FU Money: What Is It And How Much Money Is Enough?

One of the most defining moments of your life can be realizing you have reached a state of having “FU Money.”

It’s money that leaves you feeling comfortable, with less worry about the state of the economy, and gives you an “out” if something were to happen to your income. 

Unfortunately, traditional jobs are something that many rely on for each paycheck and you are at the mercy of the company.

One day, they can just decide to let you go — even if it has nothing to do with your work performance. 

The reliance on that income without proper planning can set up many people for financial disaster. But the best way to hedge against this is by building a nice buffer.

So what is FU money and how much money is enough for you to reach this status? 

What is FU Money?

FU money means that you have reached a state of financial stability, where you no longer rely on a specific job for a paycheck. You have enough money saved and invested that now you are the one in control as to whether you’ll stay at your job or not. 

But while toxic work environments and horrible bosses make FU money that much sweeter, you may also like your work and company.

However, having FU money ensures that if the company were to go under or you lost your job for uncontrollable reasons (like COVID-19), you’d be fairly stress-free. 

If we want to simplify it in a more vulgar way, FU Money = Fuck You Money. This is money that allows you to live and choose to do as you please. Bye-bye boss and job, I don’t need your paycheck! 

Isn’t FU Money Just An Emergency Fund?

You might be thinking that having FU money sounds similar to what you put in your savings for an emergency fund. While the concept might have some overlap, there are some key differences to note here. 

Emergency funds are set aside for unexpected expenses or to help hedge against a lack of new income for a few months. It’s there to help you get through a difficult time or an important life event you know you’ll need money for soon. 

FU money not only includes what you might need for your emergency fund but goes well beyond that.

This type of money saved and invested will sustain your cost of living well beyond six months. And it affords you to choose whether to work or not.  

It can be money that helps you achieve financial independence, but it also doesn’t necessarily mean it will last the rest of your life.

Why FU Money Matters

As you can probably imagine after reading the above, you are starting to get more of an understanding of why FU money matters. But, there are quite a few reasons you’ll want to work towards this financial status. 

First, a lot of work environments, jobs, and bosses can cause you to hate your job and want to escape.

And the data out there shows that is true. 

  • According to a study by stress.org, 40% of workers reported their job was very or extremely stressful and 25% view their jobs as the number one stressor in their lives.
  • 56% say they are less than fulfilled with their work. And it was found that 26% of employees “dread going into work.” (High Cost of a Toxic Workplace Culture)

Here’s why FU money matters and is powerful:

  • Gives you more control of where and when you want to work
  • You don’t work for money, instead, you make money work for you 
  • You’re not dependent on a weekly or bi-weekly paycheck for a period of time
  • Removes stress about money that you might be feeling
  • Provides you with more options in your life and career
  • It lets you explore new career paths or to be your own boss
  • Gives you the opportunity to take a break and reset for a period of time
  • You can treat yourself in moderation without feeling guilty about spending

The ones are the few that stand out to me, but you might have even more reasons that FU money would matter to you.

Regardless, I don’t know anyone that would not be interested in being able to do any of the above in the list. 

Extra: FU money is also a great way to get you on the right path to future wealth. While you might want to get rich — in the rich vs. wealthy debate — wealth is always the preferred status.

Who Needs FU Money?

Everyone should pursue FU money in some capacity. Not everyone will reach it and not everyone will have the same amount or time frame to get there. And It’s also based on personal situations and the efforts put in to reach this status. 

But even if you love your work and job, building an FU money foundation can help you decide if you rather work a part-time job, choose a different place of work or take a break, start your own business, or even help you retire early. 

But having this kind of money saved can also protect you in case something does happen to your company where you lose the job you enjoy.

The last thing you want to do is scramble to figure out how to pay bills, groceries, and your rent or mortgage. 

Why FU Money Matters To Me

I was in a work scenario back in 2014, where I was dissatisfied with my career but I had a few things going against me. 

  • My resume was all over the place
  • I was applying for jobs but not hearing back
  • I had plenty of debt still and no real savings 

Fortunately, I did not have a bad manager or team but I was stuck in a cube farm that did not pay well. 

But I still was early every day and always did my work well. And then a few weeks before Christmas 2014, I was laid off along with hundreds of others. 

Naturally, I was in a panic because who is going to hire me over the holidays? Additionally, I had no money saved and I was living in an apartment on my own already living paycheck to paycheck. Most of this was my own fault for being an unprepared twenty-something. 

Fortunately, I did have severance pay with the company for a few weeks and was able to get some freelance consulting work.

But that moment of financial stress helped me get on a better financial path and to ensure I never felt this way again. And that’s where my own FU money journey began. 

How Much Money Is Enough? 

Reaching the status of FU money means that you will indeed need quite a bit of money saved and ready to be used.

But how much money is enough for you to reach this status? 

As I mentioned earlier in the post, the amount you need will vary pending on various factors. This can include:

  • Your monthly and yearly expenses
  • If you have any debt to pay
  • Your income and how you budget
  • How aggressive you save and invest

We’ll get into how to build FU money in the next section. 

But to answer the question of how much money you’ll need, you should think about what your financial goals are for obtaining this level. I like to think of it into two different scenarios.

  • Short-Term FU Money
  • Financial Independence FU Money

Short-Term FU Money

This is money that you save and invest to get you to through six months up to two years or so. Meaning, you can afford to quit your job and cover your expenses comfortably for a sustainable period of time. 

However, without additional income, you would run out of money eventually. 

At this level, it’s more attainable to reach because this money won’t last you the rest of your life and is a bit easier to achieve. 

But short-term FU money provides more cushion than a traditional emergency fund. It gives you options to live on your terms and control what your next moves are in life.

It will also protect you if an unexpected job loss happens, which can also give you peace of mind. 

Financial Independence FU Money

Now, if you want to take your financial life up a notch, then you’ll want to work for financial independence FU money. 

Naturally, your first phase is short-term FU money, but you can start being more aggressive and have an end goal to retire early or never work in your field again.

Many people do like the idea of financial independence / retire early (FIRE), but it can be more challenging to do. 

For one, you’ll need to invest more aggressively to reach your number that you could live off the rest of your life.

Usually, this is 25x your yearly expenses. So if your yearly expenses and spending is roughly $36,000 — then your FIRE number conservatively would need to be $900,000.

And this is also where the 4% rule becomes important. 

According to Investopedia:

“This rule seeks to provide a steady income stream to the retiree while also maintaining an account balance that keeps income flowing through retirement.”

Meaning, you can now live off your investments for the rest of your life and do not need to work to bring in income anymore (if you choose). 

A lot of people think this is the dream, but there have been plenty of early retirees who go back to work or start businesses. I see this version of FU Money as the long-term plan to do whatever you choose for your entire life.

How Do You Build FU Money?

FU Money, regardless if it’s short-term or long-term, will require you to have a large amount of money saved. And the amount you need and how soon you can get there will depend on your income, expenses, and efforts. 

Here’s how you can on the right path. 

1. Get an overview of your finances

If you don’t have a general financial picture of your life, it’s going to be challenging to know where you need to start.

To achieve FU money, you first must know simple things like your cost of living, overall expenses, what income you’re bringing in, how much you save per month, etc. 

This can immediately help you understand your net worth, where you need to make improvements, and the best course of action to take. 

2. Start cutting expenses and saving money

I’m not here to tell you to stop spending money on things you enjoy completely. While frugal living can definitely make an impact, you don’t have to go to extremes. 

Instead, focus on the big areas: housing, transportation, and food. But also look at things you can live without or do not need, and cut back. 

You can easily find areas where you can start saving some money. It might not be thousands (maybe it is), but you can easily find hundreds of savings per month (or year). 

The key thing when you start cutting expenses is to bank the difference instead of more frivolous spending. If you want to improve your savings rate quickly, here are some ways to save money fast

Additional tools to help you include the free cashback app Ibotta, save on bills with Trim, and save money on electricity with Arcadia.

3. Boost your income

At some point, you won’t be able to cut any more expenses.

While you want to live within your means, you also do not need to deprive yourself completely. However, you will hit a wall where there is nothing more you can do to cut back. 

That’s why you must increase your income as well. And with that increase, again the important part is saving or investing that income.

Often, people fall into lifestyle creep when income increases and become slowly comfortable with higher standards of living. And you know the stories of multi-millionaires going bankrupt, which happens more than you may think!

Increase your income in various ways:

4. Be meticulous with your budget

No one said budgeting is exactly fun, but it doesn’t need to be a massive bore either! If you want to reach FU Money, you’ll need to be meticulous with your budget to hit your goals. 

Keeping detailed records and updates to your expenses will help you boost your saving and investing rates. It will help you catch any financial problems and keep track of any debt you may need to pay off. 

There are plenty of ways to go about organizing your budget. You can use simple spreadsheets, create a budget calendar, or use various personal finance tools that organize your financial life.

If you need more aggressive budgeting, you can even try a more physical method with the cash envelope system

Whatever you decide, stay on top of your budget and FU money will be much more attainable. 

5. Start investing 

Cutting expenses, increasing your income, and saving money will definitely set the foundation to help you achieve financial independence. But to elevate your timeline and put your money to work, you’ll need to start investing. 

However, investing can be confusing, and might be hard to know where to start. But we are living in revolutionary digital times, which means investing is more accessible — even if you only have a little money to invest

Remember, investing is not full-proof and there is always risk involved. I always recommend people look into the three fund portfolio, which keeps investing simple and with index funds to get broad exposure.

Additionally, there are numerous micro-investing apps that help you get started with as little as $5. 

If you want more help or looking to take your investing to the next level, you might be interested in Morningstar (they offer a free trial) or The Motley Fool’s Stock Advisor premium services. While these are paid, the ROI is definitely worth it.  

Whatever you decide to do, investing will help your money compound over time and help you reach FU money status faster than just putting money in a savings account.

Remember to take advantage of a company 401k if your work offers one, otherwise, a Roth IRA or Traditional IRA might be right for you. 

Good luck on your FU money journey! It can be a game-changer.