The holiday season is a magical time of year, filled with family gatherings, festive décor, and meaningful gift-giving. However, it can also bring financial stress if you’re not careful. At Medcom Benefit Solutions, we’re here to help you navigate the season with smart financial planning tips to keep your budget on track while making the most of your employee benefits, like FSAs and HSAs.

1. Use Your FSA Before Year-End

If you have a Flexible Spending Account (FSA), the end of the year is your deadline to spend those funds—most FSAs don’t allow rollovers. Here are some ways to use your FSA funds wisely during the holiday season:

• Stock up on health essentials: Purchase items like bandages, thermometers, or contact lenses for your family (for a list of FSA-eligible items, refer to the FSA Store)
• Plan ahead for 2025: Schedule end-of-year medical, dental, or vision appointments
• Give practical gifts: Consider FSA-eligible items like heating pads, fitness trackers, or first-aid kits as thoughtful yet practical holiday presents

Pro Tip: Check with your employer to see if they offer a grace period or carryover option for your FSA. If they do, you may have additional time to use those funds.

2. Maximize Your HSA for Tax-Free Savings

Health Savings Accounts (HSAs) are another great resource during the holidays, offering tax-free contributions, withdrawals for qualified expenses, and long-term savings potential.

• Save on family health expenses: Use your HSA to cover copayments, prescriptions, or over-the-counter medications.
• Invest in the future: If you’re not using all your funds this year, consider leaving money in your HSA to grow tax-free for future health expenses

Note: Refer to our blog on HSA Limits for 2025 for rules on how to use your HSA)

3. Stick to a Budget for Gifts

While it’s tempting to go all out for loved ones, overspending can lead to financial strain that lingers into the new year.

• Set a spending limit: Create a budget for each person on your gift list and stick to it
• Get creative: Handmade gifts or acts of service can be just as meaningful as expensive items
• Shop smart: Look for sales, use coupons, and take advantage of cashback apps

4. Plan Ahead for Unexpected Expenses

Holidays can come with surprise costs—think last-minute gifts, extra groceries, or emergency travel.

• Create a holiday fund: Set aside a small amount each week leading up to the holidays to cover unexpected expenses
• Avoid high-interest credit cards: If you must use a credit card, opt for one with rewards or low-interest rates and commit to paying off the balance quickly

5. Focus on Experiences Over Things

Some of the best holiday memories don’t come from what’s under the tree but from the time spent together.

• Plan budget-friendly activities: Host a holiday movie night, invite friends or family over for a craft night, go caroling, or drive through neighborhoods to see lights
• Give the gift of time: Offer to babysit, cook a meal, or help with a project as a thoughtful way to show you care without breaking the bank

With a bit of planning and creativity, you can enjoy the holidays without financial stress. Here’s to a season filled with joy, health, and financial peace of mind. Happy Holidays from all of us at Medcom Benefit Solutions!