There's a pile of money sitting in accounts across the country with a countdown clock attached, and a surprising number of people let it hit zero.
It's the cash you set aside in a flexible spending account, or FSA, and if you don't spend it by your plan's deadline, you generally forfeit whatever's left.
For a household watching every grocery receipt, that's real money slipping away.
Most FSA plans run on a calendar year, which means December 31 is the drop-dead date for a lot of workers.
Some employers offer a grace period, usually until March 15, or a carryover that lets you roll a limited amount into next year.
But those perks aren't automatic, and the rules vary by plan.
If you assumed you could just coast into January, it's worth double-checking before the clock runs out.
The amounts are bigger than people think.
A 2023 study found that workers forfeited an estimated $200 million to $400 million in FSA funds annually, with the average person leaving roughly $300 behind.
That's a week of groceries, a car payment, or a chunk of a heating bill.
So what actually counts as a qualified expense?
The list is longer than most people realize.
Over-the-counter medications now qualify without a prescription, thanks to a change that stuck after the pandemic.
That includes pain relievers, cold medicine, allergy pills, and even menstrual products.
Bandages, first-aid kits, contact lens solution, and blood pressure monitors are all fair game.
You can also stock up on things you'll use eventually.
Reading glasses, thermometers, sunscreen, and pregnancy tests count.
So do dental work, eye exams, copays, and prescription glasses or contacts.
Some plans even cover certain medical equipment.
The trick is buying eligible items, not just anything at the pharmacy counter.
One warning worth repeating: not everything in the medicine aisle qualifies.
Vitamins and supplements are typically excluded unless a doctor writes a letter of medical necessity.
Toothpaste, deodorant, and cosmetics generally don't count either.
If you're unsure, check your plan's eligible expense list or call the number on your FSA card before you swipe.
If you're staring down a balance you can't possibly spend on real needs, you have a few options.
Many retailers, including Amazon, Walgreens, and CVS, run FSA storefronts that label eligible items clearly, so you don't have to guess.
You can also book a dental cleaning, refill a prescription early if your plan allows it, or schedule that eye exam you've been putting off.
Just don't wait until the last week, when appointment slots vanish and shipping gets slow.
A quick reality check for anyone new to FSAs: this is a use-it-or-lose-it account by design, unlike an HSA, which rolls over year to year.
That's the tradeoff for the tax break you got when you contributed.
It's also why financial folks often suggest only setting aside what you're confident you'll spend, rather than maxing it out for the tax savings.
Log into your FSA account today, find your exact deadline, and check your balance.
Then spend it on things you'd buy anyway.
Letting it expire isn't frugal, it's just a donation to your employer's bottom line.
Final Thoughts
A few minutes of clicking could save you a few hundred dollars, and that's a return most of us would take any day.