I’ve had many challenging jobs over the years. I used to be the person to persevere through even the hardest challenges. For example, I worked as a street canvasser in NYC for a year in 2009.
What is a street canvasser, you ask? Have you ever been stopped by someone on the sidewalk in a big city? Did this person ask you to hand over your credit card and commit to a monthly donation to some sort of charity? (Note: This was before the age of iPads. I was literally using a crayon to take a rubbing of their credit card.)
I’m sure you can imagine it was the worst job ever.
Street Canvassers stand on their feet all day long, try to talk to strangers, and hear the word “No” at least 100 times for every yes.
The job was so challenging that only an estimated 50% of new hires made it past their first three days. Only 10% passed their third week. In the NYC office, only 1% made it past their first 3 months. Yet, I persevered to become the fourth top fundraiser in the country, despite my hatred of the job.
I was a recent college graduate in the midst of the great recession. I didn’t have a lot of options.
Despite all my determination and grit (or perhaps because of it), I’ve experienced depression and anxiety throughout my life. It’s become clear over the last few years as I’ve learned to manage it more effectively. When I look back on my younger years, I can now see all the signs and symptoms.
3 years ago (over the course of 2018), I was struggling with severe burnout and depression. One day in July, things got extremely stressful at work. I woke up at 3 AM with a severe panic attack that lasted for 3 hours. Afterward, I knew that I physically and emotionally could not go back to work.
I found myself in a very challenging position. My identity was wrapped up in my career and being the feminist who could climb the corporate ladder. And, I had always been the person who “pushed through” challenges.
Yet, my body was literally shutting down my ability to do something as simple as think about work or open my work computer. I now realize that because I didn’t consciously choose to get out of the bad situation, my body chose for me.
While this experience was very challenging, it taught me some important lessons about putting myself first.
A key financial concept known as Fuck You Money gave me the confidence to move forward in a way that prioritized my health and happiness.
I’ve also had more recent realizations about Fuck You money. I originally thought that the sole purpose of Fuck You Money was to be able to get yourself out of a bad situation. After becoming an entrepreneur, I see that it can also allow you to take advantage of an opportunity. Fuck You Money provides the financial and emotional safety net needed.
This is the main reason why I decided to rewrite this post (originally written in the fall of 2018) in March 2021. With all the benefits of hindsight, I wanted to expand on the purpose of Fuck You Money.
What is Fuck You Money?
Fuck You Money (also known as F-You Money) means that you have enough cash on hand in an emergency fund or liquid investments to walk away from a bad situation or take advantage of an opportunity
To be clear, I don’t mean that you would literally say, “F-You” to someone. Instead, I mean that you are making a choice that’s right for you. You don’t need to take into account the ideas about what other people think you should do. You also don’t need to take into consideration the outcome for the person or situation that is causing your unhappiness.
The trick about Fuck You Money is that it’s both a number and a feeling. To have Fuck You Money, you definitely need to be in a position where you have a financial safety net. I would define this as having at least 3-to-6 months of expenses, which is generally how much is recommended for an emergency fund. Emergency funds are meant to cover your expenses if the worst happens. In rare situations, Fuck You Money could be even less if someone has the benefit of additional safety nets.
At the same time, to consider your emergency fund Fuck You Money, you also need to feel like you can use it!
If you don’t feel like you can use it, it’s not Fuck You Money. If it won’t give you the confidence to walk away from a bad situation, it certainly won’t allow you to take advantage of an opportunity.
Depending on your level of risk tolerance and current life situation, you may need more than a traditional emergency fund to feel like you have Fuck You Money. And, that’s okay.
The amount of money you need to feel like you can say “Fuck You” will, therefore, be different for different people. When figuring out your number, you’ll want to think through your responsibilities. Does anyone else depend on you financially? Does your career provide an unpredictable income?
You’ll also want to think about your non-financial safety net as well. Do you have family and friends who could provide support if things go sideways? Do you have income from a side hustle that you could scale up if needed? Do you work in an in-demand field that would make it easy to find a new job?
My First Exposure to Fuck You Money Changed My Life
I vividly remember learning about Fuck You Money for the first time. We listened to J.L. Collins’ book, The Simple Path to Wealth, on our way up to Maine in the summer of 2018. I remember it because it was just a week and a half before my mental breakdown.
In the book, he shares a story about when he was in his 20s and wanted to take a trip to Europe. He asked to take a leave of absence from work to do that. When his boss said no, he decided he was ready to quit and take the trip anyway. Why? Because he had $5,000 of F-You Money saved up.
Ultimately, his boss decided to work with him. F-You money gave him the negotiating power to do something he really wanted to do.
In this example, $5,000 was the amount of F-You Money he felt like he needed. This gave him the confidence that he could walk away from his employer and take advantage of this incredible opportunity.
I started to wonder, “What amount of money would I need to be able to do something like that?” I didn’t realize that I’d be putting that question into practice so soon.
Fuck You Money and Financial Independence are NOT the Same
After I started experiencing panic attacks and knew I needed to take some time off of work, I started to do more online research about F-You Money.
At the time, I was incredibly surprised that the vast majority defined F-You Money as the point where you reach financial independence. (Note: This seems to have shifted as people are embracing the ideas of incremental freedom and lifestyle design.)
These were a few of the resources I found at the time.
An article on Lifehacker defines F-You money as “any amount of money allowing the infinite perpetuation of wealth necessary to maintain a desired lifestyle without needing employment or assistance from anyone.”
The other blog (Save Money Retire Early) that I found at the time no longer exists. But, I wrote down how they defined F-You Money, so I can memorialize it here, “F–K you money is just financial independence, it’s simply financial freedom, it’s Early Retirement, it’s having enough money to choose the life you want to live,” after telling a story about how F-You money is the amount of money you need to walk into their bosses office, and say F-you and walk out.
There were even people who said that they feel like they’d need up to $10 million to feel like they have F-You Money. This would be enough to generate $250,000 per year in risk-free income.
I disagree that F-You Money and financial independence are the same.
F-You Money is simply having enough cash on hand to be able to put yourself first right now. It doesn’t have to mean that you can say “F-You” to every employer or bad situation for the rest of your life. It means you can do that for the time being without significant negative impacts on your quality of life or future plans.
F-You Money is simply one milestone along the path to full financial independence.
The Purposes of F-You Money
As shared above, there are two main reasons why you want to have F-You Money.
- To walk away from a bad situation without needing to worry (too much) about the financial ramifications.
- To take advantage of an opportunity.
Having F-You Money allows you to walk away from a whole variety of situations, such as:
- A toxic work environment
- A bad boss
- A terrible roommate
- A landlord that refuses to fix a mold or cockroach issue
- An abusive partner
In my case, I used my F-You money to walk away from a toxic work environment and a bad boss. I have a friend who walked away from a cockroach-infested apartment, losing her security deposit and last month’s rent.
As shared above, when I originally wrote this post, I thought the only purpose of F-You Money was to be able to walk away from a bad situation.
I now realize that it can also allow you to take advantage of opportunities as well. Because of F-You Money, I was able to take the leap to entrepreneurship before I could fully cover my salary with the income from my side business.
Others have used F-You Money to do things like:
- Taking a year off to travel the world
- Taking the leap to self-employment
- Building up a part-time freelance business to be a digital nomad
- Take a 6-month honeymoon to Hawaii and later travel to every national park (while doing flexible work)
- Take a 1-year sabbatical to spend more time with family and build a business
Financial freedom is not all or nothing. Having F-You Money can help you unlock so many lifestyle designs that can help you enjoy the journey.
How to Work Through the Barriers to Actually Using your Fuck You Money
Within the FI community, many people already have F-You Money, but I hear from so many people that they feel like they can’t use it. They have spent so much time and energy focused on saving every spare penny. Switching to spending some of that money to make life better (or even to just save a bit less) can feel really scary.
When I experienced my mental health crisis in 2018, I was thrown into a crash course on personal finance and F-You Money. Before then, I didn’t really care to understand the numbers. Now, I know that had I paid attention to finances earlier, I may have never gotten into this situation.
Looking back, I now realize that there were three things I needed to do to work through my mental barriers.
- Know my numbers
- Reflect on what the numbers actually meant for my life today
- Determine what else could be holding me back and make a plan to move forward
I’ll walk you through each step of the process using the example of how I decided to take a 6-month career break. I’ll also share how this process helped me take the leap to entrepreneurship.
1. Know Your Numbers
As I mentioned above, I was somewhat resistant to understanding our personal finances. I had a lot of negative perspectives about money, and I didn’t want to know about it. I am very lucky to have a spouse who was very diligent in managing our finances so that when I needed to use F-You Money, we actually had it.
In July 2018, I started to understand our finances for the very first time in my life. And, it changed everything.
You can know your numbers by looking at a few metrics:
- Size of your emergency fund
- Investments as a percentage of the way to FI or your FI timeline
- Current savings rate
In 2018, as I learned about our financial situation, I learned that:
- We had 9-10 months of expenses saved in our emergency fund.
- We had 4-5x our annual expenses saved and invested. Using the 4% rule of thumb, this meant that we were about 15-20% of the way to FI.
- Our current savings rate was around 50%. This meant that we saved half of our income.
- Based on our savings rate, we knew that we would be able to retire in 10 years in our early 40s if we kept everything the same.
Knowing the numbers was helpful, but it still felt theoretical. This is the stage where I was looking at our accounts, and it all still felt like monopoly money.
2. Reflect on what the Numbers Actually Mean for your Life TODAY
To feel like I could use the money, I needed to articulate what the numbers meant for my life in that moment. Money had always been something we saved for some unknown future date, so I needed a real mindset shift to consider using it to improve my life.
So, I started to reflect on what the numbers meant for my life at that moment.
I was pleasantly surprised to realize that the amount of money in our emergency fund would last us for 9 months if we both lost our jobs.
To be honest, realizing we were 20% of the way to FI wasn’t a super impactful number for me. What was more important was realizing that, if we kept everything the same, we would reach FI in our early 40s. We could take some steps to improve our lives now and still retire before the traditional retirement age.
The final important insight was around the 50% savings rate. I was originally thinking, “Great. If I leave my job completely, we have a 9-month runway.” Then, I started to really think about what having a 50% savings rate meant.
Corey and I made approximately the same amount of money at the time. So, a 50% savings rate meant that we could live on one person’s salary. We wouldn’t even need to dip into our emergency fund if I decided to outright quit.
I am so happy that I did this reflection. If I hadn’t, I know my desire to reach FI would have kept me stuck.
If I can give you any advice, it’s this: If you feel stuck in an untenable situation, don’t let your pursuit of FI be the barrier that keeps you from taking action.
3. Determine What Else is Holding You Back and Make a Plan to Move Forward
After realizing that we would be fine financially, it was still a hard decision to make. There were several things holding me back.
- My identity was tied to my career.
- As a feminist, I felt like it was my responsibility to climb the corporate ladder and bring other women after me.
- I had always been the person who “pushed through” challenges. I bought into the ideas of “mind over matter” and that “you choose your attitude.”
I am very lucky to have a strong support system. At the time, they encouraged me that I didn’t need to immediately make a decision about what I wanted to do. I could take it day-by-day. I could make a decision once I was in a better space.
Originally, I planned to take a few days off. That turned into a week. After two weeks of medical leave, my therapist encouraged me to apply for my company’s disability insurance. The insurance covered 60% of my salary until I was ready to go back. After that decision, we took it on a month-by-month basis.
Taking time to work through my thoughts allowed me to not make rash decisions. By staying employed and taking a medical leave, I was able to receive disability insurance through my company. That was the right decision for me at the time, but it was also good to know that I could quit when I was ready.
Once the disability insurance ran out, I ultimately decided to quit the job.
Using Fuck You Money to Take Advantage of an Opportunity
Six months after my mental breakdown, I went back to work part-time. I wrote a post about it if you want to understand more about that decision-making process.
The process was very similar:
- Knowing the numbers
- Reflecting on what the numbers actually meant
- Identifying barriers and problem solving
I also decided to quit this part-time job in late 2020 to become an entrepreneur. The process I took to get comfortable making the leap followed a similar path.
I started by knowing the numbers. Our emergency fund still contained over 9 months of expenses. Our savings rate had increased to around 60%. I knew we had reached Coast FI. Coast FI is the point where you’ve saved enough that you no longer need to save for traditional retirement. You can either choose to scale back and only cover your expenses. Or, you can know that every dollar you save is now contributing toward early retirement. I also knew that my revenue from my business in 2020 was equivalent to about half of my salary that year. My projections for 2021 would exceed my salary.
Even though I knew all of this, I still took a few days to reflect on what it meant for my life.
After a few days of reflection, I realized something important. Even if things didn’t go as planned, I’d have a least 1 year of a runway before I felt like I’d need to be generating significant income. And, this was more of a personal decision than financial reality. Technically, we could live off Corey’s income and still save money. I didn’t even need to generate income at all.
But, I knew I wouldn’t feel good about that. I want to continue generating income so that my husband has more opportunities to design his life as well. He currently enjoys his job, but I know how quickly things can change.
Had I not had a deep understanding of the numbers, I would have never felt like I could make the leap. If you want to hear more about my thought process, I’d encourage you to check out the full post on how I decided to quit my job.
Now I know that having F-You Money (and feeling like you can use it) can provide significant benefits now. I don’t need to wait until after I retire to start using that freedom.
In what ways have you used F-You Money? Are you faced with a situation (positive or negative) where using F-You Money would improve your life?