A flexible spending account (FSA) is a way to use pre-tax dollars to pay for health-care expenses that your insurance doesn’t cover. This includes the deductible for you and any others for a spouse or kids, any over-the-counter drugs, your shrink, anything related to contact lenses or glasses (including funky expensive frames), condoms (to prevent pregnancy), abortions (if you fail to prevent it), childbirth classes (if you don’t want to abort) – you get the idea. There’s a comprehensive list of stuff that’s covered here.

About the only thing you can’t use an FSA for is the premiums you’re paying for health insurance in the first place.

The old way you got reimbursed was that you had to get a receipt from your doctor’s office, pharmacy, etc.; fill out a form and send it in with the receipts; and wait for a check to arrive in the mail. More FSAs now use the magic of the internet to automatically process your reimbursements (doctor’s offices and pharmacies now just alert your insurer that you spent money there, and your insurer sends a message to your FSA to pay you back). If you have direct deposit set up with your FSA, money just magically appears in your bank account from time to time.

Another way some FSAs work is by giving you a debit card that has your entire annual contribution on it. You just use that when you’re paying for medical expenses and the money is deducted from your account—no reimbursement necessary.

Figuring out how much to put in your FSA is going to depend on a lot of things—things only you know—but it’s not that hard to figure out. Take 15 minutes to calculate your total out-of-pocket healthcare costs for the year. That means deductibles, office copays, prescription copays, therapist visits—whatever’s in your medical mix. Add it all together and you’ve got your annual contribution.

Also keep in mind that the most you can put away is $5,000 a year. Are you going to be spot on at the end of the year? Probably not—you’ll either have exhausted your account by November or you’ll have $85 left over that’s going to be forfeited if you don’t use it. If that’s the case, there’s always something you can do with the money that’s better than sending back to the government. You can stock up on Claritin and Sudafed; get a pair of sunglasses; buy a first-aid kit for the house.