Don’t Lose Your FSA Money: Use It Before December 31

Every December I get the same panicked text messages from friends: “Wait… my FSA money disappears in two weeks???”

It’s wild how something that’s literally your own money—taken out of your paycheck pre-tax—can just vanish if you don’t spend it in time. Yet it happens to almost half of us every single year. Last year the average forfeit was $436. That’s a nice vacation, a new laptop, or several months of groceries—poof, gone—handed straight back to your employer.

If you’re reading this thinking “that won’t be me this year,” awesome. Let’s make sure of it.

The Brutal Truth About “Use It or Lose It”

Here’s the part most people miss: roughly two-thirds of employers still enforce the classic use-it-or-lose-it rule. No grace period, no carryover only if they feel generous (and the 2025 carryover max is $660). That means if your plan year ends December 31 (most do), anything left in your health FSA after midnight on New Year’s Eve is forfeited forever.

Yes, forever. Not rolled into next year, not refunded, not donated to charity in your name. It just disappears, and your company keeps it. I’ve always thought that feels a little unfair, but those are the IRS rules that have been in place for decades.

First Step: Find Out Exactly What Kind of Plan You Have

Before you do anything else, you need three pieces of information:

• Does your plan year end December 31 or some other date?
• Does your employer offer a grace period (extra 2.5 months) or a carryover amount?
• How much money do you actually have left right now?

Most people find this info in the online portal connected to their FSA debit card. If you’ve never logged in, flip the card over—there’s usually an 800 number or website. Or just email HR and ask, “Hey, can you tell me my remaining FSA balance and whether we have a grace period or carryover?” Takes thirty seconds and saves hundreds of dollars.

The Difference Between FSA and HSA (And Why It Matters)

I can’t tell you how many times I’ve heard someone say, “It’s fine, it’ll roll over like my HSA.” Nope. That’s the single biggest reason money gets forfeited—confusion between the two accounts.

Quick breakdown:

If you have both, great—use the FSA first because it’s the one with the expiration date.

Smart (and Surprisingly Fun) Ways to Spend Down Your Balance

The eligible expense list is way bigger than most people realize. We’re not just talking co-pays and prescriptions. Here are real ways I’ve seen clients (and myself) zero out an account in December without feeling like we wasted money:

• Stock up on everyday OTC meds: ibuprofen, allergy pills, cold medicine, antacids, hydrocortisone cream—these never go bad if stored properly.
• New prescription glasses or contacts (including non-prescription blue-light blocking glasses if you have a prescription for any vision correction).
• Sunscreen (yes, really—SPF is FSA-eligible year-round).
• First-aid kit restock: bandages, braces, thermometers, blood-pressure cuffs.
• Menstrual products: pads, tampons, menstrual cups, period underwear—every month for a year if you want.
• Acne treatments, medicated body washes, even electric facial cleansing brushes.
• Light therapy lamps (great if you get seasonal mood dips).
• Fitness trackers are usually NOT eligible, but heart-rate chest straps prescribed by a doctor sometimes are.
• Acupuncture, chiropractic care, massage therapy (if medically necessary—letter of medical necessity helps).
• Birth control, condoms, pregnancy tests, ovulation kits, fertility monitors.

Last year I bought a $249 pair of progressive lenses I’d been putting off, a year’s supply of contacts, two years of sunscreen, and a fancy electric toothbrush. Balance: $3.17 left. Felt like Christmas came early.

The “Hidden” Deadline Almost Everyone Misses

Even if your employer has strict use-it-or-lose-it, you usually get until mid-March or April to submit receipts for expenses that happened before December 31. That’s huge.

Translation: Schedule that dermatologist appointment or dental cleaning for December 28, pay with your regular credit card, then submit the receipt in February. Money spent in 2025, reimbursed in 2026, no forfeiture.

Pro Tips From People Who Never Forfeit a Dime

• Set a calendar reminder for November 15 every year: “Check FSA balance.”
• Keep a running Amazon wishlist titled “FSA Eligible” and add things throughout the year.
• If you’re close to zero but not quite there, buy a gift card from an online FSA store that only sells FSA items (yes, those exist).
• Team up with your partner—many plans cover spouses and dependents, so pool resources.
• If you wear contacts or glasses, order in November for December delivery.

“The biggest regret I hear every January is ‘I didn’t realize how much I had left.’ People think they contributed $1,500 when they actually put in $3,200. Check the actual balance, not your memory.”

— Benefits consultant with 15 years experience

Look, nobody wants to scramble in December. But scrambling for an hour to save several hundred dollars you already earned? That’s one of the highest-ROI hours you’ll spend all year.

So open that app, check your balance, and give yourself the gift of not handing your employer a fat bonus this holiday season.

You’ve got this. And your wallet will thank you on January 1.