Millions of American workers are staring down a use-it-or-lose-it deadline that could quietly drain hundreds of dollars from their pockets.
Flexible spending accounts, the tax-advantaged pots of money set aside for medical or dependent care costs, typically require you to spend the balance by December 31 or forfeit whatever is left.
For households juggling tight budgets, that forfeited cash is real money slipping away.
Here's the catch that trips people up every year: not all plans follow the same rules.
Some employers offer a grace period that pushes the deadline into mid-March.
Others allow a carryover of a limited amount into the next year.
If you don't know which camp your plan falls into, you could either scramble unnecessarily or miss a deadline you assumed was extended.
The good news is that there's a long list of eligible expenses people forget about.
Over-the-counter medications, bandages, pregnancy tests, contact lens solution, and even some sunscreen now qualify thanks to rule changes in recent years.
You generally don't need a prescription for most OTC items anymore.
Eyeglasses, dental work, therapy sessions, and copays all count too.
If you're short on qualifying purchases, check whether your plan covers dependent care costs like daycare, after-school programs, or summer camp.
Those are separate accounts with their own rules, but they carry the same forfeiture risk.
Parents who paid for child care out of pocket earlier in the year can sometimes submit those receipts for reimbursement now.
One practical move: schedule any lingering appointments before the clock runs out.
A dental cleaning, an eye exam, or a routine visit you've been putting off can absorb a chunk of your balance.
Online FSA stores also sell eligible everyday items, though be careful, since prices there are sometimes marked up.
Keep your receipts even after you swipe your FSA card.
Some employers require substantiation, and a purchase that gets denied later could turn into an unexpected bill.
If you're unsure whether an item qualifies, your plan administrator usually has a searchable list or a phone line to confirm before you buy.
With grocery bills and rent still squeezing household budgets, letting tax-free dollars evaporate is a painless loss nobody can afford.
A 30-minute review of your balance and a few strategic purchases can rescue money you already earned.
Our take: the FSA deadline is one of the few financial deadlines entirely within your control, and most people ignore it until the last week.
Set a calendar reminder for early December, not New Year's Eve, and treat the balance like cash in your wallet.
Final Thoughts
A little planning now beats watching that money vanish.