Pay Yourself First – HSA Contribution Automation

A successful long term saving and investment plan requires that goals be both made and acted upon.

The Goal

For a health savings account, the goal is easy – to amass as much of a safety net (or nest egg) as possible to cover future medical costs (or retirement).  Instead a monthly liability, your health care can become an asset that keeps on growing.

This goal is even more appealing when considering the advantages provided by an HSA.  For one, you can save (and invest!) money instead of throwing it away each month on premiums.  That money sits in your HSA account, just like a bank, and is yours forever.  HSA contributions also lower your taxable income.  They can be used to purchase all sorts of non-traditional medical products and services.

In today’s uncertain health care environment, more people are deciding that their goal is to take their health care into their own hands with an HSA.


Acting upon your goal requires discipline and sacrifice.  For establishing an HSA, these actions can be summarized in three steps:

  1. Insure – sign up for a High Deductible Health Plan (HDHP) that is HSA compatible.
  2. Open – open an HSA account with a registered HSA custodian.  I recommend HSA Bank.
  3. Fund – contribute to the HSA account

Insuring yourself is a given.  Opening an HSA account is simple and can be done in 5 minutes.

Funding the HSA is the hardest step as this is where you ‘part’ with your hard earned dollars each month.  Of course, the dollars you contribute are yours until you spend them.

(I procrastinated waited for six months until I began funding my HSA! At my contribution rate, this would equal an additional $960 in my account.)

Setting up an automatic monthly HSA contribution is the easiest way to reach your goal.  Being automatic, you will factor this monthly investment into your budget.  There is no need to remember to transfer the savings each month – it just happens.  It is also more difficult to weasel out and not make the transfer.

When you start out, any amount you can afford is a good amount to begin with. Even starting small at $25 or $50 per month will add up quickly.  I remember looking at my account balance once it hit the $1,000 mark and realizing that this was real money. It is a great feeling to have this kind of protection and security in the bank.  My next goal is to have my deductible fully funded in my HSA.  I would also like to contribute the 2012 maximum of $3,100 to the HSA.

Your HSA administrator will have an option where you can create an automatic, monthly transfer from your primary bank that repeats on the day you choose.  It is very easy to set up and monitor. I set my transfer near the end of the month as it makes the most sense for my biweekly pay period.  Most of my expenses occur at the beginning of the month.  Take a minute, analyze your finances and set up an automatic contribution.  Start moving towards your goals.