If you have a flexible spending account through work, check the calendar right now.
Most plans require you to spend down your balance by December 31, and whatever is left after that usually goes straight to your employer.
It is one of the few deadlines in personal finance with a genuine "use it or lose it" penalty attached.
The average worker socks away somewhere between $1,000 and $2,000 a year in an FSA, and a surprising chunk of it never gets claimed.
Industry surveys have repeatedly found that account holders forfeit hundreds of millions of dollars annually, often because they simply forget the money is sitting there or assume it covers things it doesn't.
The good news is that the rules are looser than many people think.
You can spend FSA dollars on far more than doctor visits and prescriptions, and a few of the eligible categories tend to catch people off guard.
Here is how to drain that balance before it disappears.
Start with the obvious medical needs, then widen the net.
Bandages, contact lens solution, thermometers, blood pressure monitors, and even sunscreen with an SPF of 15 or higher are typically eligible.
So are pregnancy tests, hearing aid batteries, and most over-the-counter pain relievers, allergy pills, and cold medicine.
Since 2020, over-the-counter drugs no longer require a prescription to qualify.
Then look at services you might not associate with an FSA.
Acupuncture, chiropractic visits, mental health counseling, and smoking cessation programs generally count.
So do glasses, prescription sunglasses, and replacement lenses, which makes December a smart time to finally upgrade your frames.
There is also a rule many people miss: you can use FSA funds to reimburse yourself for expenses already paid out of pocket, as long as they were incurred during your plan year.
Dig through your bank statements and pharmacy receipts from the past twelve months and file a claim.
You may find you have already spent the money without realizing you could get it back.
If your employer offers a grace period, you may have until March 15 to spend the funds, but that is not guaranteed.
The other option is a carryover, which lets you roll a limited amount into next year.
The IRS sets the ceiling on that carryover each year, and it changes.
Check with your HR department to find out which rule, if either, applies to your plan.
FSA dollars cannot cover gym memberships, cosmetic procedures, or most vitamins bought for general health rather than a diagnosed condition.
And if you are switching jobs, your FSA typically does not follow you, so spend the balance before your last day.
One more thing: if you are nowhere near using your balance and have a high-deductible health plan, a limited-purpose FSA can cover dental and vision costs, which is a common end-of-year play for people who wear glasses or need work on their teeth.
That money came out of your paycheck pre-tax, which means you already paid for it in a sense.
Letting it expire is the equivalent of handing your employer a bonus you funded yourself.
Final Thoughts
Spend an hour this week with your receipts and your plan's eligible expense list, and you will almost certainly find a way to use what is left.