Almost two years ago, I told you about the importance of F U Money in this post. Well, it happened again.

What is F U money?

As you already know, I’m aiming for FI (Financial independence). I explained what it is in this post. However, before you reach FI, you will pass the point of having “F U Money”, a term coined by JL Collins (author of “The simple path to wealth”, the best personal finance book I’ve ever read).

Having F U Money, in simple terms, is having enough money not to be pushed around. It’s the ability to say to your boss “F U” if they’re being mean, rude, or just unreasonable. While it’s not enough to retire (like full FI), it still gives you much more freedom compared to a situation where you’re living paycheck to paycheck and relying on your job.

How to calculate your F U money amount

While FI can be calculated using the 4% rule, F U money is very subjective. It depends on how risk-averse you are. How much money do you need to quit a job you hate? Is it 3 months of expenses saved/invested? maybe 6? maybe it’s 2 years. Each of us has a different amount that allows us to sleep well at night.

Now, let’s see a few real-life examples of the importance of F U money.

My friend’s story

During the peak of the COVID pandemic, a friend of mine was forced to come into the office every day. I say “forced”, he could have quit. However, I’m not sure he had enough money in the bank to allow him to quit. So, he went in every day. It’s been over a year since he told me that story and it still makes me angry. You’ll be happy to know he quit a couple of months later and does not work there anymore.

My story

A couple of months ago, a few of my colleagues and I were told we are in danger of redundancy. It came as quite a shock but what happened later was fascinating.

Some were scared/worried, some were excited, and some (me) just got on with their life.

The offer

First of all, we got sent our redundancy “offer” in case any of us wanted to volunteer to be made redundant, it was based on how long you’ve been with the company.

Funny enough, one of my colleagues chose to take it. He’s been working for the company for over a decade and knew this kind of offer won’t come around again any time soon. He told me he always wanted to try contracting but he was worried that if it didn’t work out, he wouldn’t have enough money. And now, here’s someone offering him that money! I’m very happy and excited for him, talk about turning lemons into lemonade!

In case you’re wondering, I did not volunteer. While it was a very generous offer, I like my job and still have 3.5 (roughly) more years before we move back to Israel and I’ll happily do the same job until then.

The wait

Next, there was the wait. We had to wait to find out if we get to keep our jobs. I know some people who took time off due to stress. Imagine not knowing if your main source of income will still be there in a month without having enough savings/investments.

The verdict

Finally, they let us know. I got to keep my job, happy days.

Having F U money

At first, I was shocked. I was not expecting to be put at risk of redundancy. It wasn’t personal, our whole team was included, but still, I was shocked.

After talking to Lazy FI Mum about this, I realised there’s nothing to be afraid of, we have F U money. While I didn’t have to say “F U” to anyone, I did say it to the stress. We had enough money for me not to worry too much. In addition, the offer they sent would allow me more than enough time to find a new job.

I slept perfectly during that period. Well, at least as I did before, I do have two young kids. I was also able to go to Center Parcs with my family and enjoy my time stress-free. Again, as much as possible with two young kids.

During “the wait” period, I had some catch-ups with my boss. We barely talked about the redundancy risk, I couldn’t care less, we talked about work, and I got on with it. For me, having F U money allowed me to experience a potentially stressful situation with very little stress.

Lazy FI Mum’s story

Lazy FI Mum quit her job! *confetti in the air*, I’m very proud of her.

Do you know where she’s going next? She doesn’t either haha.

All she knew is that she wasn’t enjoying her job anymore. The opportunities to grow within her current organisation are limited, so she quit 🙂

Can you imagine handing in your notice without having your next job secured? Well, with F U money, it’s possible.

I have to clarify that she didn’t say “F U” to anyone, she’s quite sad about leaving, but she knows it’s the right decision.

Also, I can’t say it’s stress-free. Until she finds her next job, the uncertainty will probably be a little unpleasant but that’s fine. I’m sure she’ll find a new job in no time, and whoever hires her will be very lucky.

Her quitting is a unique twist on “F U” money because no one was mean to her and she didn’t hate her job, she just didn’t enjoy it as much as she used to. “F U money” allowed her to quit while she still likes the organisation she works for, she didn’t want to get to the point where she hates waking up in the morning knowing she has another day of that job (which is what I felt during my time in the Big 4).

Summary

F U money is awesome! That alone could be the summary but let me elaborate.

F U money buys you the freedom that lack of F U money can’t. It can help you stay safe and not have to go into the office at the peak of a pandemic (which still annoys me)! It can allow you to take risks and try new things (like contracting). F U money can help you sleep well, while others in a similar situation, are stressing out. Finally, F U money can allow you to leave your workplace on good terms while everyone still likes each other.

I like F U money not only because of all the things it allows you to do but also because it reminds me that FI is not the only goal. There are lots of milestones on the way to FI. F U money is one of them. The fact that we haven’t reached FI yet, doesn’t mean we don’t enjoy the fruit of our labour so far. Even being part way on your journey to F I still has it’s benefits.