F-You Money: Freeing yourself up to slow down time.
"F-You Money is there to empower you and to do cool and interesting things long before you're financially independent." - JL Collins
To start with, I highly encourage you to read this short article by J.L. Collins on the concept of F-You Money. If you're new to the concept, it's essentially having enough savings that you have more choices in life - so if you don't want to do something someone asks of you, you lose your job, or want to leave it — you can say a figurative 'FU' and do what you like. Though I don’t personally love the vibe behind saying ‘FU’ to a human being, I do admire the concept itself- having enough financial backup where no one can tell you what to do.
When many of us first come to terms with how much money we need to save to safely retire/be Financially Independent/no longer have to work, it can be really overwhelming! Focusing instead on the initial goal of having FU money can be much more palatable and exciting, as the timeline for getting there is so much shorter.
My own journey toward financial independence has resulted in a ton of personal growth, in me focusing on cultivating happiness and truly soaking up my one, precious life. I'm grateful that accumulating money to stop working as quickly as possible has never been my main priority (as it often can be on the FI / F.I.R.E journey).
My main quest these days is different. Instead of 'hustling until the end,' to reach a certain number that might signify being 100% financially independent - I would rather continue the work I love sustainably - while being a good mom, with a balanced nervous system, who prioritizes health and relationships.
I would also rather take mini-retirements along the way, pausing from normal life to take my kids backpacking or camping or rafting or go visit a couple of my best friends in Portugal. To remember how to be me without being defined so much by work. To create memories.
If you think about it, why do we focus so much on RETIREMENT as an end goal? Why can't we incorporate pauses and prioritize enjoying how we live along the way? Why is it so hard to give ourselves permission to exit the capitalist race every so often?
We are worth more than our productivity.
I recently listened to this podcast interview with JL Collins and The Madfientist, and resonated with his story.
In the last two decades FU money has enabled me to:
Do a 9th semester of college so I could study abroad in Mexico.
Hike the PCT afterward for two months (from Mexico to Mt Whitney)
Not have a full-time j-o-b for someone else since I was 23.
Spend two months in Thailand traveling and studying Thai Massage and Medicine
Spend 6 weeks backpacking (the hiking kind) with my partner the first year we met
Hike the John Muir Trail three times
Spend a month in Nepal and Vietnam the year before we had kids.
Take a few month-long stretches off work to remodel houses together.
Looking back, I would never trade those experiences and opportunities for new perspective on life to have a larger balance in my investment accounts right now.
How much FU Money do I need?
This will differ depending on how much your current life costs per month (on average). When I was in my 20's just $3500 made me feel safe taking off for Thailand for two months. I quit a part-time job I didn't like, told my clients I'd be gone for a while, and knew I'd have enough left over to pay my monthly expenses when I returned.
Today, as a home-owner and parent, I would want much more than that! For example, if my partner wanted to quit his job, I'd want 3-6 month's worth of his take-home pay set aside, to give him ample time to reflect and choose another position he would like more.
Slowing down time
The ultimate goal it seems to everything I’ve read about Financial Indepence is to slow things down. I love Mr Money Mustache's article about how he feels like he's been able to make his life feel so much longer since leaving his job, and not like it's racing by.
So often it is these pauses we take that allow us to feel like life isn't tumbling forward with unstoppable inertia… so we can literally and figuratively stop to smell the flowers.
HOW TO CALCULATE your current savings rate:
Knowing the percentage of your pay that you're holding on to for your future self can be really empowering.
STEP 1: Determine your household after-tax pay
This could be your take-home pay, though if you contribute to a 401K or retirement through your paycheck, you would want to add this back in.
STEP 2: Determine the monthly amount you are saving
This is the average monthly amount you put toward debt principle, retirement savings, college savings, anything invested in a non-retirement brokerage account, or just long-term savings. (What doesn’t count is saving toward car repairs, summer camps, etc).
STEP 3: Divide #2 by #1! Let's say you're after-tax pay is $5000/mo, and you are saving $1000 between retirement and college contributions. In this case, your savings rate would be 20% (1,000/5,000).
If you want a handy spreadsheet to help figure this out, you can make a copy of one here.
Thanks for reading, -Emily