Single moms can’t afford to lose any money. So with the end of the year coming up fast, it’s time to get serious about spending every penny of your FSA (flexible spending account).
Using an FSA can be beneficial for a single mom’s budget. You get to use pre-tax dollars – meaning money out of your paycheck that you don’t have to pay income taxes on – to fund it. In fact, money funneled into an FSA lowers your overall taxable income and your total taxes, too. Plus, you can use it for a wide variety of health-related expenses, including insurance deductibles and copays, well child visits, prescriptions, dentist visits, and eye exams.
But there’s a big catch: Any money you don’t spend disappears at the end of the year. If you don’t use it, you lose it. Permanently.
There’s a simple way to avoid losing any of that money: Spend it.
And if you’ve got a lot left in the account this year, put less money in next year. Take a look at how much you paid in health-related expenses this year. Think about any changes for the upcoming year: Will one of your kids need braces? Is one child leaving for college? Will you be adding a child to the family? Adjust what you spent last year to account for any changes you reasonably expect. And only fund your FSA for as much as you really think you’ll spend.
If you do find yourself with money left in your FSA now, here are just some of the things you can spend it on:
- Birth control
- Childbirth/Lamaze classes (for the mother only)
- Breastfeeding classes
- Lactation supplies (including breast pumps and storage bottles)
- Sunscreen (SPF 15 or higher)
- First aid kits
- Learning disability treatments
- Nasal spray, nasal strips, and Neti pots
- Contact lenses and contact lens solution
- Prescription glasses and sunglasses
- Braces (including Invisalign) and retainers
You have until December 31st to spend the balance of your FSA (unless your employer offers up to a 2½ month grace period). If you don’t have any medical expenses on the horizon, start stocking up on sunscreen and bandages, so you won’t lose even a dime of your money.