Tweaking the Budget

I’ve been surprisingly short on cash lately. Well, more precisely, my “spending money” doesn’t seem to be going as far as it used to. I’ll be honest, I do still like to buy things, even if I am trying to be more frugal. But I thought I had things pretty well under control. Am I suddenly going crazy with buying things? Sure, I’m spending some extra money for mulch for the yard. And the Honda does cost more to fuel than the Nissan did. But it doesn’t seem like I should be running so short!

This weekend, it finally occurred to me what the culprit was: Copays. I’m not typically one to spend much time at the doctor’s office. Most years if I make it in for my Annual I’m doing pretty well. So I’ve always just paid my copays directly out of my spending money. I have a flexible spending account at work, which I fund with $300 each year, so eventually that money makes it back into the spending account. $10 a month on prescriptions, $35 here and there for a doctors visit. No big deal!

Except the last couple of months. Allergy season was especially bad this year, so in April I decided to look into getting a prescription. That was two doctor’s visits, $35 each. Then a visit for my ankle. Another $35. Plus an additional $23 that my insurance wouldn’t cover, since I “waited too long to be seen”. So far in June, I’ve had two visits to a Orthopedist for my ankle, a $45 copay each, plus a $150 copay at the emergency room for the beetle in my ear.

I divide my weekly check into 3 different accounts: An expenses checking account, a growth savings account, and a spending account. The expenses account is set up to automatically pay all of my recurring monthly, annual, and semi-annual expenses. I put $200 a week into this account, which covers everything from the mortgage to utilities to insurance, with a slight cushion. The growth account is currently for short-term savings, but will eventually move to holding an emergency fund, and being a temporary holding place for funds to be invested. It also gets $200 a week. The rest, approximately $170, goes into a spending account. I usually give myself $100 a week from this account, in cash, to spend on groceries and any other wants/needs. I find I can control my spending better when using cash. The rest of the money stays in the account for gas money, and a little extra cushion for wants/needs.

An extra $10 here, $35 there for copays out of the spending account is typically no big deal. But $368 over three months? Kind of a big deal. I did end up having to move some funds over from my growth account to cover the ER copay. I’m still on the fence about how I want to deal with this going forward. My parents follow the Dave Ramsey envelope system, and have a “medical needs” envelope setup that covers copays, etc. It’s a great system for some, but I’ve never really liked it. I like my spending money to be a little more fluid. That way, if I want to spend all of my money one week on groceries, I can. Some weeks I may prefer going out to dinner more. Some years I spend next to nothing on clothes. Some weeks, I’d prefer to starve and buy a cute outfit. It gives me the flexibility to feel like I can still have what I want, so long as I’m willing to make adjustments elsewhere.

I guess the biggest thing is just being aware, and making adjustments as needed.  Realizing where the money is going, and what it is for, can help me to plan accordingly.

How do you deal with your medical expenses and copays?

– Cindy W. (Ms. W)

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