Tweak your HSA spending plan

Now that we're approaching a new year, how can you use insights on your family's health-related expenses to influence your coming year? In other words, let's take a metaphorical magnifying glass for a closer look at patterns from the past to inform your spending.

Here are a few pointers to ensure the funds in your HSA are there when you need them most:

Anticipate your family's needs

Use info from prior months to gauge which times of year you'll most likely need to tap into your funds. Conversely, when won't expenses be as high? For instance, let's say that during the winter your household is "Flu Central."

But in the fall, trips to the doctor and the local pharmacy are normally less frequent. So, make sure you have enough set aside during the higher-spend months.

Instead of a monthly forecast, it might make more sense to map out the family's medical needs quarterly. After all, the weather, travel plans, and activities during each season can affect our medical needs. For instance, your kids might get seasonal allergies during the spring, while in the fall they're homebound - and less inclined to suffer injuries like they would at summer camp.

By predicting these peaks and valleys, you can ensure you'll have enough funds in your HSA to spend on qualified medical expenses.

Schedule routine appointments at year's end

Because you just never know what medical issues might arise, consider scheduling non-urgent, routine appointments such as check-ups at the end of year. Besides the fact that these qualified medical expenses can most likely wait until later in the year, you can anticipate costs.

In turn, you can set aside funds to cover those costs accordingly. Besides copays for appointments, don't forget to factor in any fees for lab work, allergy tests, and other known expenses.

The end of the year is also a solid time to plan on to spend on essentials that can be purchased anytime - and therefore can wait. Think night mouth guards, eyeglasses, hearing aids, and what have you.

Create an HSA budget

With that knowledge in tow, create a spending plan for your HSA funds. Jot down anticipated expenses such as health insurance deductible, co-pays for routine visits, essential items, and things you'll know you'll purchase at specific times of the year, such as allergy medication (Rx required), sunblock for the warmer months, and flu medication for the wintertime.

It might be helpful to create a spending plan based on categories and tier them based on cost and importance. For example, Tier 1 could include deductibles, copays, and prescription medication. Tier 2 routine purchases on essentials such as glasses or contact lens solution. Your budget for Tier 3 could include over-the-counter medications or seasonal nice-to-haves, such as personal care health items.

Reassessing your spending plan using insights gleaned from months' past will help you keep your HSA account in the flush. And for whatever you anticipate spending your tax-free dollars on, make sure they're eligible expenses. Otherwise, prepare to pay income tax and penalties for the misstep.

Of course, there's not a one-size-fits-all approach to creating a spending plan for your HSA funds. By reviewing your budget at different points of the year, you'll be able to make adjustments so you have enough funds to cover your eligible expenses, and keep your family healthy.