Most people have a specific goal in mind when it comes to saving money. Whether it be a family holiday, buying a car or some other big purchase.
But people rarely save money for a more profound goal; to have the financial security to be able to say ‘f*ck you’ to their employer or problem in life if things go pear shaped.
To some of you this may sound overwhelmingly negative or crass but sometimes things go wrong.
You can be restructured into a team you don’t like. You can be made redundant. You can be pressured into doing something you don’t truly believe is the right thing to do for you or the future of the business you work for.
The fund is also a way of mitigating other outside forces that can impact you, not just your employer;
- It could be your landlord raising your rent.
- It could be your bank upping your interest rates.
- It could be your partner losing their job.
- It could be a positive opportunity you wish to take but isn’t actually a financially smart move to make.
- It’s a curveball that life has thrown you whereby you are the victim.
Having a stash of money set aside to not feel trapped is the key here. It brings you a level of confidence and comfort to know that if something went unfavourably for you and your earnings, there is enough money to pay the bills, pay the mortgage and keep calm while you look for another job.
The FU fund lets you:
- Put yourself first when making decisions about money.
- Feel empowered to chase your passions, instead of a pay cheque.
- Feel confident that nothing can derail your personal life goals.
- Have a position of power when it comes to negotiating your true worth to a business.
- Sleep better at night knowing you can follow your moral compass without financial harm.
An FU fund essentially gives you the confidence to act on what you want to do in life. It enables decisions to be made that aren’t restricted by fear.
Fear of missing out, losing money, being unable to pay your lifestyle costs are what drives many people to become complacent and accepting of bad situations. They say life is too short for this type of stuff; but it wasn’t until I had an overly chatty taxi driver recently that a nugget of truth came out.
Life is actually too long to be complacent and fearful of change he said.
This rung home for me in a big way. While I’m not completely unhappy with my current job, I am someone who has become complacent and fearful of what would happen if I suddenly didn’t have a job with regular earnings coming in.
As such, I’ve taken it upon myself to reclaim my feeling of empowerment and self belief by actively creating a FU fund as a backup should something go wrong.
Here is my strategy.
I have three core goals to achieve;
- Save enough money to sustain my expenses for three (3) months.
- Cut non essential expenses to help expedite my savings for #1.
- Find ways to automate the FU fund so it continues to bubble away and grow during the good times.
I don’t want this FU fund to give me a negative outlook or start to sway my positive outlook on life; instead it’s something that I want to be ‘out of sight, out of mind’ while the good times roll.
What am I doing to create my FU fund and how long will it take?
Without revealing the exact total of money I am aiming to save, it’s going to take me about 6 months to save the correct amount of money I need.
I re-did my budget spreadsheet to factor in these new goals by tweaking expenses lower, apportioning regular contributions from our household earnings into the FU fund while also taking on a stretch goal to do more freelance work to get higher earnings coming in.
The break down is as follows:
- 15% of household monthly earnings are now redirected into the FU fund.
- I’ve stopped doing extra super contributions in the short term and intend to save those also.
- Using the Raiz App to round up purchases, invest the difference, so I can invest some of the FU fund in shares that could grow into more money.
Once off contributions:
- Any tax refund that we get this year, will go straight into the FU fund to help build it.
- I’ve started to better manage my receipts and expenses to help increase my tax refund.
Find extra money to contribute to the FU fund contributions:
- I’ve decreased expenses by cancelling and reducing a few major items; the savings of which now go into the FU fund.
- I’ve actively reached out to contacts offering freelance side work to increase my earnings.
- I’ve decided to try and get Savings Guide posting more regular content in the hope we can break a profit from advertising earnings (rather than just cover expenses).
Now that I’m super motivated to get this underway, I’m doing all that I can to make the FU fund a part of my monthly budget and ongoing goals.
Technically I will still be doing little beneficial things for my overall finances (like paying a little extra to my mortgage each month, staying out of credit card debt, depositing into my kids school fund and more) – I just now have one more prong in my savings strategy to help me sleep better at night.
So if things went unexpected for me, I would have the FU fund growing, some investments I could call on and extra cash I could potentially redraw from my mortgage if I really needed it.
Now I want to hear from you; what does an FU fund mean to you and have you ever had to use it?
Tell us in the comments below, I’d love to hear some stories about people who either have used this method or intend to use this method and how the FU fund has potentially saved you in the past.