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Health on a Budget

Most of us are watching our money more carefully these days. Emily Roth, a freelance photographer in Los Angeles, is no exception. Roth, 33, has managed to find work during the recession but is concerned that her husband, Josh, who works in the hard-hit film industry, faces an uncertain future. “Budgeting has become a very important thing,” she says. “We are very cautious.”

In the interest of fiscal restraint, the couple recently passed on renting a more expensive apartment, and they’ve also cut back on movies and eating out.

But one thing Roth will not give up is her weekly Pilates classes. In her mind, the two small-group training sessions are well worth the $50-a-week cost. She considers it a non-negotiable expense, she says, “because I feel so good afterward — I’ll pay for it no matter what.” Josh’s gym membership falls into the same non-negotiable category.

The couple has agreed that these two investments are essential enough to their individual and mutual well-being that they will find a way to afford them, even if it means sacrificing other comforts and conveniences. “We just have to make that work,” explains Roth. “It’s a commitment we made when we decided to get married.”

That’s not to say that all the Roths’ health-and-fitness expenses have been immune to cutting: Josh had been seeing a personal trainer and decided he could forgo that for a while — as long as he could keep doing his gym workouts on his own. But where the couple has made cuts, they’ve also made tweaks (like replacing those training sessions with morning bike rides together) to make sure their health and fitness doesn’t wind up slipping as a result.

The Roths are basing their choices on clear personal priorities, but also on an essential fiscal truth: that a self-care dollar saved isn’t really saved if it produces expensive consequences someplace else.

Skipping a dental checkup to avoid a co-pay, for example, means that a neglected cavity could turn into a costly (and painful) root canal. Bailing on your weekly yoga practice to save a few bucks could net you a backache that requires a more expensive series of chiropractic appointments to reverse. Overeconomizing on groceries might lead you to eat takeout more often, costing you more money than you saved.

Let any healthy habits or regular wellness practices slip by the wayside too often, and you’re likely to wind up less physically and emotionally resilient: Your mood may darken, your energy may flag, and your immunity may suffer — all of which can cause you to incur related, unanticipated costs, and make you more vulnerable to the stresses inherent in times of economic uncertainty.

Health is a priority that belongs in everybody’s budget. And the more you value your health and fitness, the more important it is to economize with those priorities in mind. When we spend money in ways that are congruent with our intrinsic values, says Tim Kasser, a professor of psychology at Knox College in Galesburg, Ill., and author of The High Price of Materialism (MIT Press, 2002), we are happier, more centered and more satisfied with our lives.

Still, as Roth has learned, it can be difficult to assess the payback from your health and wellness spending. Are regular fitness classes and massages worth the outlay? Can you still afford organic food? Could you free up some extra cash by downsizing your flex-spending-account contributions? When money is tight, such questions can get tougher to answer.

To make it easier, we’ve assembled a collection of health-related budget-cutting temptations you might be facing, and gathered perspectives to help you weigh your alternatives wisely. Naturally, there are no right or wrong answers: The goal is to help you assess which decisions are right for you — and to provide you with the insights you need to make those choices with confidence.

Tempation No. 1: Opting out of the flexible-spending or health savings account (HSA) contribution options at your job.

Budget-Minded Thoughts: Since these contributions can take a significant bite out of your take-home pay, you may be tempted to hang onto that cash and apply it to other expenditures.

Reasons to Think Twice: First, flexible-spending accounts (FSAs) and HSAs can deliver big tax savings. Second, having that money available in the account may make it easier for you to afford important health-related expenditures — if you know how to make the accounts work in your favor.

Healthwise Wisdom: While it might be tempting to stop contributing and thereby free up money for daily living expenses, you should avoid it if at all possible, says Lenny Sanicola, a human resources and benefits specialist at WorldatWork, a Scottsdale, Ariz.–based nonprofit that consults with businesses on employee benefit matters. But you also shouldn’t contribute more than you can use, particularly if there’s a chance you could lose the unused portion at the end of the year.

Most plans work something like this: You estimate your out-of-pocket health-related expenses for the upcoming year. That’s divided by the number of pay periods to determine how much you contribute from each paycheck. You pay no tax on this portion of your pay (meaning that, depending on your tax bracket, you may be getting up to 33 percent more value out of those dollars).

To successfully leverage the plan in your favor, Sanicola says, you first need to know precisely what is covered and what isn’t under any health plans you may be enrolled in, and then project your likely out-of-pocket expenses to determine the appropriate amount to contribute.

Start by reviewing the full list of items covered under your plan and checking off anything that sounds relevant to you or your dependents. The Internal Revenue Service spells out what expenses are allowable, and the government’s general rule is that a reimbursable expense must be “primarily to alleviate or prevent physical or mental defect or illness,” not “merely beneficial to general health.” That guideline (maddeningly) seems to rule out most wellness treatments and fitness-related services, but there are some exceptions worth noting.

Acupuncture and chiropractic care, for example, are often allowable. And some treatments that might not normally be allowed, such as fitness training, nutritional counseling or massage, could be considered a medical expense if they are prescribed by your physician or chiropractor to treat an identifiable condition. Don’t be afraid to ask your health professional if he or she would be willing to prescribe such services if you feel they would help support your treatment program.

In a cash crunch, being enrolled in a flex plan can come in handy: If you incur an out-of-pocket expense early in the year, you can still withdraw up to the full-year benefit no matter how much you’ve deposited in the account. For example, if your plan begins in January with a $100 monthly deposit and you have a medical emergency in February that requires a $400 co-pay, you can draw that co-pay out of the account, even though you’ve only deposited $200 in the first two months of the year. Today, many plans are moving from a reimbursement model to a debit card system that completely eliminates up-front costs.

There is one catch, however. As noted, most flexible- spending accounts are run on a “use it or lose it” basis. Any balance remaining at the end of the plan year reverts to the company, potentially eradicating any tax benefit you might have garnered or even losing you money outright. To avoid this scenario, keep close tabs on your expenditures throughout the year, so in the event you have a larger than expected balance, you can consider stocking up on contact lenses or squeezing in an annual exam, for example, rather than losing your hard-earned cash.

Smarter Ways to Save: If maximizing your take-home pay is a top priority, rather than robbing your HSA or flex plan, review your W2 tax withholdings. If you received a substantial tax refund last year, you may be able to reduce your withholdings to a break-even point, essentially turning your projected annual refund into a monthly increase in your take-home pay.

Make sure you’re routing as many essential health-related expenses as you can through your plan. Then look for ways to reduce your out-of-pocket expenses without undermining your health (we’ll get to that in a minute) and rightsize your contributions based on that revised total.

Finally, seek to fund your necessary contributions through more creative cost-cutting: If you’re contributing $100 a month to your flex plan, could you save some or all of that by downgrading your cable TV service? Go through your checkbook register and credit card statements looking for areas of opportunity.

Temptation No. 2: Cutting back on nutrition, high-quality foods in favor of cheaper options.

Budget-Minded Thoughts: Healthy food is pricey, and cheaper groceries abound!

Reasons to Think Twice: High-quality food is a relatively good health bargain, one that generates the vitality, energy and immunity you need to be effective and resilient in times of stress. Economizing in ways that reduce your nutritional intake, unbalance your diet, or expose you to toxic, inflammatory compounds could cost you far more than you save by making you vulnerable to miserable (and expensive) health conditions.

Healthwise Wisdom: The most overpriced foods in most stores aren’t whole foods, they are highly processed products — prepared foods, packaged snacks and beverages, and frozen or dried ready-to-eat meals. Such foods often contain only a few pennies’ worth of actual nutrition and use cheap ingredients like refined flours, industrial fats, processed sugars, salt and artificial flavors to create the illusion of substance. What you are really paying for is the processing, manufacturing and marketing.

While it’s true that some healthy, whole foods (e.g., organic, seasonal fruits and vegetables, and pasture-raised meats) can be more expensive than their more industrial counterparts, they are often surprisingly good nutritional values — packed with antioxidants, essential fatty acids and phytonutrients. If you shop selectively and cook creatively, you can easily stick to a budget without giving them up.

What’s important to remember is that the potential health costs of compromising your nutritional intake can be astronomical. An extensive body of research has proven that poor nutrition (the kind you get from eating a diet of processed, low-quality or industrially farmed foods) contributes to a wide range of chronic conditions, including diabetes, heart disease, depression, a variety of inflammatory conditions and even some cancers. It can also lower your immunity, making you more vulnerable to colds, flu and infections.

It’s fine to save money on groceries by shopping smarter and more selectively, but if you’re considering taking a major step back in nutrition by significantly changing the way you shop, eat and cook, you may be getting a far worse deal than you’ve bargained for.

Smarter Ways to Save: The first step to saving on your grocery bill is to shop with a menu plan and shopping list in hand. Impulse purchases will sabotage your food budget faster than you can say “Doritos and dip.”

Eating out is a big drain on the budget (most American families spend approximately half their monthly food budget on dining out), so take the time to pack a lunch for work and cook dinner at home as often as you can. Skipping two moderately priced dinners out each month can conserve enough money to cover an entire week’s worth of groceries.

Cutting back on alcoholic beverages is a similarly easy win, as is giving up on packaged (and especially vending-machine) snacks and drinks. And swear off sodas and chips. Instead, keep healthy snacks in your desk, car and tote bag and bring your own water bottle or thermos of green tea everywhere you go.

Temptation No. 3: Canceling your health-club membership.

Budget-Minded Thoughts: It’s a significant monthly charge, so why not just work out at home?

Reasons to Think Twice: Most individual memberships cost between one and three dollars a day. If your membership gives you access to facilities, classes and other resources that provide the backbone of your fitness regimen, or that support you in maintaining healthy routines, the money you save may not be worth the risk you take in abandoning it.

Healthwise Wisdom: If you have a proven track record of keeping fit without a health-club membership, then you may be able to work out on your own without sacrificing your fitness goals. But if you’re unsure, or if you’ve tried it in the past and had little success, don’t make that decision in haste: One look at a second-hand home-fitness-equipment store will tell you how many well-intentioned people purchase equipment they never use.

Consider, too, whether your club is providing you with more than just equipment. Being a gym member may give you a sense of identity and accountability, motivation, access to no- or low-cost classes, affordable group training, and social support. If your club is close to where you work or live, your access to it may be triggering you to work out more often. Being able to bring your kids or partner along, or meeting a friend there for classes, may be providing an important logistical and psychological incentive.

Even if you’re not currently going to the gym as often as you might like, consider whether you could end up going more regularly if other areas of budget-cutting (such as giving up a pay-per-view or Saturday antiquing habit) opened up more available time in your schedule.

If working out at the club is an important part of your current fitness routine, you need to make your decision even more carefully. Having a fitness routine supports more than just your body. It alleviates stress and boosts mood and energy levels, notes Kate Larsen, a certified coach and author of Progress not Perfection: Your Journey Matters (Expert Publisher, 2007). “You’re reaping physical, spiritual and emotional benefits, as well as enhancing your clarity and creativity.”

If giving up your gym membership disrupts what is currently a rewarding or sanity-supporting routine, it’s probably an unwise sacrifice. Plus, if you quit and then end up rejoining a year later, you may wind up having to repay an initiation fee.

Smarter Ways to Save: If you decide to keep your health-club membership, look for ways to make that investment work harder for you. Assuming you pay a monthly fee, the more you work out, the more value you get. So consider whether you could replace another, more expensive or sedentary pastime with more frequent workouts, thus saving money and upgrading your fitness in the process.

If you’ve decided to drop your membership, commit to spending your last month working out at the club at least three times a week. In the process of getting the most out of your remaining days, you may end up finding that the membership is, in fact, worth keeping. And if not, you’ll be clear about what you’re leaving behind, at least for now, and thus feel better about your choice.

Either way, before you make your decision, review the offerings that come with your membership: Are there classes or facilities you haven’t explored? Does your gym offer discounted salon and spa services that could save you money over your current expenditures in those areas? What about special deals on goods and services from other retail partners? Getting a discount on your cell-phone service, insurance and restaurant tabs through members-only savings could help you reclaim a significant chunk of your monthly dues.

Also consider asking your partner, friends or relatives whether in lieu of unneeded holiday and birthday gifts, they might be willing to cover part or all of your membership costs for a period of time. Finally, review your current vices (smoking, fast food, trolling eBay?) and see if letting one or more of them go might free up the funds you need to keep your membership alive.

Temptation No. 4: Skipping chiropractic, acupuncture, massage or personal-training appointments.

Budget-Minded Thoughts: They’re expensive — and you figure you could probably do without them if you had to.

Reasons to Think Twice: Depending on your current condition, stress level, and the role these services play in your well-being, you may be able to cut back and save some money, but you may also risk destabilizing your health and fitness in the process.

Healthwise Wisdom: Ask yourself about your quality of life and health in the absence of these services and use that as a touchstone when you evaluate which of them are worth preserving, advises Larsen. “Some helpful questions you can ask yourself are: What’s the reason you started the program in the first place? What are the benefits? Are you making progress or seeing improvements? Do you risk backsliding if you stop?” The answers can help you prioritize your spending.

Meanwhile, consider ways to address the root problems that led you to seek out the services you’re currently paying for: Can you fix the ergonomics at your work station? Could sleeping more or taking more frequent breaks improve your body’s resilience? Are there work or home stresses you can minimize or handle more successfully? If you can increase your own accountability and self-care, you may be able to rely less on outside help.

As you review your current and planned expenditures, consider how you can maintain momentum in the areas that give you the most benefit while also rightsizing expenditures enough that you can continue to afford them.

“One of my clients was planning to do a weeklong yoga and Pilates wellness getaway,” Larsen recalls. “But she was stressed with trying to keep up with work and the financial investment in the retreat. At first she thought about canceling, but in the end she changed her week away to a weekend away. She saved some money and made herself more available for work — yet she avoided giving up something that was important to her staying grounded.”

This scaled-back approach works for any number of treatments. Can you reduce your chiropractic visits to twice a month instead of weekly and still reap most of the benefits? Is there a no-cost yoga class offered at your gym? Is there a community acupuncture service near your home or work? Could you take up small-group training or a group-fitness class with a friend in lieu of weekly one-on-one training sessions?

If you can stay on track while you scale back, you’ll have less ground to make up when your financial situation improves.

Smarter Ways to Save: Explore services at your local community center, college or hospital, which are sometimes cheaper than studio or private-practice offerings.

Another way to keep your healthy regimens alive during tough economic times is to explore opportunities for barter. One of Larsen’s clients trades graphic design services for personal training. Ask around — wellness practitioners are also trimming their personal expenditures, and they may be delighted to make an in-kind trade.

Here, too, focus your spending on the practices that make the biggest difference in your life. Go through your entire budget with a view to what else you might give up instead.

While these suggestions can help your bottom line, not all of them will be right for everyone. The choices you ultimately embrace must reflect your personal priorities, health status and household financial situation.

The important thing is to recognize that you do have choices, and that if a health-related “splurge” is in fact a foundational part of what keeps you going strong, then it may not really be a splurge after all.

At first, Emily Roth had a hard time giving up movie nights and after-work outings, she admits, but “the bottom line is, if you don’t have your health, you really can’t do the other things you want to do.”

Roth says she sees her investment in her health as preventive medicine for when she gets older, but that the right-now benefits are every bit as valuable. “There’s something about feeling beautiful inside and out that comes from being healthy and eating healthy,” she says. And that feeling, for her, is well worth the investment.

The Savvy Scrimper

You want to continue to spend your money on the health and wellness practices that contribute to a healthy and happy life — but where’s the money supposed to come from? Here are some quick and easy ways to trim your monthly budget without selling out the healthy practices matter.

Food and Drink

  • Brew your own coffee and cut down on coffee-shop trips.
  • Use a faucet filtration system and a reusable jar instead of buying bottled water.
  • Stop buying sodas and sweetened drink mixes; instead of teabags, buy loose-leaf herbal teas in bulk.
  • Skip happy hour. Drink less alcohol.
  • Avoid expensive processed snack foods.
  • Choose house brands over the more familiar national brands.
  • Reduce the amount of meat in your diet; buy meat in bulk from a local farmer or butcher.
  • Make a hearty bean-and-veggie-based soup for dinner at least once a week.
  • Bring your lunch to work and save dining out for special occasions.
  • Keep healthy snacks on hand in your car and office.
  • Grow some food in the backyard — or in pots on your windowsill.
  • Join a grocery-buying club to purchase items at below-retail prices (learn more at
  • Avoid going to the grocery store hungry; make a menu plan and always bring a shopping list.
  • Buy staples in bulk.
  • Rediscover coupons — the savings add up!

Home and Utilities

  • Downgrade or eliminate your cable TV or DVD-on-demand service.
  • Get books and DVDs for free at the library (or for cheap at the used bookstore).
  • Replace light bulbs with compact fluorescents, which use 70 percent less electricity.
  • Repair leaky faucets.
  • Get a programmable thermostat and keep it turned down in the winter and up in the summer.
  • Wash clothes with cold water.
  • Air-dry your dishes and line-dry your clothes.
  • Put electronic devices on a power strip so you can cut off the flow of electricity to all of them simultaneously — 2 two or 3 three percent of your power usage comes from appliances on standby when they’re shut off.
  • Insulate your water heater.
  • Instead of outsourcing your lawn care, do it yourself. You’ll save money, get exercise and offset stress.
  • Clean and detail your own car interior.

Finance and Shopping

  • Call your credit-card companies and try to renegotiate rates; always call to request that any late and overpayment fees to be waived.
  • Switch from higher-interest “reward” credit cards to lower-rate no-frills cards (most rewards premiums are non-necessary items anyway).
  • Put your bills on auto-pay to avoid late fees.
  • Shop secondhand when possible. Compare prices and look for good deals online. (One great online bargain: medication for your pet. You still need a prescription from your veterinarian, but pet medical supplies are usually half the price online.)
  • Instead of tossing out worn clothes and shoes, get them repaired.
  • Instead of dry cleaning sweaters (including most wools and silks) consider hand washing them in cold water with a mild detergent (for directions, see then laying flat on a towel to dry.

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