If you have a flexible spending account through work, there's a decent chance you're sitting on a few hundred dollars you'll never see again.
Use-it-or-lose-it rules mean most of that money has to be spent by December 31 — or your employer's plan deadline, which is often the same.
Unlike a health savings account, an FSA doesn't belong to you.
Spend nothing and the balance quietly reverts to your employer.
That's not a scam; it's the deal you signed up for, and it's exactly why December gets busy at the pharmacy counter.
The good news: the rules got slightly more forgiving in recent years, and there are more ways to spend the money than most people realize. **First, know which deadline actually applies to you** Employers have two ways to soften the cliff.
A grace period lets you spend last year's funds until March 15.
A carryover lets you roll a limited amount — $640 in 2025 — into the next plan year.
Your plan document determines it, and many plans offer neither.
So before you panic-buy a lifetime supply of bandages, log into your benefits portal or call HR and ask one question: does my plan have a grace period, a carryover, or neither?
That answer changes everything about how much time you have. **Where the money can actually go** FSA funds cover far more than doctor visits.
Eligible expenses generally include prescription medications, contact lenses and solution, eyeglasses, dental work, hearing aids, and certain medical equipment.
Over-the-counter medicines became eligible again a few years back, no prescription required.
Some of the most overlooked items: menstrual products, breast pumps and lactation supplies, sunscreen with an SPF of 15 or higher, and first-aid kits.
You can also use FSA money for COVID-19 tests and, in many plans, acupuncture and chiropractic care.
If you've been putting off new glasses or a dental crown, December is the moment.
Those purchases can absorb a balance fast, and you'd have made them eventually anyway. **The trap people fall into** The classic mistake is waiting until the last week, then scrambling to buy things you don't need.
A drawer full of expired thermometers isn't a win — it's just your money with extra steps.
A better move is to add up what you'd genuinely use in the next few months and spend down to that number.
If you still have a gap, schedule the dental cleaning, refill the prescriptions, restock the medicine cabinet.
One more thing worth knowing: if you're married and your spouse also has an FSA, you can each spend from your own account.
Just don't try to double-dip on the same expense.
Receipts get checked. **Why this matters more this year** Household budgets are tighter than they've been in a while.
Grocery bills and rent have eaten into the cushion many families used to have, and a few hundred dollars parked in an FSA is real money.
Letting it expire is, functionally, a pay cut you gave yourself.
If your open enrollment window is also open right now, this is the moment to think about next year's contribution too.
Estimate carefully — underestimate and you leave tax savings on the table, overestimate and you're back here next December.
You fund the account with pre-tax dollars, which means a $1,500 contribution costs you less than $1,500 in take-home pay.
But the benefit only exists if you actually use it. **Our take** An FSA isn't a savings account, and treating it like one is how people lose money every single year.
Treat the December deadline like a bill that's due.
Final Thoughts
Check your balance, check your plan's rules, and spend on things you were going to buy anyway — not on things that will still be sitting in a drawer come spring.