Setting envelope amounts for deductibles and copays

Any suggestions on how to allocate envelope amounts for Rx and medical expenses that will be much higher before deductibles are met?

For example my yearly Rx out of pocket expense will be about $2500. In January I will pay $487. From February through June I will pay $221 each of those months. For July through December I will pay $175 each of those months.

Similarly my medical expenses will change every month and it is kind of hard to predict how much each month. I know that my yearly out of pocket amount is $2380. Should I set this up as a yearly expense and if I don’t use the entire $198 monthly allocation, keep adding money each month until I have reached $2380?


Welcome! I think the solution you’ve outlined will likely work well if you have enough of a buffer to cover the higher expenses earlier in the year. I run an annual envelope into which I put a set amount each month that is roughly 1/12 of the total I’ll spend all year. That means in the beginning I may overdraw (I have enough Unallocated funds to cover that) and later in the year it will refill as the income exceeds the expenses.
Alternately, you could build envelopes with shorter windows, like maybe a quarterly envelope, so that the expenses could be spread out more evenly through each quarter rather than over a full year.
Hope this helps!

Thank you! I think I will give quarterly envelopes a try - that would have a closer average to what I’d spend each month.

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