you plan to spend on healthcare

Block out 20 minutes and calculate your healthcare costs for next year. Write out a list of expected healthcare needs for the upcoming year. Think through copays for doctor appointments, medications, routine dental visits, dental procedures, and vision needs (glasses, contacts, etc.).

2. Contact your HR department and ask whether you qualify for an HSA or FSA

Start a conversation with your HR representative this week. Schedule a call and ask your representative to explain your employer-sponsored HSA or FSA benefits and how to best choose which option works best for you. Because you have already calculated your expected healthcare expenses for the year, you’ll be able to more clearly express your needs and better understand whether you want to use an HSA or FSA account.

Also, depending on your industry and career, this may or may not be open enrollment season for your healthcare benefits so you want to make sure you do not miss the window to opt into either of these accounts.

3. Determine if you wish to contribute to this savings account

So, you’ve calculated your costs and spoken to a professional. Continue to educate yourself on the use of either of these savings vehicles so you can make a decision before the end of the enrollment season.

My blog today is to get you to think about the different opportunities that are available to you on your financial journey to help you save money on expenses you already pay for out of pocket. I know this requires you to put in a little extra work but I hope that you take the time to start this money conversation and build your own knowledge of these two employer-sponsored savings accounts to see if this path for saving more money makes sense for you.

Email me at and let me know one question my blog has sparked for you.

Email me at and let me know one question my blog has sparked for you.

P.S. If you have more questions about these types of accounts, here is a great episode from Ask Farnoosh that has continued to support my own knowledge of HSA accounts and helped me think through different elements to make the best decision for my own well being.

Recent Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Continue the conversation: Join the Wealth Over Now private Facebook community

This community is here to encourage and support you in having open and honest conversations about money so you can stop spinning your wheels and finally gain clarity and confidence with your finances.  

Join the newsletter