Do you have a flexible savings account (FSA)? I first started setting up an FSA just after college. I liked how I could set aside some tax-free money for eligible expenses. I was able to use it for prescriptions, office copays, and more. The only tricky part was that if you hadn’t used what was in the account by the end of the calendar year you lost whatever money was left over. Ouch! I tried to carefully anticipate my costs at the start of each year and add in a few dollars in padding so I could cut it as close to my balance as possible.
What I didn’t know until just recently is that if you’re among the 30 million Americans with flexible spending accounts, you may still have time to spend your 2012 FSA dollars. While FSA plans end at different times depending on the account many plans have an additional grace period for you to spend your funds. The grace period – if your plan offers it – gives you an extra two and a half months. That means that on March 15 the grace period is up and your unspent funds will be lost.