How ‘F-You Money’ Can Help You Live More Freely

Chances are that if you were over the age of ten in 2020, you are fully aware of how detrimental it was for many individuals. 2020 showed us just how fragile life can be. 2020 also showed us the enormous holes in the systems here in the U.S. when it comes to a financial safety net.

There are many things that you tend to take for granted when you are safely on the shore. But when water reaches you or you end up being in deep waters, you realize that money can help you through many of life’s circumstances. Money can literally save you from several critical situations, be a bad job or a bad marriage. 

Why Should Financial Independence Be Your Goal in Life?

The term ‘FIRE’ is often discussed in news articles and financial blogs, but the most important component of FIRE is the FI. Financial independence or ‘FI’ for short is more than just another acronym. Full financial independence is having enough money to pay for your lifestyle without having to be employed and dependent on others. Financial independence is the realization, and the sound thought that whenever life turns its tables on you, you will have a strong stock of money to rely on. This should be a target for everybody because it is more than just another #moneygoal.

Instead, reaching financial independence is about your bigger financial picture and overall wellness. Your finances should eventually get to the point where you are not left with more days than dollars at the end of the month. Achieving true financial wellness through financial independence will give you the freedom to choose different life possibilities and be in the position to execute them. 

What Is ‘F-You Money’?

The term ‘f-you money’ is the idea of having enough money set aside to leave a bad job or bad relationships in life. This is the concept of not struggling in poor life situations just because you are not financially strong enough to take a step back. 

Getting to Your ‘F-You Money’ Number

First, you must calculate your monthly costs aka how much it costs you to live comfortably. Think rent, electricity, groceries, etc. This is not just a ramen noodle budget, but instead the amount that still allows you to enjoy the comforts of your day-to-day life. Next, multiply that monthly number by the number of months you feel most comfortable with.

The amount of ‘F-You Money’ depends primarily on one’s risk tolerance. For some, 6 months of ‘F-You Money’ funds is enough to sustain them. For others, that amount is closer to a year or more.

How to Practice the Idea Of ‘F-You Money’?

To practice this concept of ‘F-you money,’ you will have to devise a plan to save money. It cannot be possible by only earning more. If you are earning more and spending more as well, you might end up not saving anything. Therefore, you need to plan on earning and saving money. 

Hence the following few steps can help you get your financial life in order:

1. Visualize and create your plan. 

This is step number one! You must know what it is that you want for yourself. Not what number is good for your mom, your co-workers, your neighbor Joe. Nope! This is the plan for you. What are your financial goals and desires in life and how can you make them come true?

2. Assess your budget. 

A lot of people hate the b-word, and we get it. Call it a spending plan instead. No matter what though, you need to understand where your money is going. That is the only way to start making changes. 

3. Spend less than you are earning. 

Ahh, yes. You can in fact spend more than you earn. It is actually very easy to do and I used to do it all the time. Start by looking at your budget to see where you can downsize your expenditures. Maybe you spent $200 on eating out last month. Can you work to decrease that by 10% this month and instead spend $180? Baby steps still take you forward.

4. Build safety nets smartly. 

I used to spend every dime of my paycheck. Sometimes more. Now, I put away a certain amount of money each paycheck to ensure that I am not spending more than I am bringing in. Set up safety nets, such as automatic transfer, to ensure that you are saving for a rainy day.

5. Eliminate and get free of high interest debt. 

Debt. Some are more gnarly than others. If you have high interest debt (5% or more) focus on tackling those first using the Debt Avalanche method.

6. Consider your career moves carefully. 

This works for those who work for themselves or for a company. Consider planning for certifications and other moves that can 10x your skillsets and thus your income.

7. Invest in low-cost index funds.

I can go on and on about this and quite honestly, I often do. Low-cost index funds are the way to go when building towards financial independence using the stock market.

Following these few blueprints will save you from falling on a bumpy road and bring you closer to financial stability. 

Why F-You Money is Critical for all but Especially Millennials?

Financial Independence (through an F-You Fund or a larger sum of money) is key for all but especially millennials. According to an article by CNN, we are the first generation to do worse economically than our parents. We were not afforded the same luxuries as those who came before us and quite frankly skipping out on avocado toast will not get us to financial wellness. It is incredibly unfair that we had to come of age into not one but two economic crises, however, that is our current reality. We need to take actionable steps and get a hold of our finances step-by-step. One of the first steps being, getting a stash of ‘F-you money.’

About the Author

On The Goe is a personal finance and lifestyle website that helps empower millennials to live their lives as they’ve always imagined. We want you to gain the confidence and knowledge to be able to create a sound financial future. As we always say, “The more you know, the further you will go!” You can check out some of our free financial resources here.

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