Spend Your Remaining FSA Dollars... In Under an Hour!

by Manisha Thakor

Would you like to experience less (financial) stress and more (money) joy this holiday season? If you're a flexible spending account (FSA) user, there's an easy way for you to get both: take a look at your current FSA account balance and spend down any remaining funds.

Yes, you heard that correctly.  I'm encouraging you to SPEND! The reason is that if you don't spend all of the money in your FSA by the end of your plan year, that money will be forfeited as a result of the "use it or lose it" rule.

Here's a simple 6-point plan you can follow to spend down those remaining FSA dollars in less than an hour.

  • Find Out How Much You Can Spend. Call your provider or check your most recent paper or online statement to find out what your remaining FSA balance is. Some FSA administrators, such as WageWorks (a firm I'm proud to work with on consumer awareness) even give you the option of using your smart phone or other mobile device to log in to your account. Time: 5 minutes.

  • Find Out Your “Spend By” Date. Reach out to your benefits or HR department to find out if you must spend your FSA dollars by December 31st or whether your workplace gives you a “grace period” until March 15th. Also, take note of your final day to make purchases versus your final day to request reimbursement; your employer may offer some flexibility there as well. Time: 5 minutes

  • Review Eligible Expenses. Now that you know how much you have to spend and by when, it’s time to start using whatever funds are left. Review the extensive list of FSA eligible expenses and create a list of what you need. One site with a great list of eligible expenses and other resources include WageWorks.com/spendit. Time: 10 minutes.

  • Look For Any Gaps. Sit down and review your medical care from the past year. Are there any expenses you haven’t submitted yet? Are there any appointments you haven't had yet such as routine dental or eye exams? If so, call your providers and get those on the calendar. Time: 10 minutes.

  • Restock OTC Items. In addition to items you may have identified in the previous step, don't forget to restock commonly-used OTC products and medications, (Note, as of January 1, 2011 OTC medications require a doctor's prescription to qualify for FSA reimbursement.) And if the thought of braving holiday crowds is making you feel slightly nauseous, not to worry. You can shop online with companies like FSAStore.com from the comfort of your couch. Time (including check out!): 15 minutes.

  • Claim Your Miles: Did you know you can get a tax-break on any miles you had to drive for any doctors appointments or pharmacy visit in the past year? Reimbursement for travel between January 1 and June 30, 2011 is set at 19 cents per mile, and travel between July 1 and December 31, 2011 was increased to 23.5 cents per mile. To make this a super easy process, just use an online directions website such as Google Maps or MapQuest and enter your start and finish addresses. Print off the resulting map (which will show point-to-point mileage) and submit it to your FSA provider along with the receipts for the associated doctor or pharmacy visit. Time: 10 minutes

By the way, if you are wondering what the logic is behind the whole “use it or lose it” rule - I hear you loud and clear. Personally, I'd much rather see the government allow us to either cash out balances at year-end (paying our fair share of taxes on that amount) or roll it over to the next plan year.

Here's to a year full of health, happiness, and financial peace of mind!

[For more MoneyZen in your life, follow Manisha on Twitter at @ManishaThakor, on Facebook at /MThakor, or visit MoneyZen.com.]

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Manisha Thakor

From Manisha's linkedin profile page:

Manisha Thakor is the Director of Wealth Strategies for Women at Buckingham Strategic Wealth and The BAM Alliance. 

Manisha and her colleagues provide both evidence-based wealth advisory services for high-net-worth households and core asset management solutions for women and families nationwide with $80,000 or more in investible assets. 

An ardent financial literacy advocate for women, Manisha is the co-author of two critically acclaimed personal finance books: ON MY OWN TWO FEET: a modern girl’s guide to personal finance and GET FINANCIALLY NAKED: how to talk money with your honey. She is on Faculty at The Omega Institute and serves as a Financial Fellow at Wellesley College. Manisha is also a member of The Wall Street Journal’s Wealth Experts Panel, a member of the 2015 CNBC Financial Advisor’s Council, and wearing her financial educator’s hat serves as a part of TIAA-CREF’s Women’s Initiative. 

Manisha's financial advice has been featured in a wide range of national media outlets including CNN, PBS, NPR, The Today Show, Rachel Ray, The New York Times, The Boston Globe, The LA Times, Real Simple, Women’s Day, Glamour, Essence, and MORE magazine.

Prior to joining the Buckingham team, Manisha spent over twenty years working in financial services. On the institutional side she worked as an analyst, portfolio manager and client relations executive at SG Warburg, Atalanta/Sosnoff Capital, Fayez Sarofim & Co., and Sands Capital Management. After this she moved to the retail side and ran her own independent registered investment advisory firm, MoneyZen Wealth Management. 

Manisha earned her MBA from Harvard Business School in 1997, her BA from Wellesley College in 1992 and is a CFA charterholder. She lives in Portland, OR where she delights in the amazing Third Wave coffee scene and stunning natural beauty of the Pacific NorthWest. Manisha’s website is MoneyZen.com.