If you have heard the term ‘FU money’, it is likely you heard it during a discussion about a rich person with insane amounts of money, which gave them the superpower ability to say “FU” to just about anyone or any situation.
At the time, or maybe even now, you probably thought ‘welp. That doesn’t apply to me!’
You are wrong. FU money isn’t something only rich people have; you can (and should) have it too.
Your FU money doesn’t have to be a ridiculous sum of money, and I bet there’s plenty of evidence that you already have some FU money.
Evidence #1: An Emergency Fund
There are a few ways that your emergency fund is your ultimate FU money. In the face of an actual emergency, such as your car quitting on you minutes before an important engagement, your ability to hail a cab, call an uber, or a tow truck, is the ultimate FU to the situation. (Using a credit card doesn’t count unless you pay it off in full at the end of the month).
Another way an emergency fund is your ultimate FU money is in the face of a bad situation, at work or domestically. Having something stashed away gives you options, and the ability to say FU to a bad situation.
Evidence #2: Little to no debt
You might be wondering what debt has to do with ‘FU money.’ Surprisingly, a lot. The amount of debt you have, in comparison to your income and assets, is a major factor when determining the rates you are offered for loans, credit cards, and mortgages. A high debt to income ratio reduces your ‘credit worthiness.’ Having very little money in the debt column, even when you don’t have a lot of money in the income or assets column, gives you more flexibility to shop around for the best options and to say “FU” to higher interest rates or bad lending terms.
In this case, the absence of debt can become your “FU” currency.
Evidence #3: A savings or investment account
This is where the real “FU money” resides because really, your emergency fund should only be used as a last resort (for emergencies, get it?).
When you have money set aside in a savings or investment account, separate from your emergency fund, you are giving yourself a cushion to help deal with life’s unexpected (or sometimes expected) blows. It gives you options, and more control over situations that have an impact on you and your family. Even a small sum gives you a little bit of swagger, knowing that you have some control over a situation.
Consider these examples. Someone is offered an absurdly high rate on a new car and instead, opts to buy a used car with cash from her savings account. Another person finally finds the surprise gift for his daughter, after weeks of searching, but it won’t arrive on time unless he pays an extra $15 for expedited shipping. Your daughter has her heart set on a particular college, and works hard to get scholarships and loans, but falls just a little short of the full amount needed. These are perfect opportunities to say FU in my book!
The Bottom line
FU money comes in different sizes, shapes and forms, but it isn’t the size that matters, it is what the presence of FU money does for you. It provides you with options, flexibility and a little more control over a situation.
So, before you incur that debt, or spend every cent, think about saving or investing instead. You never know when you will need to say “FU.”