Life does not always work out the way we want it to. The end of a relationship could leave you on a friend’s couch, or you could lose your job without notice, leaving you without a steady paycheck, healthcare or matches to your 401K contribution.
Oftentimes, we do not have control over the unfortunate circumstances in life, but we do have control over how we handle them. Having access to a “fuck off fund” — the term first coined by writer Paulette Perhach in 2016 — is imperative because you never know when you will need emergency savings to help you crawl out of life’s dark holes.
“I was working at a well-paying job for the first time in my life, and [consequently,] had a few thousand dollars in the bank for the first time after a few abusive situations,” says Perhach in her viral Fuck Off Fund essay. “I realized how differently those situations would have gone if I hadn’t had that ‘fuck off fund’ money saved up.”
Starting a “fuck off fund” will help you escape and feel at ease after a f*cked up situation — and feel incredibly liberating. But the path towards complete financial freedom isn’t easy. Unfortunately, many women today do not have thorough knowledge about finances. According to the findings from the 2018 TIAA Institute-GFLEC Personal Finance Index report, men, on average, performed better when answering questions on a test of various subjects about money, including saving, earning, investing and more. The results were disappointing for women, as 21 percent of men answered 76-100 percent of the questions correctly, compared to only 12 percent of the females surveyed.
Regardless of your gender, millennials are facing major hurdles when it comes to saving, according to a recent report from the Federal Reserve Bank of St. Louis. The report found that millennials and those in Generation Z are being weighed down by stagnant wages and student debt, and saving for retirement (or in this case, an emergency fund) means they will have to work longer than the Baby Boomers before them.
Whether you are already on your way to building up a healthy “fuck off fund,” or you are just in the early stages of your emergency escape route, we have enlisted financial experts for their best advice on working your way up to ultimate financial freedom. Of course, reading this article will definitely help you get on the right financial track, but do not forget to utilize other resources, like books, podcasts or apps, to guide you towards financial freedom. We love Gaby Dunn’s funny “Bad With Money” podcast, the Mint budget-tracker app, and The Financial Diet: A Total Beginner’s Guide to Getting Good With Money by Chelsea Fagan, to name a few.
Save, Save, Save
While there is no magic number or percentage you should save from every paycheck, personal finance expert and author of Get a Financial Life: Personal Finance in Your Twenties and Thirties, Beth Kobliner, suggests taking stock of what your living expenses are each month (like rent, food and bills) and then making a goal of saving up to three-to-six months’ worth of money you would need to live if you were without a paycheck. “Once you’ve tackled any high-rate debt (like credit cards or private student loans), try to save between 10-15 percent of every paycheck overall, a portion of which should go to building your emergency savings cushion,” says Kobliner.
If the thought of saving six months’ worth of emergency savings feels too daunting, Erin Lowry, personal finance expert and author of Broke Millennial Takes On Investing, suggests focusing on having at least one month of living expenses saved as the bare minimum. It is also important to evaluate the riskiness of your current job. “If you believe a recession means you’d lose your job quickly, then strive to have at least three months set aside.”
Best Saving Practices
Both Kobliner and Lowry advise setting up an automatic payment that will transfer into your “fuck off fund” every month. Although it would be great if you could put aside at least 10-20 percent of your paycheck, Lowry realizes that is often not doable. Instead, she suggests small increases. “A small way to push yourself forward is to increase how much you save by 1 percent every three to six months until you hit your desired savings target,” says Lowry. “You may want to save 15 percent of each paycheck but going from saving 5 percent to 15 percent overnight is a huge shift.”
Take It to The Bank
To avoid taking money from your “fuck off fund” when it is not an actual emergency, Lowry suggests depositing your day-to-day checking and your emergency fund at separate banks. “This helps reduce the odds that you’re going to be tempted to move money, even just a little bit, to your checking account for today’s impulse urges,” says Lowry. “It also helps that it usually takes a couple business days for that money to transfer over, which reduces your ability to spend it on a quick indulgence.”
Lowry loves the idea of changing the name of your emergency fund from a generic name, such as “Bank Account 76958698,” to “Emergency Savings,” “Quit My Job Fund,” or “Fuck Off Fund.” “Many banks will allow you to change the name of your savings account, and this technique helps you play a little psychological trick on yourself so that you are reminded why that money is in savings before you’re tempted to take any out for an indulgence today,” says Lowry.
Although it may sound silly, Lowry swears by the “save each $5 bill” rule or a piggy bank. “One goofy savings strategy I like to use is to save each $5 bills I get when paying for purchases in cash,” says Lowry. “I saved over $1,000 in 2018 alone with this technique.”
If you believe a recession means you’d lose your job quickly, then strive to have at least three months set aside.
Saving each $1 or $5 bill may seem like such a small amount, but it always adds up. “The point of saving, even if it’s just a few dollars, is to start building the habit,” says Lowry — and it is one of her favorite mantras. “Often, people feel it’s pointless to save even small amounts because it takes a long time to add up, but the point is to start building the habit.”
You might be justifying to yourself that you will start saving when you actually start making more money or have paid down your debt. “But let’s say that’s seven to ten years from now, you think it’ll be easier to just suddenly make the switch? How easy would it be to go from never exercising regularly to running a 5K?” Building money-saving habits is key.
If you have no idea where your money is going at the end of the month, and constantly feel like you do not have enough to deposit into your “fuck off fund,” Lowry advises you to take two weeks to write down every purchase you make (logging expenses in a bullet journal can help you keep track more clearly). Or download a 52-week savings planner, which will help you cut corners, keep track of your mindless spending and build up your emergency fund. “Then, you can look back at that information and see if there are patterns of mindless spending,” she says. “I’m not attacking your lattes, but I am saying there might be something you’re routinely buying that you don’t actually value.”