What does FU mean in terms of money and savings?
FU money (aka f*ck you money) is a term that best-selling author Dan Lok popularized. It refers to having enough wealth and financial independence that you no longer have to answer to anyone else if you don’t want to. FU money gives you the freedom and breathing room to live your life on your terms with enough money for living expenses.
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What Is FU Money?
FU money is a term used for an amount of money you have saved up if you want to walk away from your current job and is different from an emergency fund. Having FU money put aside gives you the freedom to work with less stress because you have money saved if you no longer want to deal with your current workplace.
Why Is FU Money Important?
F*ck You Money is important because it gives you the freedom to do what you want with your life. For example, if you have a job you hate, FU money can allow you to walk away from that job and find something more fulfilling while still having financial independence. It also means you’re not as reliant on others for financial support, giving you more independence.
Who Needs FU Money
Anyone who wants to have more freedom in their life can benefit from having FU money saved up. This includes unhappy people with their current job, those who want to retire early, and anyone who wants to be less reliant on others for financial support. In addition, having FU money gives you the freedom to do what you want with your life, like exploring various income streams, starting your own business, or entering retirement.
How Do You Build FU Money
To build financial independence and live a happier life, you can save money towards your FU money fund. Follow along for some tips on investing in this process and your future.
1. Review Your Finances
The best way to start saving for FU money is by reviewing your finances, monthly expenses, and yearly expenses.
You can also become more aware of your financial security by knowing your credit score and using a personal finance tool to help you in the process. Once you have a clear understanding of your current financial situation, you can create a plan to save money for the future.
2. Cut Expenses
One of the best ways to save money towards your FU money is by cutting expenses. This includes looking at your regular yearly expenditures and evaluating what’s necessary and what can be reduced or eliminated.
A few tips for reducing your expenses include creating a budget, cooking at home, and canceling unused subscriptions. To have enough money, cutting back can help you save more money.
3. Put Money in Savings
One of the best ways to save money is to put it into a specific savings account. This allows you to grow your money while keeping it safe and accessible. You can start small by saving money by putting away as much money as you feel comfortable with each month, even if you earn a minimum wage.
As you get more comfortable, you can increase the amount you save. Another option is to set up an automatic savings plan, so the money is transferred automatically from your checking account to your savings account. So even after just a few months, your FU money account will begin to grow.
4. Boost Your Income
There are a few ways to boost your income, including passive income and multiple income streams. Passive income is money earned from sources that do not require your active involvement to generate and help save you precious time. This can include rental properties, dividends from investments, or interest from savings accounts.
Multiple income streams refer to having more than one source of income. This can include a full-time job, side hustle, your own business, and investments. Having various income streams can help you boost your overall income and help you achieve financial independence.
5. Be Strict With Your Budget
One way to be strict with your budget is to stay disciplined and remind yourself often of your financial independence FU money. This includes evaluating your living expenses each month and only spending what you allocated for that month. Then, once your allotted capital for that subject is spent, stay diligent in not spending more until next month.
Another option is to use a cash-only budget. With this type of budget, you only pay with cash for your expenses and do not use credit cards or other electronic payments. This can help you stay more mindful of your spending and better track where your money is going each month.
6. Invest
There are numerous ways of investing and growing your FU money. One option is investing in the stock market, which can offer the potential for growth and increase your net worth. Another option is investing in mutual funds, a collection of various stocks that can provide diversification and professional management.
Additionally, index funds are mutual funds that invest in stocks that make up a specific index, such as the S&P 500. Investing in index funds offers diversification and often has low fees, which can help you grow your FU money.
How to Calculate FU Money
When deciding how much to save for your FU money, you want to make sure it is enough money to help you achieve financial independence in life. FU money is different than an emergency fund or retirement savings.
What Is Your FU Number?
While everyone’s FU money number will be different, it is important to consider multiple factors when deciding your financially independent number. First, most people consider having their retirement financial goals met before building up their FU money so they will not need to borrow from that account.
Once that is settled, you can think about your situation. Imagine if you had quit your job, would you want to continue working at a regular job? If so, you may need less money to support your desired lifestyle. Remember, FU money is not an emergency fund but is to be used to give you more financial freedom, not enough to survive until the next job comes along. You should consider if you wish to enter retirement early or would take a job with equal or lesser pay.
How Much Money Is Enough?
So, you may be wondering how much is enough? Again, each person’s life and situation are different when considering how much FU money is enough to put away. You want to have enough money to allow you to be financially independent and live freer and with more control of your lifestyle. Not everyone will need the same amount of money to afford the lifestyle they wish. Consider your expenses, monthly bills, and debt when determining how much FU money is enough.
F*ck You Money FAQ
What Is the Difference Between FU Money and Emergency Money?
FU money differs from emergency funds in that it’s meant to give you the freedom to walk away from a job or situation you want out of, while emergency funds are intended to cover any unexpected costs you encounter. In addition, FU money is a long-term savings goal, while an emergency fund is a short-term goal to help you survive for 3-6 months.
What Is the Difference Between FU Money and Financial Independence?
FU Money is a great tool to give you peace of mind as you reassess your work situation when leaving a place that no longer serves your wishes or goals. This stopgap of money is meant to help you live comfortably for a time until you can get back to a paid job. The idea of FU money can significantly help you to reach financial stability in the long term by giving you time to find a new place.
Where Did the Term FU Money Come From?
The term FU money is often associated with the fire movement. The FIRE movement stands for financially independent / retire early and represents those who wish to live more financially free and work on their terms. The goal here was to have wealth and not be living on your employer’s terms but rather your own.
The Bottom Line
People often find themselves working for a business that is spreading them too thin and wish they could have a safety net in place to leave. Many wish to have financial independence and work a fantastic job that can pay well without as much stress. Saving money to build up FU money can help you be prepared to leave a stressful job if you need it, knowing you can take time to reassess what you want.
Samantha Hawrylack is a personal finance expert and full-time entrepreneur with a passion for writing and SEO. She holds a Bachelor’s in Finance and Master’s in Business Administration and previously worked for Vanguard, where she held Series 7 and 63 licenses. Her work has been featured in publications like Grow, MSN, CNBC, Ladders, Rocket Mortgage, Quicken Loans, Clever Girl Finance, Credit Donkey, Crediful, Investing Answers, Well Kept Wallet, AllCards, Mama and Money, and Concreit, among others. She writes in personal finance, real estate, credit, entrepreneurship, credit card, student loan, mortgage, personal loan, insurance, debt management, business, productivity, and career niches.