How to Not Lose Your FSA Money: A Complete Year End Strategy

Every December I see the same panic in every mom group I am part of. Someone posts that they have $400 or $600 or sometimes over $1,000 sitting in their FSA and they have no idea what to spend it on before the deadline. The responses pour in but they are always last minute and stressful.

I lost FSA money one year before I really understood how it worked. Like a few hundred dollars. And the next year I did an end of year panic buy of children’s medecine, first aid kid supplies, and random stuff like a scale and bug bite relief. This post is my attempt to make sure that never happens to you.

Here is everything you need to know about your FSA deadline and a complete strategy for making sure you use every single dollar.

Understanding the FSA Use It or Lose It Rule

The use it or lose it rule is the most important thing to understand about your FSA. Under IRS rules employers are not required to let unused FSA funds carry over from one plan year to the next. Most FSA plans follow the calendar year and require you to spend your entire balance by December 31st.

If you do not spend your FSA balance by the deadline the money is forfeited. It does not come back to you. It goes back to your employer. This is not a rumor — it is IRS policy outlined in IRS Publication 969.

Does Your Plan Have a Grace Period or Carryover?

Some employers offer a grace period that extends your spending deadline to March 15th of the following year. This gives you an extra two and a half months after December 31st to spend your remaining balance. Not all employers offer this.

Some employers offer a rollover option which allows you to carry a limited amount of FSA money into the next plan year. For 2026 the maximum FSA carryover amount is $680 according to IRS Revenue Procedure 2024-40 — up from $660 in 2025.

Important: your employer can only offer a grace period OR a carryover — not both. And many employers offer neither. You need to check your specific plan. Log into your employee benefits portal, review your plan documents or call your HR department to find out which option applies to you.

Your FSA Year End Strategy: Month by Month

October — Check Your Balance and Make a Plan

Log into your FSA administrator portal and check your current balance. Calculate roughly how much you will spend on predictable expenses through December — any scheduled doctor visits, dental cleanings, prescriptions, contact lenses. Subtract that from your balance to find out how much you need to spend intentionally.

If you have $200 or less left after accounting for predictable expenses you can likely spend it down easily with everyday FSA eligible purchases. If you have $500 or more left you want to be intentional about how you spend it.

November — Schedule Any Appointments You Have Been Putting Off

November is the perfect time to schedule any medical appointments you have been meaning to make. Dental cleanings, eye exams, dermatologist visits, therapy appointments, chiropractic adjustments — all FSA eligible. Getting these on the calendar before December means you are using your FSA for genuine care rather than scrambling to spend it on products.

December — Stock Up on FSA Staples and Treat Yourself

If you still have a balance in December it is time to stock up on things you will use anyway and treat yourself to some of the better FSA eligible purchases that feel more like gifts than medical supplies.

Stock up on everyday FSA staples: over the counter medications you use regularly like pain relievers and allergy medications, sunscreen for the coming year, first aid kit restocking, contact lens solution, children's medications.

Treat yourself to higher end FSA eligible purchases: Supergoop sunscreen bundle from Ulta, EltaMD UV Clear from Dermstore, an Oura Ring or Samsung Galaxy Ring if you have a larger balance, Theragun Mini from Target, red light therapy mask from Sephora or Amazon.

The Best FSA Spend Down Purchases by Balance

If You Have $50 to $150 Left

Stock up on sunscreen for the whole family — buy several bottles of Supergoop, EltaMD or Thinkbaby for the kids. Restock your medicine cabinet with pain relievers, allergy medications, cold and flu medicine. Pick up a nice Touchland hand sanitizer set. Grab a box of contact lens solution if you wear contacts.

If You Have $150 to $400 Left

A Theragun Mini from Target is around $180 and FSA eligible. A full skincare kit from La Roche-Posay at Ulta. A pair of stylish readers from Caddis. An RENPHO Eye Massager. A bulk order of contact lenses. New prescription glasses or prescription sunglasses from GlassesUSA or Zenni.

If You Have $400 or More Left

An Oura Ring Gen 4 starts at $299 and is FSA eligible via direct purchase. A Samsung Galaxy Ring is FSA eligible. An Omnilux red light therapy mask. The Dr. Dennis Gross FaceWare Pro at Sephora. HigherDose Infrared Sauna Blanket via Truemed. LASIK eye surgery — fully FSA eligible and typically costs $2,000 to $4,000 making it one of the best uses of a large FSA balance.

How to Avoid This Situation Next Year

The best way to avoid year end FSA panic is to elect an amount you are genuinely confident you will spend. Look at your previous year's actual medical expenses — copays, prescriptions, dental, vision, over the counter medications — and use that as your baseline.

Add a small buffer for unexpected expenses — sick kids, urgent care visits, broken glasses. But do not over-elect. A conservative election you fully use is always better than a large election you partially lose.

Set two calendar reminders — one on October 1st to check your balance and plan your spending, and one on December 1st as your final warning. Two months is plenty of time to spend a remaining balance intentionally.

The Bottom Line

Your FSA money is yours. You earned it, you set it aside and you deserve to use every single dollar of it. The use it or lose it rule is real but it is also entirely avoidable with a little planning.

Check your balance today. Make a plan. Use it all. 🩷 — Amanda

Sources

IRS Revenue Procedure 2024-40 — 2026 FSA carryover limit $680 — irs.gov

IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans — grace period and carryover rules — irs.gov/publications/p969

IRS Publication 502: Medical and Dental Expenses — irs.gov/publications/p502

FSA Store — Why Can't I Gift My FSA Funds — fsastore.com/articles/learn-gift-fsa-funds

Health-E Commerce Top 25 Hottest FSA and HSA Products 2026 — health-ecommerce.com/post/top-25-fsa-hsa-eligible-products-2026

SpendRebel FSA Eligible Items 2026 Complete List — spendrebel.com/blog/fsa-eligible-items-2026

This post is for informational purposes only. FSA eligibility rules vary by plan. Always confirm with your plan administrator or a tax professional.