Make Your Fuck Off Fund Happen
Today I read The Story of the Fuck Off Fund by Paulette Perhach. Read it. It may be one of the most important pieces you ever read. Male or female – it doesn’t matter. Everyone needs to make sure they don’t have to take shit from anyone because of financial fear.
To me, having a Fuck Off Fund means that you don’t have to ever settle in your life and you never compromise your personal safety.
Not a week goes by in my job where I don’t see a client who is in desperate need of a Fuck Off Fund. I see clients settling for loveless relationships because it’s too expensive to break up and they can’t afford to rent in an apartment on their own anymore. Others who are being emotionally bullied at work, but won’t say anything so they don’t get let go in the next rounds of lay-offs because they are “unlikable” or “difficult.”
I’ve also found that women feel super guilty when I tell them to save money for themselves in this way. They feel like money should be going towards “more important” goals – debt, down payment funds, the kids RESPs. It’s almost like women feel that saving up their Fuck Off Fund is a selfish act. There’s a lot of guilt.
Well, let me tell you: Saving for your Fuck Off Fund is one of the most selfless things you can do. When you know that you’re financially secure on your own, you don’t ever have to make fear-based decisions where you sacrifice your morals and your values. With a Fuck Off Fund in tact, your partner knows you’re there because you want to be, not because you’re stuck. You actually stay in your job because you want to, not because you’re afraid. You are a happier parent because you feel secure, not anxious and resentful all the time.
You know how on a plane, if the air masks come down, you put the mask on yourself first and then you help others? It’s the same with your finances. Safety first.
5 most important things to do for financial self-defense.
1. Never ever ever ever be “hands off” on the finances in the household. Don’t forget how to manage finances ever. You should always know how the household finances work, how your finances work so you can make empowered decisions.
2. Start small. Small changes make a big difference. $100 a month goes a long way. Paulette makes some great suggestions in her article.
“To build this account, you keep living like you lived as a broke student. Drive the decade-old Civic even after the fender falls off. Buy the thrift store clothes.”
• Clothing swaps
• Use points on credit cards
• Cut out small things (like one thing you can cut out a month)
You’ll need to be creative and sacrifice to build up your Fuck Off Fund. But, compromising now is important so that later on you don’t have to compromise your safety or your morals.
3. If you’ve got debt, like a line of credit with large outstanding balance, pay this money earmarked for your Fuck Off Fund to the line of credit first. This way, you’re saving on interest in the short run, but if you had an emergency, you can take the money from your line of credit. Do not do this with student debt since you can’t re-borrow it if you need to access your “Fuck Off Fund”.
4. If you don’t have debt, open a separate saving account and automate savings to this account so it actually happens. Don’t share this account with anyone. It’s yours. DO NOT COMBINE IT. It doesn’t have to be secret, but it doesn’t need to be shared. Ensure you won’t be penalized for withdrawing money from this account and ensure that there is NO lag time on accessing funds. Three business days is NOT acceptable if you are in an emergency.
5. Be patient. This may take over a year to save up. That’s OK. Be patient and do not get discouraged. Once it’s saved up, you can redirect these payments elsewhere.
HOW MUCH DO YOU NEED TO SAVE?
3 very important things:
Mad Money + First and Last Months Rent + 3 Months Worth of Fixed costs.
I suggest $1500 of Mad Money. This is for emergency spending. Flights, hotels, gas money – whatever it is you need to get out of a situation you do not want to be in and time to figure out where you need to live – probably a week or so.
So that if you need to say “Fuck off” you can go somewhere right away and not worry about money if you need hotels, gas money or flight.
First and Last Months Rent
Ensure that you first and last-months rent saved up. Ensure it’s a realistic amount. Always stay “in the know” of market rental rates so you don’t get blindsided.
Make sure that the rent saved up is not above 40% of your after-tax income. i.e. if you make $3000 a month after all deductions, rent shouldn’t be more than $1200.
So, in this example, you need $2400 saved. Ensure that you can afford a place within close proximity of your best friends and family. Isolation = not ok. If the amount that is 40% of your after tax income would not afford you this, add on the ADDITIONAL amount you’d need for 12 months of a lease.
i.e. You need $1500, but 40% of your after tax income is $1200. You need to save an additional $300 for a rent-buffer for a year lease. $300 X 12 = $3600 + $2400 = $6000.
If you need to get out of a relationship ASAP, you can leave and get an apartment near your support system and feel like a human being.
3 Months Fixed Costs
Ensure that you have three months worth of fixed costs. In the event of job loss, you still have bills to pay and you still need to eat. I call this your total “CRACK THE NUT”.
Total Crack The Nut
Total housing (all bills and utilities as well as mortgage/rent) $1000
Total transit (necessary only without job) $100
Total medical (Prescriptions, toiletries etc) $40
Total obligatory expenses (debt payments, car loans, gym, bank fees) $200
Total groceries (not including takeout – legit feeding yourself) $400
Total other non-negotiable $10
Figure out how much you cost to crack the nut and multiply by 3.
$1650 x 3 = $4950.
If you need to quit, you likely don’t qualify for any employment insurance where you live. Usually, these types of government programs are only available if you get laid off. So, if you know you can survive for 3 months without making a single penny, you can be like “Fuck off” and breath easy knowing that you’ve got at least 3 months of survival.
Ideally, we’d have all three saved up.
Mad Money ($1500) + First and Last Months Rent ($2400)+ 3 Months Worth of Fixed costs ($4950)
In our example, you’d have $8,850 in savings. This is a ton of money. I get that.
So, if this is not 100% realistic, at least save up $1500 Mad Money + the higher of the two. So, in this case $1500 + $4950 = $6450.
Making your financial security a priority is not selfish nor is it “irresponsible” to have this money sitting in a savings account “not working for you”. Sure, it may not be earning dividends or capital gains, but rest assured – it IS working for you.
Your Fuck Off Fund is keeping you safe and empowered so you never have to settle for a shitty situation.