The Beautiful Relationship Between FU Money and FI

There’s a common acronym within the financial independence, retire early (FIRE) community – and it’s used often. FU money.

For many, it’s a pipe dream they’re diligently working toward being able to say to a specific person, and for others, it’s a general vernacular they’ll carry in their arsenal for when the time comes.

FU money is having the power to dictate what you do and when you stop doing it, and it goes magically hand-in-hand with financial independence.

People’s definitions for it can vary, but on the whole, FU money is having enough in the bank to walk away from situations that don’t serve – whether they be toxic or, you know, just boring.

The reason it’s not quite the same as reaching financial independence is because FU money is really only a temporary stop-gap.

It’s breathing room while you remove yourself, take stock of your situation or life and reevaluate your next move. Eventually, you’ll need to go back to income-generating activities, but you’re not tied to a situation that isn’t serving you while you conduct that existential due diligence.

Usually, it’s having 6-months worth of expenses saved up for what I like to call crossroad moments.

A boss taking advantage of your hard work; colleagues that define irritating, useless and narcissistic; one-sided relationships that are all take and no give; travelling curveballs where you no longer feel safe or happy, or even wanting to live overseas for a while.

The list is endless – and it can also be applied to FU’s on a smaller scale.

Getting a taxi all the way home at 2am in the morning when that first date romp has gone sour.

Booking a nanny and staying at a hotel for a few nights when you need a break from a non-stop screaming toddler.

Buying your own secondhand runaround car so you’re not dependent on anyone else on getting you around.

Having the ability to turn around and say “no, actually, FU” is a wonderful superpower to have and one that everyone should have the luxury of. It can be life-changing.

And the swear words are optional.

FU money is something that is an omnipresent force; a way of thinking.

Your FU might be a simple “I’m quite alright, thank you. I’ll see myself out,” so as not to burn any bridges if it’s an industry you love, people you want to maintain a relationship with, or in front of peers you respect.

In my financial world, it’s not quite so literal, particularly as I tend not to say those words to anyone.

I work for myself and as a business owner, I don’t have anyone to report to. Clients, sure – but I take a lot of pride in working only with clients and organisations where the relationship is equal.

I treat them with professionalism and respect, and I expect that in return.

But in a way, my FU money allows me to do that.

To look for warning signs in certain lead client interactions, and easily walk away without fear I won’t be able to make my mortgage payments that month, or pay off my credit card bill when it comes in… or live on baked beans and home-brand toast.

It’s the ability to walk away from anything at any time, slinging swear words or not, without life-altering repercussions.

And look, I’m sure some people might say “but we can walk away from anything, at any time, we all have that power.” And sure, I think this idea of agency is important, but unfortunately, without the cash to accompany, in many cases it’s idealistic at best.

Because the reality is, when we have no financial buffer, our ability to make large-scale decisions is halted and impaired. We become paralysed with the knowledge of how difficult things will be; even with the knowledge of how bad things are now.

And that’s enough to keep us chained to the present. Of course we can change our circumstances while we’re in a bad situation, but just like alcohol clouds our judgement, fear and flurry clouds our ability to take the next step.

Getting to multiple job interviews when in full-time employment isn’t easy.

Finding a new place to live when you’re stuck in a relationship where one person controls all the purse strings isn’t easy.

Booking emergency flights home during the trip from hell when you’ve already maxed out your credit card and have $300 to your name isn’t easy.

Financial independence is about bulletproofing your future with money, so that you earn an income separate from your day-to-day job. FU money is about bulletproofing your pride and your safety, so that you never have to depend on anyone but yourself right now.

As in today. So what the FU are you waiting for?

FU money? Yes, please! But how?!:

• Saving 6-months of your salary seems hard. I GET IT. Especially if you’re currently paying down debt or are new to getting your money sorted.
• But one thing that’s important to remember is that it shouldn’t be 6 months of salary as you’re used to right now.
• Instead, look at the minimum cost of living you can get away with. The basics. Mortgage or rent. Bills. Food to fill your fridge. Bit of public transport money. Insurance premiums (TPD, life, trauma, pet and hospital cover – because emergency ambulances can cost up to $1,000, and air ambulances can run you $10,000).
• Many experts actually cite this as usually being between 40%-60% of your current income.
• That means if I earn $80,000 (the average Aussie income), I need between $16,000 and $24,000 to cover my basic expenses for six months.
• At $1,350 a month, I could have six months of income saved in a year. If I live in an area with a lower cost of living, or have less outgoings – that would be less time, or the same amount of time but saving less commensurate with income.