First off, yes, FU stands for what you think it does. So now that we got that out of the way, what is a FU account? Basically its an account filled with money that your prefer to keep hidden. However when something/somebody threatens your freedom then you can use your FU account to get out of the situation. An account like this is good to have no matter if you are an entrepreneur, freelancer or an employee. So an example, say you are an employee and your boss comes up to you. He/She says that they are going to change your tasks and move you to another part of the company. These new tasks are really boring and the work time is alot worse etc.. Then you can simply say FU to your boss and quit because you have 12 worth of spendings saved up in your FU account. This would likely not be possible if you didn’t have that account since you have bills to pay and maybe even kids to feed. At that point the choice to quit is not as easy anymore.
Let’s take another example. Freelancers have to sort away the shitty clients and find the good trustworthy ones that pay you a fair amount. If you don’t have that FU account you might have to accept the really really bad project offers in order to keep up with your costs. Even if it’s going to mean alot of headaches and dealing with people you don’t want to have in your life.
A FU account is seriously good for your mental health. It’s really comforting that no matter what happends, you can survive for a long time on your savings.
So how big should your FU account be?
Well, obviously the more the better (up to a point) but you need some kind of starting point to reach for. At minimum you should have enough money in that account so that it would last you for 6 months. An optimal amount would probably last you for 12 months. More than that would be unnecessary. In that case it would be more wise to invest that money instead of keeping it in an low interest savings account.
Myself, I’m still working towards that 12 month goal and I’m up to 8 months worth of costs at this point. Feels great! Obviously this amount is going to vary alot depending on what your costs are. Some people spend $1000 per month, others spend $10 000 per month. If you don’t know how much money you are burning you are gonna have to cut out some time and get on google spreadsheets or something similar. Just put down all your fixed costs to start with such as rent, electricity and internet. Then you might have to go back a couple of months in your bank account and see how much you are spending on average on food, gas etc. Once you have your average spending amount per month it’s time to simply start saving!
Well… you might have to cut out some of your current spendings first. Maybe you don’t need that netflix account after all. Maybe you even have to move to a cheaper place. Do what ever it takes to build up that FU account. Because once you have it, it’s really worth it.
That is the end of this blog post and hopefully I was able to wake up some new thoughts! As always you can follow my daily struggles on twitter @Emil Malmsten Take Care!