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  • Why You Should Contribute to A Flexible Spending Account

    Why Should Contribute to a FSA

    It’s Open Enrollment season at many jobs, which means you may have the opportunity to contribute to a medical reimbursement account (MRA) and/or dependent care reimbursement account (DCA), which I will collectively refer to as a Flexible Spending Account (FSA). In a nutshell, your employer deducts your FSA contribution from your pre-tax income, and disburses the money to you as you incur expenses. The beauty of the plan is that you don’t have to pay income tax on the money you divert to an FSA. The downside is that anything left in your account at the end of the year reverts to your employer. So the trick to maximizing the benefit is to contribute as much as you are going to spend in the coming year. You can contribute up to $5,000 each to an MRA and DCA each year.

    You can use an MRA to pay for your dental and medical out of pocket expenses, including co-pays and prescriptions, as well as contact lenses, contact lens solution, and more. One way to estimate expenses is to review expenses from previous years and assume expenses will be similar. However, you’ll need to calculate differently if your family has changed or you have upcoming expenses you know about. In fact, if you have procedures that you can put off until the new year, you may want to ask if you can wait so that you can pay for them with FSA money.

    A DCA can be used to pay for childcare provided by a qualifying provider, if you are paying for the childcare so you can work (you’ll need the provider’s tax ID). When my children were in daycare, I maxed out this benefit every year. A DCA can also be used to pay for summer camp for younger school-aged children.

    Here’s a summary of tips I’ve shared in the past to help determine how much you should contribute to an MRA:

    • Examine your expenses in the last few years and determine whether they are likely to recur.
    • Determine what expenses are a given. This includes co-pays for routine doctor’s visits, contact lenses or glasses, and medication that’s taken regularly.
    • Build in a cushion for unpredictable expenses, like extra co-pays and blood tests. Your past expenses can be a helpful guideline here.
    • Have a contingency plan for the cushion in case you don’t use it. Glasses (wouldn’t a pair of prescription sunglasses be nice?), preventive dental work (has your dentist recommended replacing a crown?), and even laser eye surgery can fall into this category.

    Image via by David Castillo Dominici.

    How to Find a Deal on What You Need

    As you probably know, I’m a big believer in price books and stock-up prices. By stocking up on things you regularly need at their lowest sale price, you save money because you’re not buying those same things at a higher price.

    But sometimes, you need something right now.

    For example, I like to use Olay facial cleanser but I haven’t found a good deal on them in a long time. (There was a HOT deal a couple of months ago at CVS, but every time I went to a store, they were sold out.)

    So I went to the CFO Find a Deal page and entered “Olay” in the search box:

    Find a Deal search results | Chief Family Officer

    As you can see, a list of current deals pops up so I can see if Olay is on sale at the stores I shop at, and any current applicable coupons. Most of the current deals are for body wash, but at the bottom of the list, which you can’t see in the screen cap, all Olay Fresh Effects are on sale for 15% off at Walgreens. I haven’t decided if I’ll head there or wait to see if there’s a better deal next week.

    You can reach the Find a Deal page by bookmarking the link, or by navigating through as follows:

    How to Find a Deal | Chief Family Officer
    Click on the image to see a larger version.

    Arrow #1 shows the drop down menu that appears if you hover over the “Store Deals” tab. Just click on “Search for a Deal” to get to the Find a Deal page.

    Arrow #2 shows the search box you’ll see when you get to the Find a Deal page. Just enter your search term and hit enter or click on “search.”

    Arrow #3 shows where you can enter your search term on almost any page at The search box is located in the middle column just under the Google Adsense ad.

    The search results for the Find a Deal page are limited to the stores listed under the “Store Deals” tab. If there is a store that you would like to see included in the list, please let me know and if there is enough interest, I’ll get it added.

    Happy shopping!

    How I Saved $300 in 15 Minutes (and one phone call)

    How I Saved $300 in 15 Minutes | Chief Family Officer

    I’ve read for years that you can save money by asking medical providers to reduce the amount you owe, but the few times I asked, it never worked. Apparently, that’s because I’ve always had health insurance, and a good plan at that.

    But at the end of last year, one of the boys injured himself on a Friday evening, and after a quick trip to the pediatrician’s office, we found ourselves at the Emergency Room on Saturday. The bills from that experience have been coming in, and I’ve learned a few things:

    Lesson #1: The hospital and doctors bill separately.

    Lesson #2: They won’t necessarily tell you upfront if they are members of your insurance network.

    Lesson #3: The hospital and doctor don’t really work together. What I mean is that in our case, the hospital was in-network but the doctor wasn’t.

    Whenever I pay a medical bill, I double check it against the Explanation of Benefits we receive from the insurance company to make sure the amount is correct. When I went to pay the doctor’s bill, I realized that the doctor wasn’t a member provider. No wonder the billed amount was in the $700 range!

    The insurance company had already paid nearly $600. And apparently with an in-network provider, we would have owed approximately $150. But because the doctor wasn’t in-network, we were being held liable for the additional $600 billed.

    So I got on the phone with the doctor’s billing agency to complain that I hadn’t been told the doctor wasn’t in-network and that if I had known, I would have asked for a different doctor. The customer service representative (CSR) who answered the phone assured me that every doctor in the ER was a member of the same out-of-network group of doctors that my bill came from, and then she said something that caught me off-guard: “Let me see what I can do.”

    Though I was surprised when she said that, years of reading frugal tips had prepared me for this moment. I immediately offered to pay the $150 I would have been on the hook for with a member provider. Unfortunately, the CSR said that wouldn’t be enough. Her counteroffer was a reduction down to $500+. That was a $200 savings but still a lot of money! So I asked if she could reduce it further if I paid in full immediately. She put me on hold, and eventually came back with an offer that was $100 lower. The total was still a decent chunk of change, but about half of the difference between the original billed amount and the in-network copay. So I paid it off right there and then, impressed with myself for saving $300 in 15 minutes with one phone call.

    And I have to admit, I was pleased that my years of reading almost every money-saving tip I can get my hands on paid off!

    What’s the most lucrative phone call you’ve ever placed?

    Image via by phasinphoto.

    Braces: Saving money, What to eat, and More

    Braces: Saving money, What to eat, and More -

    Did you know that kids get braces much earlier now than they did when we were kids? (By which I mean when I was a kid. My recent reader survey says that most of you are in the same neighborhood as me, age-wise, but not all of you. As an aside, by the way, although the giveaway has ended, you can still take the short survey here and help me make CFO better for you!)

    Back to the topic of braces: Some of my boys’ peers got theirs in second grade. I’m bringing up the subject right now because my fourth-grader just got his. This is “Phase One” – we’re straightening some teeth for about eighteen months, and planning for another round of braces (“Phase Two”) that will happen post-puberty. My poor kid also needs some teeth extracted to make space for the teeth that are coming in.

    I didn’t shop around for orthodontists in the sense of visiting a few and seeing who we liked best and was the most reasonably priced. I did talk with some friends about prices and reputations. But it turned out that we loved the first office we went to, and everyone who personally knows or knows someone who knows our orthodontist only has good things to say. Compared to costs quoted to several friends, our orthodontist is also very affordable and I’d actually be happy to pay a small premium for how well his office is run.

    Unfortunately, I really didn’t think things through financially when I agreed to have the braces put on this month. The cost is a lump sum charge, rather than a per-visit fee. I think we could have waited until January, so that I could ensure our Flexible Spending Account would cover the entire amount. In fact, my two biggest money-saving tips for orthodonture would be to ensure that your orthodontist’s fees are reasonable for your region, and to pay for the process with tax-free money through your Flexible Savings or other tax-advantaged account (like a Health Savings Account).

    With our Flexible Spending Account, we only get reimbursed for expenses that occurred in that calendar year, up to the amount that we contributed. For example, I can’t seek be reimbursed from our 2014 account for a doctor’s visit that I made in 2013. And if we go over our contribution amount, then we have to pay that overage out of pocket (with money that we paid taxes on). In the case of our orthodontics, I realized too late that we don’t have enough money remaining in our 2014 Flexible Spending Account to cover the full lump sum being charged by the orthodontist. So I’m hoping that some of the charges can be applied to adjustments in 2015, which would allow me to pay for some of the costs from our 2014 Flexible Spending Account, and the remainder from next year’s.

    The other big issue I’ve been dealing with, aside from paying for the braces, is feeding the boy who now has them. He finally seems to be getting used to them, as he complained less about the pain this morning. Here are some of the soft foods we’ve tried or at least thought of:

    Chocolate Mousse
    Grated fresh apple
    Banana bread
    Macaroni and cheese
    Baked pasta (overcooked so the pasta tends toward mushy – a sacrifice tolerated by the rest of the family)

    I personally would have had delicacies like egg salad and mashed potatoes but my son doesn’t like them.

    What would you (or your child) eat if your teeth were sore?

    Image via by maen_cg.

    A Price Book: The Single Best Way to Save Money on Things You Buy

    Price Book -

    In the last five to ten years, as couponing has taken off, the Price Book seems to have fallen out of favor. But it’s the single best way I know of to cut back on expenses.

    A price book is simply a way to keep track of prices so that you know a good price when you see one. The benefit of a price book is that you can pay the lowest price on everything you buy on a regular basis, so you can substantially reduce your expenses on groceries and household items.

    There are lots of different ways to keep a price book, but I think it’s easiest to do it in a spreadsheet. Here’s an example:

    Price Book Example -
    Click on the image to see a bigger version.

    I’ve used last week’s Charmin deal at Target in this example, with a final price of 36 cents per double roll. As you can see, there are columns for Item, Size, Price, Coupon?, Other promo?, Final Price Per Unit, Date and Store. I have question marks after coupon and promo because those columns don’t always apply, but they do in this case. The “Other Promo” category can include store rewards like ECBs and +UP rewards too.

    The most critical data in a price book is the “price per unit.” That lets you compare apples to apples. For example, if next week, CVS has a 12-pack of Charmin on sale for $4.99 and there’s a $0.25/1 coupon in the P&G insert, you can calculate a final price of 39.5 cents per double roll. So you know that last week’s deal was better and you can skip the new deal because a better one will probably come along soon. Conversely, if the price next week is $3.99, which works out to 31 cents per double roll after coupon, you’d know that next week is a great time to buy toilet paper and you’d update your price book to reflect the better deal.

    If you’re starting a price book from scratch, here are some easy ways to get some data so you have something to compare new prices to:

    • Use recent receipts – Pull out receipts from recent shopping trips and use them to enter as much data a possible. You might not have the exact size information, or recall whether you used a coupon, but at least you’ll have a starting point.
    • Add data while you’re shopping – If you see something you regularly buy, even if you’re not buying it that day, take a photo of the shelf tag with your phone. Shelf tags generally list the item, size and price, so you should be able to calculate the cost per unit after you enter the data when you get home.
    • Use store circulars – Flip through the weekly ads for the stores you shop at and enter the info for the items you buy regularly. For example, all of the info in last week’s Charmin deal at Target, except for the coupon, could be found in the weekly ad.

    For organizational purposes, you could have different spreadsheets for different categories of products in your Excel file, sort the file alphabetically, or simply use the find function when you are looking for something specific. Within a couple of months, you should have a very useful tool that can help you save money on just about everything you regularly buy.

    You can download the CFO Price Book template here {Excel format}.

    This post will be linked to Thrifty Thursday at Living Well, Spending Less.

    Image via by posterize.