As I reached my teen years, a wise friend of mine shared with me a tip that has been passed along from generations of women. You should always keep a hidden $20 bill in your wallet so that you can always get yourself home out of any situation. $20 may not cover everything, but it will get you a good head start in case you need to leave a sticky situation. As I got older, I realized the wisdom of this advice and began to see a need to start this idea for myself on a larger scale. Because of this, the F-money freedom fund idea was planted.
This fund can take on many different names and can be personalized to your needs. Sometimes I call it anything from Freedom Money, F-you money, Safety money, Follow your dream money. The opportunities are endless. For simplicity’s sake, I will be referring to it as F-money since my uses of this are usually related to wanting freedom or telling someone to F-you!
What is an F-money fund?
The basics of it are the same as the $20 bill idea, just a little larger scale. This is money set aside to buy your way out of a tough situation, or to give you some easily accessible funds to take a risk in life. This is separate from your emergency fund and separate from any other targeted long-term savings accounts. This uses some similar ideas as my post about How to pay yourself first.
My reason for starting this F-money fund is so that I can get out of situations that I feel unsafe in. This may be a living situation, work situation, or travel situation. I have money to buy my safety or freedom. It also allows me to take a calculated risk if an opportunity comes up. An example could be quitting a toxic job without a new one lined up or taking an extended mental health break between two jobs.
Toxic boss
We all know that toxic new boss who comes into a workplace that was functioning just fine and then turns it into an awful place to work. Well, this was the situation a friend of mine was in. After working at a job for 12 years that she enjoyed (most of the time!) she was told her manager was leaving and a new one would start in a few weeks. Well, that new manager showed up with a giant chip on his shoulder and had many ideas of how to “fix” this department (which was operating just fine before he arrived!). His bullying style of leadership and frequent changes of direction of where the department was heading turned the workplace into a nightmare for my friend.
After a particularly difficult meeting where my friend was called a liar by this manager in front of the entire department, my friend decided that she had enough. She was loyal to her company and especially her co-workers, but the toxicity was causing mental health issues and affecting her non-work life and relationships. It was an incredibly difficult decision, but she had enough.
My friend put in her two weeks notice with the head of the company and was honest in explaining specifically that this manager was the reason she could no longer work for the company. Because she had $3,000 saved in an F-money account she didn’t need to stay in this toxic job while juggling interviewing for a new job. She was able to take a few weeks off of work before starting to apply and interview. Within 6 weeks, she landed a similar job at a new company where she still loves her team and manager. Bonus points that she now makes 10% more at this new job!
Safety in your living situation
A friend of mine moved into a new fabulous apartment with a new friend she just met. Everything seemed great as she signed the lease and moved her furniture in. However, about 6 weeks after she moved in, the new roommate started doing some really sketchy things and made this new living environment feel unsafe for my friend. It was taking a toll on her mental health and affecting her performance at work.
She had used up much of her savings on the down payment and buying a few new things for this place, but when she started sharing about the issues with this new roommate, we decided that she needed to get out before it cost her anything else. My friend was able to come up with $2,000 to pay to break her half of the lease and put a deposit down on a new smaller apartment (with no roommate yay!).
In this case, having a $2,000-$3,000 F-money fund would have made getting out of this situation simpler. She was able to come up with the money, but it took several long weeks of extra overtime and a maxed-out credit card to do so. All the while, she was worried for her physical safety whenever she was at home, and those couple of extra weeks she stayed in the apartment took a toll on her.
Dream job opportunity
Imagine you are working in an ok job, it pays the bills, but you don’t feel engaged or inspired by the work you do. A former boss approaches you about doing a similar job at a new non-profit organization he is starting. You loved working for this boss in the past, and this nonprofit’s mission is in line with a passion you have in your heart.
Sounds amazing right!
Well, until you remember that this is a new non-profit, so your salary will be about $500 a month less than your current job, plus you will have to buy your own health insurance for $300 a month. That means you will need to either cut your living expenses or come up with $800 a month of additional income to be able to maintain your current standard of living. Having an F-money fund of $3,000 would allow you the flexibility of having almost 4 months of extra living expenses. This buys you time to either increase your salary at this new job, find a side hustle, or make some lifestyle changes to cut your expenses to reflect your new salary.
So how do I get an F-money fund?
First, you want to start one before you need it. When you find yourself in these situations, staying so you can save up a few thousand dollars often puts you at greater risk for your physical or mental safety. Wherever you currently have your emergency fund savings account (preferably at a high yield savings account), open up a separate account for your F-money account. Often you can give your account a custom name, and I would highly recommend naming this account exactly what you want to name it as a motivation and reminder of why you are saving for this. Start this NOW!
How much do I need in my F-money fund?
Well, this is a personal answer for each person. A few questions to ponder about your personal needs:
- What other safety nets do I have available if I was stuck in a situation like this? If you have a strong safety net, you may need less. This might look like parents who would loan you money with no strings attached, or a spouse where their salary will cover your bills for a period of time.
- What other savings do I have available? If you have robust other non-critical savings accounts you could access in these situations (think of them as secondary F-money funds). This may mean you raid your travel fund to supplement a smaller F-money fund.
- What would it cost for you, if you were in one of the situations described above? What is the going cost for renting an apartment, including deposits in your area? $2,000 may be sufficient in Manhattan Kansas but would not go far in Manhattan New York.
- Are there any other situations you may find yourself in? This is a little bit of dreaming up what bad things could happen. Don’t get stuck in a downward spiral catastrophizing your life. If you need to, maybe do this exercise with a therapist or trusted friend so that you don’t get stuck in a scary place. With these situations, think about the cost of what it would take to get you out of the situation and into a safe place.
Usually, these funds are somewhere in the $3,000 to $5,000 range, but do what helps you to feel comfortable based on the answers you came up with to the questions above. If you are supporting someone like a child or parent, I would expect the amount to be a bit higher. I would recommend a high-yield savings account like Ally.
Get started!
Start by diverting $100-$300 a month to this account until you have the account balance at the amount you are comfortable with. Once you hit that amount, Hands off! Do not touch it and just leave it there as your “sleep well at night safety blanket”.
My hope is that you will never need to use this fund. However, it can be critical for you, especially for single women. Often women do not have as many reliable safety nets as couples do, which can lead to feeling like they are unable to leave a poor living situation, toxic work environment, or can’t take a risk of changing to their dream job. Life is for living. Don’t get stuck somewhere you don’t want to be!
How have you seen the need for an F-money fund in your life? I would love to hear your stories, share them in the comments below or on our Instagram page!
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