Building an F-You Fund

I just learned about a new type of savings fund – an “F-You” Fund.  Yes, that stands for exactly what you think it does, and it has a pretty fabulous name for a pretty fabulous fund.

An F-You Fund is basically a big emergency fund, enough money to cover 6-8 months worth of expenses, so that if things are going terribly at your job, you can give it the old F-You and quit without worrying about how you’re going to make ends meet until you find a new job.

What’s the point of an F-You Fund?  According to this article,

It’s simply security to make sure that you’re not stuck at a job… You have freedom of not just finances but also freedom to do what you love day in and day out.

One big key to building this fund is the emotions behind it.  You can’t already be in a place where you want to run screaming from your job.  If you’re already extremely frustrated, the process to pulling together this money will be a huge emotional challenge.  Instead, this should be a plan to protect yourself.  It’s your golden parachute in a way.  If you are ready to get out, that’s when you will tap into this fund.

How in the world are you supposed to build this fund?  The same way you put together your emergency fund, and in my opinion, you can also consider it to be your emergency fund.  (Just make sure that you’re not going to need both an emergency fund and an F-You fund all at the same time.)   So if you’ve built up your emergency fund and want to keep contributing to it, an F-You Fund is the way to go.

Building the F-You Fund takes the same steps that you follow to build an emergency fund:

1. Figure out how much you need
2. Live below your means
3. Save automatically
4. Keep the money out of reach

Now, I’ll be honest – I’m nowhere near being able to build an F-You Fund.  My emergency fund is smaller than it should be, and I’m also trying to put together some money to do some home improvement projects.  But the idea of having an F-You Fund is very appealing.  Even though I have a job I love and don’t anticipate leaving anytime soon.  This is exactly when I should be setting one up.

One big goal this year is to increase my savings amounts, so maybe starting up an F-Fun might be one of the methods I use.  Even if it takes years to get it complete, it’s never a bad idea to save money.

Do you have an F-You Fund?  Have you considered starting one?  Have you ever decided to use your F-You Fund?

Megan Smith

Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.