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FU Money. That’s really what we all want, isn’t it? But what exactly is FU money – and how much does it really take to be able to say F@$% It!?
What is FU Money?
FU Money is a non-vulgar (even though everyone knows what we really mean) way of saying we have enough money to not 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 exactly 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.
Who Needs FU Money?
I think 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.
Wouldn’t it be nice if you had the power to walk away at any time? If you had the financial security to say no to a job that expected too much of you? That’s what FU money is, and why it’s so important.
FU Money Vs Emergency Funds
It does sort of sound like FU money is similar to an emergency fund, so what’s the difference? In my mind, an emergency fund is for one-time emergencies. These might be things 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, and that should sustain you for a short time if you unexpectedly lose your job. But generally, an emergency fund won’t be enough money to sustain 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 exactly the same. People who have this kind of money are still working, because they like their jobs or they 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. They never have to worry about losing their jobs, and they never have to stay in a toxic job just to pay the bills. They have the freedom to leave whenever they want to, and pursue whatever they want out of their careers. Unfortunately, that’s a freedom that most of us don’t actually 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 actually 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 a downsizing, 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 to 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 go under. That’s not a bad thing. In my opinion, if a business is relying on taking advantage of workers to be profitable, it shouldn’t be in business anyway.
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 basically the same as being financially independent. But if you enjoy working, it doesn’t have to be quite as much. So, before we determine how we get it, let’s first talk about defining how much you need.
How Much FU Money Do I Need?
Generally, people who are pursuing FU money want to work. They are those rare breed of financial independence seekers who like their jobs, who 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 in some way.
But that also means that you don’t need as much money to be at your desired flavor of financial independence. I would definitely recommend that you save for retirement and reach your Coast Fire number first. 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. Would you still want to work, and how long would it take you to find a new job? 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 to hold you over and get you through it. It’s supposed to give you options. You should be able to live completely 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 expenses 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 so that you are safe from financial emergencies as well.
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. You may need more or less than that depending on your individual situation, and you want to make sure that you take inflation into account.
How Do I Get It?
I’m sure you’re realizing how much money this will really take – so the big question is how to 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. There are thousands of little things you can do to spend less and I’ve written about it at length. Here’s a list of posts, each with unique ideas that will help you save money on a variety of 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.
- 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
I’m sure that everyone can find at least one thing in all of 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 is the first step 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 the majority of my adult life. The golden age of savings accounts, where you could grow your money over time, are 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 and all that, right?
My favorite holding in my investment portfolio is Vanguard’s Total Market Index Fund. It is as diversified as you can get, which helps mitigate the risk a bit. You should also look into Growth vs Value funds, and decide which option is right for you. It might turn out that you need a little bit of both. I prefer index funds to mutual funds, because they aren’t actively managed and tend to have lower fees, but to each their own.
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 that will help you reach your financial goals. Check them out.
Increase Your Income
The final step in gaining FU money is increasing your income. In my opinion, the best way to do this by building multiple income streams. Try starting a side hustle. If you don’t know where to start with that, check out this amazing course – Launch Your Side Hustle. It’s incredibly thorough and filled with everything you need to know about getting started and making money. If that doesn’t convince you, check out the review, or you can just grab your spot here.
The other way to increase your income is by improving your skills and getting better jobs. This can be through a promotion at work, or by job hopping to other companies. In order 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 certificates. Check out all the certification programs that Emeritus offers – they have tons of certifications in a variety of fields. Something is bound to help you advance your career.
A Bonus -Fixing Society
There’s one last thing about FU money that needs to be addressed – and I kind of 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.
What I mean by that is 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 in order 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 work week, and safety at work became a priority.
Unfortunately, I don’t think unions are the 21st century solution to this problem. Instead of paying more to hire union workers, companies will either relocate or automate. So, what can be done to give people the power?
A UBI is the 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 – and that’s a policy that I’m onboard with.
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 for. I’m with you on that.
However, given out current system, not everyone has the ability to reach financial freedom or retire early. Not everyone has the ability to save money out of every paycheck, or even access to bank accounts to save that money in. The poverty trap in the US is very real, 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 out there 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 really help with that, and a UBI is a great way to make it happen.
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.