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Have you ever wanted to rage quit your job?
Sometimes our work environments can become so toxic that we dread going in every day, and if we didn’t need to pay our bills, we’d say, “Screw this, I quit!”. FU money gives you that opportunity.
What is FU Money?
FU Money is a non-vulgar (even though everyone knows what we mean) way of saying we have enough money not to have to deal with the BS. I’m sure you can imagine what the “FU” in FU money stands for, right?
FU – I don’t need this job!
And that’s precisely what FU money is. It’s having enough money that we don’t need to deal with a stressful situation at work. We don’t need to deal with a toxic boss or busy-body coworkers. We can nope out of a horrible work environment whenever we want.
Don’t want to read the post? Watch the video instead!
Who Needs FU Money?
Everyone needs FU money. Employers have so much power over us because we need our jobs to survive. We need to pay the rent and put food on the table.
Even people who love their jobs and can’t imagine doing anything else need FU money. You never know when a beloved boss will be replaced with a horrible one or whether your workload and mission will change.
Wouldn’t it be nice if you had the power to walk away at any time? FU money gives you the financial security to say no to a job that expects too much of you or treats you poorly.
FU Money Vs. Emergency Funds
An FU fund is similar to an emergency fund, but there are key differences. An emergency fund is for one-time emergencies, like the car breaking down or paying the deductible on a hospital visit.
Ideally, you should have three to six months’ worth of living expenses in an emergency fund, which should sustain you for a short time if you unexpectedly lose your job. But generally, an emergency fund won’t be enough money to support you long-term, stress-free if you quit your job.
And that’s where FU money comes in. It’s having enough money to sustain yourself even without a job. It’s a whole lot more than just six months of living expenses.
FU Money and Financial Independence
FU money spawned from the fire movement, but it’s not the same. People who have this kind of money are still working because they like their jobs or enjoy work. The extra money is just a bonus -they are financially stable without their jobs.
Having this extra money gives them the ability to work with less stress. People with FU money never have to worry about losing their jobs, and they never have to stay in a toxic position just to pay the bills. They can leave whenever they want and pursue whatever they want out of their careers. Unfortunately, that’s a freedom that most of us don’t have.
The Freedom to Walk
I can’t stress how important the freedom to walk away from a toxic job is. And unfortunately, most of us don’t have that freedom.
Employers know – so they take advantage. They expect workers to come in when they are sick, deal with angry, verbally abusive customers with a smile, work extra hours, do the work of three people after downsizing, and the list goes on and on. Most of us grin and bear it because we need the money.
But could you imagine how different things would be if people had the power to say “No” and walk away from these outrageous demands? Work would no longer be miserable. Employers would have to take care of their employees. Businesses that preyed upon their workers’ need for a paltry paycheck would dissolve.
That’s not a bad thing. If a business relies on taking advantage of workers to be profitable, it shouldn’t be in business anyway.
It Sounds Like I’d Need a Lot of Money – How Do I Get it?
Yes, it’s a lot of money. Having FU money is very similar to being financially independent.
The difference is if you enjoy working, you don’t need quite as much because, in theory, you will eventually get another job.
So, before we determine how we get it, let’s define how much you need.
How Much FU Money Do I Need?
Generally, people who are pursuing FU money want to work. They are that rare breed of financial independence seekers who like their jobs, find meaning in their work, and want to continue doing it.
You can check out my quiz on what type of financial independence is right for you to see if that’s your type of fire. Most likely, you’ll end up with Coast Fire or Passion Fire if you want to keep working.
But that also means that you don’t need as much money to be at your desired flavor of financial independence.
Ideally, you should save for retirement and reach your Coast Fire number first. This way, you will have enough money in retirement savings to maintain your standard of living when you reach full retirement age. It’s always a weight off to know that you won’t be destitute when you can no longer work.
Next, you can start thinking in the shorter term.
Think realistically about what you would need if you quit your job. Here are some questions to ask yourself:
- Would you still want to work, or would you consider retiring early?
- How long would it take you to find a new job if you’d prefer to work?
- Would the pay be similar, or would you most likely have to accept less?
- How much money do you need to live while you’re looking?
I can’t answer these questions for you, but I can tell you that you should probably have enough money saved to live for at least a year. And when I say live, I don’t mean survive.
FU money is different than an emergency fund; it’s not just holding you over and getting you through it. It’s supposed to give you options. You should be able to live utterly stress-free for that year (or however long you will want to).
Calculating Yearly Expenses
To determine how much you need, add up your monthly expenses. Don’t forget to include your credit card debt, student loan debt, or any other random expenses you might have. Next, add any costs that might come quarterly or yearly, like insurance and taxes.
Include money in your budget for non-bill necessities, like food and entertainment. Add all of these things together, and that’s how much you need to live for a year. You should add a bit extra to be safe from financial emergencies.
Don’t worry if you don’t want to do the math right now – I already did it for you! The average cost of living for a year for Americans is about 45000. Depending on your individual situation, you may need more or less than that, and you want to make sure that you take inflation into account.
How Do I Get It?
I’m sure you realize how much money this will take – so the big question is, how do you get there? Like most things in personal finance, there are three main things you can do to build your FU money: Save money, invest more, and increase your income.
It always starts with saving money. You can do thousands of little things to spend less, and we have tons of resources on how to save money here on Partners in Fire. Here’s a list of posts, each with unique ideas to help you save money on various things. After perusing all these things, you should be able to develop a solid savings plan and cut back on things that aren’t important to you.
How to save money:
- Save Money by Cutting Cable
- Save Money on Groceries
- Save Money with Cash Back Apps
- Save Money on Heating
- Save Money on Basic Living Expenses
- Save Money by Moving
- 10 Overall Money Saving Tips
- Small Ways to Save Money
Most people can find at least one thing in these posts that will help them evaluate their spending habits and increase their savings rate.
You can also use an app like Trim, which will track your spending and tell you where you can make cuts. It’s free to sign up, and they don’t charge you anything until you start saving money. Even then, they only charge a percentage of the savings, so you can’t lose!
Budgeting and finding ways to save are the first steps in gaining control of your finances. Once you master that, you can move on to building wealth with investment returns.
The next step is investing. Interest on savings accounts has been historically low for most of my adult life. The golden age of savings accounts, where you could grow your money over time, is over. More than likely, you won’t even beat inflation with a savings account, so the best way to build wealth is to invest in the stock market.
But the question is – where? Where can you safely invest your money so it will grow and give you the ability to nope out of a toxic job?
No investment is guaranteed. We can never know what the future holds, and even something that seems like a sure thing can fail. Still, investing is the best way to grow your money.
No risk, no reward, as they say.
My favorite holding in my investment portfolio is Vanguard’s Total Market Index Fund. It is as diversified as possible, which helps mitigate the risk a bit. When investing, be sure to consider growth potential and volatility. Some funds may be better for growth but carry more risk, whereas others might not give you sky-high returns, but they offer less volatility. A mix of both is ideal for a well-rounded portfolio.
You can also sign up for a service such as MorningStar. Their premium service helps investors put their money to work for them. They monitor the markets and help you find the investments to help you reach your financial goals.
Investing for FU Money vs. Investing for Retirement
Your FU money needs to be invested in a non-retirement account. You need to be able to access your money penalty-free before you reach full retirement age, and you don’t want to risk your security in retirement by withdrawing these funds early.
That being said, you need to have both an FU fund and a retirement account. One tool that you can use for both is a Roth IRA. This investment vehicle allows you to put after-tax dollars into a retirement account and enable it to grow tax-free. You can withdraw any contributions you have made without penalty before full retirement age, but you can’t remove investment gains.
If you choose to use a Roth IRA as both, be sure that you aren’t risking your retirement by withdrawing. It’s also vital to read the fine print about your specific account and the tax implications of withdrawing before you do so.
To avoid risking any retirement income, I prefer to maintain my FU money in a non-retirement brokerage account. Everyone’s situation is different, and if you aren’t sure which is best, you should speak to a financial advisor.
Increase Your Income
The final step in gaining FU money is increasing your income. You can achieve this by producing multiple income streams or moving up the career ladder.
Starting a side hustle is the best way to create multiple income streams. If you don’t know where to start with that, check out this fantastic course – Launch Your Side Hustle. It’s comprehensive and filled with everything you need to know about making money. If that doesn’t convince you, check out the review, or you can grab your spot here.
The other way to increase your income is by improving your skills and getting better jobs. You can make more money by getting a promotion at work or job-hopping to other companies. To do this, you need to continuously update your resume and apply for any opportunity that seems like it could enhance your career.
There’s a ton of competition, so it may benefit you to get some additional certifications. Check out all the certification programs that Emeritus offers – they have tons of certificates in various fields. Something is bound to help you advance your career.
Making a Financial Plan
The truth is that although these steps are the same for everyone and pretty straightforward, your individual financial situation is unique and probably a bit complicated.
To achieve your financial goals, whether getting FU money, retiring early or just some type of financial security, you need to make a financial plan. Your plan needs to consider many things, and everyone has different answers to these things.
A Bonus -Fixing Society
There’s one last thing about FU money that needs to be addressed – and I alluded to it when I mentioned people having the collective power to say “No.”
There is a way to get FU money at the societal level.
We shouldn’t accept some of the things that we, as a society, have accepted. No one should have to tolerate a toxic work environment to put food on the table. Companies shouldn’t be able to exploit workers who have no other options. These things shouldn’t be happening.
The 20th-century solution to these problems was to unionize. And guess what – it worked! Workers were protected from unfair practices, we fought for and won the 40-hour workweek, and safety at work became a priority.
Unfortunately, I don’t think unions are the 21st-century solution to this problem. Companies will either relocate or automate instead of paying more to hire union workers. So, what can be done to give people power?
A UBI is a 21st-century solution to these problems. It would give employees breathing room to quit a toxic job. It’s basically the equivalent of ensuring that all Americans have access to FU money – a policy I wholeheartedly support.
From FU Money to Financial Independence to UBI
I’m sure that many of my critics will say that people should work and save to become financially independent if they want the privilege of FU money. And my argument is yes, not having to work is a huge privilege that people generally have to sacrifice and save to achieve.
I’m with you on that.
However, not everyone can reach financial freedom or retire early, given our current system. Not everyone has the ability to save money out of every paycheck or even access to bank accounts to save that money.
The poverty trap in the US is genuine, and so is the systematic racism that keeps certain groups stuck there. It’s disingenuous to assume that everyone can save, dig out of debt, and build FU money when there are literally people who can’t.
Partners in Fire is about helping everyone achieve financial independence, and part of that is promoting policies that would give everyone the same ability to pursue it. Giving everyone a little bit of FU money would help with that, and a UBI is a great way to make it happen.
Apologies, but Finance is Political
Well, we got a little off-topic there. Many finance writers will try to keep the political separated from the finance, and I understand. In a culture with so much political infighting, sometimes it’s better to appeal to everyone to ensure they get the information on reaching their savings goals.
However, I feel that personal finance is deeply tied to political policy, and I think it would be a disservice to ignore that reality. Not everyone will agree with my methods or takes, which is okay. Hopefully, we can find a way to meet in the middle to solve some of these problems inherent to our system. But we will never get there if we aren’t willing to talk about it and provide potential solutions.
Back to FU Money
So anyway, back to FU money. Now that you have all the tools you need – go out there and get yours! Start saving and investing so that you can leave a job you hate.
Give yourself the freedom to say F$@# YOU!
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.