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Having a HSA means that I can avoid paying some taxes that I would otherwise have to pay. But it doesn't easily fit into my normal thought processes of "(money in) minus (money out) equals (money that I have left over)".
Money that I'd otherwise get in my paycheck (after having taxes deducted) is instead placed into a separate bucket without having taxes deducted. Therefore I can still consider it "money in", but in a special separate bucket.
I had a dental appointment and was charged $XXX, of which my insurance paid $YYY, leaving me with a bill of $50. I paid the $50 bill out of my regular income. Then I got reimbursed the $50 from my HSA. This is the mentally tricky part. I'm left feeling like I didn't pay anything, but I have to remember that while those two $50 amounts cancel each other out, there was still a net $50 taken out of my "special separate bucket".
So the $50 still falls into the "money out" category. The benefit of the HSA is that, without the HSA, it would have been more like $60 to $65 money out, because an extra $10 to $15 would have been deducted from my income in taxes before ever getting into my "money in" bucket.
I can think of it as: Now my "money left over (special bucket)" has an extra $10 to $15 in it that otherwise wouldn't have been in my "money left over" category.
Or I can look at in terms of all the money in the HSA having already been spared taxes, so my (money in; ignoring bucket boundaries) amount is that much higher than it would otherwise be, and the $50 is just a normal (money out) amount.
Money that I'd otherwise get in my paycheck (after having taxes deducted) is instead placed into a separate bucket without having taxes deducted. Therefore I can still consider it "money in", but in a special separate bucket.
I had a dental appointment and was charged $XXX, of which my insurance paid $YYY, leaving me with a bill of $50. I paid the $50 bill out of my regular income. Then I got reimbursed the $50 from my HSA. This is the mentally tricky part. I'm left feeling like I didn't pay anything, but I have to remember that while those two $50 amounts cancel each other out, there was still a net $50 taken out of my "special separate bucket".
So the $50 still falls into the "money out" category. The benefit of the HSA is that, without the HSA, it would have been more like $60 to $65 money out, because an extra $10 to $15 would have been deducted from my income in taxes before ever getting into my "money in" bucket.
I can think of it as: Now my "money left over (special bucket)" has an extra $10 to $15 in it that otherwise wouldn't have been in my "money left over" category.
Or I can look at in terms of all the money in the HSA having already been spared taxes, so my (money in; ignoring bucket boundaries) amount is that much higher than it would otherwise be, and the $50 is just a normal (money out) amount.