If you set aside money in a flexible spending account this year, the clock is ticking louder than most people realize.
Unlike a bank account, an FSA is a use-it-or-lose-it arrangement, and any balance left over when the plan year ends can vanish.
For millions of American workers, that deadline lands in December, though some employers extend it to a grace period in March.
The catch is that not every FSA works the same way.
Some plans offer a grace period of up to two and a half months into the new year.
Others allow you to roll over a limited amount, which the IRS set at $640 for 2025.
Many plans offer neither, which means December 31 is a hard wall.
The average worker forfeits somewhere between $50 and $100 a year, according to benefits research, but plenty of households leave behind several hundred dollars.
That is grocery money, gas money, or a chunk of a car payment, gone simply because nobody checked the balance.
The good news is that eligible expenses go well beyond doctor visits.
You can typically use FSA funds on prescription glasses and contacts, over-the-counter cold medicine, bandages, sunscreen with SPF, menstrual products, thermometers, and even some acne treatments.
Dental work, copays, therapy sessions, and prescription medications all count.
If you are staring down a balance with days to spare, start with the pharmacy.
Stock up on eligible over-the-counter items you will actually use over the next year.
Then check whether you have any pending medical, dental, or vision appointments you have been putting off.
Getting a new pair of glasses or scheduling that cleaning uses money you already set aside.
One warning: do not buy random items just to drain the account.
You can only be reimbursed for expenses that qualify, and you will need receipts if the IRS or your plan administrator asks.
Buying things you will never use is the same as throwing the money away, just with extra steps.
Also, keep an eye on your plan's specific rules.
Some employers require you to submit claims by a certain date even after the expense was incurred, so the receipt deadline can be later than the spending deadline.
Log into your benefits portal and read the fine print, or call your HR department directly.
It takes five minutes and can save you hundreds.
If you have a dependent care FSA, the rules are different, and that money covers daycare, after-school programs, and summer camp.
Those funds often have their own separate deadlines, so do not assume one date covers both accounts.
The bigger picture is that FSAs reward planning and punish procrastination.
If you consistently end the year scrambling, it may be worth lowering your contribution next open enrollment and putting the difference into an HSA if you qualify, since those funds roll over indefinitely.
My take: this is one of the few financial deadlines where a single afternoon of paperwork can put real dollars back in your pocket.
Set a phone reminder right now, check your balance, and spend it on something you genuinely need.
Final Thoughts
Your future self will thank you for not donating that money to your employer.