Suggestions on paying down orthodontist debt

I've been using YNAB since Feb and so far am doing pretty well.  It has been a real eye opener about how I handle money and not in a good way.  I still find some of the features confusing so I go pretty slow and update things carefully.  So far I've been keeping good track.  My question is about my son's braces liability - the total bill is $5500 and it is paid monthly in installments of $247.  I set a monthly goal in my budget under a category called "braces" and I made a note about  what date the automatic withdrawal happens.  I set up an account for the Orthodontist under keeping track so I can see how much I still owe on an ongoing basis.  The first auto withdrawal will come off my credit card tomorrow.  I'm just wondering about how to track the expense so that it will reduce the amount in the Orthodontist account.  I have gone through all the workshops on credit cards so I understand how a charge against the card comes out of the proper category and then gets moved from the category to the cc payment.  Do I transfer to the Orthodontist account somehow?  Sorry even trying to explain it gets me confused lol.

Any  suggestions are appreciated!

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    • bevocat
    • Sometimes, It Just Sucks to Be You
    • bevocat
    • 5 mths ago
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    Depends. Is the debt interest-free?

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    • bevocat 

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    • bevocat yes it’s an interest free payment plan 

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    • nolesrule
    • YNAB4 Evangelist
    • nolesrule
    • 5 mths ago
    • 2
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    I would just treat it like a monthly bill and put a note on the category that the payments will end at a certain date. I wouldn't bother with the extra account.

    In fact, that's exactly what we are doing with our kids.

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  • You can keep track of how much you've spent with searches/reports:  https://docs.youneedabudget.com/article/169-spending-report

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  • Hi Orange Mask !

    To update all of the involved accounts and categories, you'll enter that payment as a transfer from your credit card to your Orthodontist Tracking account. That will increase the balance on your credit card, decrease the balance on the Tracking account, decrease the Available amount of the Braces category and increase the Available amount for your credit card category (as long as the payment was fully budgeted for). :)

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      • Orange Mask
      • Orange_Mask.5
      • 5 mths ago
      • 1
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      Faness Ah! Ok now I understand. Thanks!

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    • Technicolor Cheetah
    • Not sure when I became a cheetah...but I'll run with it
    • technicolor_cheetah
    • 5 mths ago
    • Reported - view

    My only suggestion is that if there are other children or extra work that may need doing, that you continue saving each month even after you're done with the current child. Perhaps saving more than the monthly charge if you can afford it.  And maybe beyond, for any future dental care.

    Our second kid will need expanders probably by the end of the year.  I put a lump sum in my Orthodontics category when I started YNAB in January and have been funding that category every month since; I doubt I'll have all the money when the work is done but I'll have a significant down payment.  I plan on continuing to fund that category at that amount, possibly more, for the next 6-10 years until all our kids have had all the medically necessary dental work and orthodontia; the youngest inherited our narrow faces like the others did so I expect he'll need expanders eventually.  I did tell my oldest that unless he wants it or it becomes medically necessary, we would not make him get more orthodontia because it was a horrible anxiety causing stress and all of that is bad for his mental health.  

    I may possibly continue funding that account after the kids are grown because dental insurance only covers a fraction of anything past routine cleaning and if you need crowns or implants or root canals, or gum surgery or anything like that, it's $$$ that has to be paid out of pocket.  I don't want to pay for a crown but if it needs doing, it needs doing.  Other YNABers here have mentioned thousands, even tens of thousands, of dollars of dental work that they're paying for or will need to pay for this year.  I don't know about you but I can't cashflow that kind of money. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
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      Technicolor Cheetah Having an FSA or HSA (and paired with a Limited Purpose FSA) can also help defray the cost since you can reimburse yourself with pre-tax money.

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    • Technicolor Cheetah  that’s a good suggestion. I have been deferring my own dental work until the braces are covered but it’s  probably creating more problems down the road. Definitely something I need to fund.  

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      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 5 mths ago
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      nolesrule 

      We have a flexible spending account. As I understand it, IRS says you must have a high deductible health plan for an HSA, which we do not have, so the HSA is not an option (our in-network deductible is under a thousand).  Please correct me if I'm wrong.   I don't know what a limited purpose FSA is.  Our health care costs have been well above the max  FSA for the last 3 years.  Most years we hit our OOP maximum for both in network and out of network medical expenses.  Unfortunately, there is no OOP max for dental, orthodontic, or vision.  

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
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      Technicolor Cheetah Yes, you need an HDHP for an HSA. 

      A Limited Purpose FSA is a special FSA that cannot pay anything toward medical before you've met your health plan deductible. Usually it is limited to reimbursing for only Dental and Vision expenses. Because of this limitation, it can be paired with an HSA, while a regular FSA cannot.

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      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 5 mths ago
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      nolesrule 

      Thanks.  We've never looked into an HSA.  As we have significant on-going medical expenses and can afford a lower deductible plan, we've never considered an HSA.  Our normal, expected medical expenses would be much greater on a high deductible plan.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 5 mths ago
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      Technicolor Cheetah Yeah, I feel like if you have significant on-going medical expenses and good insurance with a lower deductible, you're probably better off than you would be going with an HDHP and HSA. Those are probably more appropriate for people without on-going health issues, I would think.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
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      bevocat Depends on all the HDHP numbers vs regular insurance numbers. You have to analyze the difference in premium, deductible, coinsurance percentage, max out of pocket and how much money you can funnel through the pre-tax accounts. Often it's the people at the extremes that benefit from the HDHP, but not always.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 5 mths ago
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      nolesrule Yep, those parameters are exactly why I used hedging language. A good rule of thumb, and then looking at the particulars to sanity-check.

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      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 5 mths ago
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      bevocat nolesrule

      For us, hospitalization is always an ongoing concern.  We've also had years when we had 5-7 different medical appointments or therapies every. single. week.  The employers' HDHP covers 70% of allowable.  That 30% plus non allowable amounts adds up fast if you have lots of appointments or any kind of surgery/hospitalization.  If anything catastrophic happened, we'd be looking at 10s of thousands if not hundreds of thousands in expenses.  The last hospitalization was billed at $15000 plus the out of network doctors' fees which were another $3000.  For us, the higher premiums of the good insurance with lower deductibles is an acceptable cost even if we didn't expect to use it.  I can't risk our health and well being to save money because we can afford the insurance.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 5 mths ago
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      Technicolor Cheetah I hear ya! My fiance is on Medicaid and has multiple lifelong disabilities, and I have my own good insurance through my employer and a couple of chronic issues. He can't go to appointments without me, and of course I can't do my appointments without me, so they can really stack up and it gets exhausting.

      I need to go get on my treadmill just thinking about all that stress!

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
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      Technicolor Cheetah 

      Technicolor Cheetah said:
      If anything catastrophic happened, we'd be looking at 10s of thousands if not hundreds of thousands in expenses.

       HDHPs have an annual max out of pocket. They aren't open-ended when it comes to costs. Of course, the out of network usage is a concern because that usually has a separate deductible and max out of pocket.

      But again, if it's not the right fit, it's not the right fit. I encourage the analysis.

      I switched myself from  my wife's HDHP to my own EPO.  My premium is cheaper, and we can still make family-level HSA contributions.

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  • I second the advice to treat it like a normal bill (without an account). However, if you insist on using an account, make sure a) it's a Tracking account and b) the account balance is negative.

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