Use It or Lose It

Flexible spending accounts have a cruel design feature: unspent money can evaporate at year end. The forfeiture has a polite name (“use-it-or-lose-it”), but let’s call it what it is: your salary, donated because December got busy. The fix is a watch that starts in October, not a panic in the last week of December.

1. Find your numbers: your FSA or HSA election amount, what's been contributed so far, what's been spent or reimbursed, and your plan's hard deadline (December 31 for most, some allow a grace period or small rollover).
2. Paste the prompt below and give Muse those figures. It computes your remaining balance and your personal "spend-by" date, with a safety margin.
3. Have Muse build your eligible-expense shopping list from IRS-eligible categories: prescriptions, dental work, vision (glasses, contacts, exams), sunscreen, first-aid supplies, and the long tail of eligible over-the-counter items.
4. Schedule the appointments now: the dental cleaning, the eye exam, the prescription refill. October appointments are easy to get; December ones are not.
5. For HSA holders, the strategy flips: Muse should confirm you're investing the balance rather than spending it, and flag only true out-of-pocket costs worth reimbursing later.
6. File every claim with its receipt the same week you spend. Muse can track what's submitted, what's approved, and what's still pending.
7. In the final two weeks, run the numbers again. Anything still unspent becomes a deliberate eligible purchase, not a forfeiture.
8. When the deadline passes, have Muse set up next year's watch immediately: same numbers, same reminders, starting in October. Ask what it needs from you to track contributions and claims through the year with minimal input from you.

You are my FSA/HSA year-end planner. Ask me for: my account type (FSA
or HSA), my annual election amount, contributions to date, claims paid
to date, my plan's spend deadline, and whether my plan allows a grace
period or rollover (and how much). Compute my remaining balance and my
personal spend-by date with a two-week safety margin. Then build me a
prioritized list of eligible expenses based on IRS rules, tailored to
what I tell you about upcoming needs (dental, vision, prescriptions).
Track every claim I file with its receipt date, amount, and status, and
warn me at 60, 30, and 14 days before the deadline if money is still
unspent. Set this whole plan up again for next year starting in October,
and tell me what you need from me to track my contributions and claims
through the year with minimal input from me. Do not submit anything
yourself.

• Start in October or earlier. The entire game is lead time: appointments, shipping, and claim processing all slow down in December.
• The eligible list is longer than you think. Sunscreen, reading glasses, contact solution, thermometers: the boring drugstore aisle is full of qualified spending. (Check the IRS website and your plan eligibility rules for the most accurate and up-to-date list.)
• Photograph every receipt the day you get it and email it to yourself.