It's known as an 'FU fund' and it's key at those times when you need to move on. But how big should it be? Well, there are levels, writes Frances Cook.
Money may not buy happiness, but it certainly buys options – like the option to say "see ya later" when things are turning toxic. Bad job, bad boss, bad partner, bad living situation? A little stash of “FU” money can help you pull the pin, and get out of there.
For those feeling confused FU stands for f*** you. As best I can tell, actor Lucy Liu coined the phrase. At the very least, she popularised it.
It’s an old interview, but the clip from it still goes viral now and then, because it’s pure gold. With her signature cool, she explains how important this stash of cash is. “I worked a lot in order to just have money. It was called ‘f*** you’ money. If you have it, and something’s not working out, and they say you have to take this job or you’re fired, you can be like, ‘f*** you’.”
Iconic. And absolutely correct.
FU money comes down to freedom. It’s the financial cushion that lets you escape when things go bad.
It gives you the power to hit pause, regroup, and make different choices without the weight of financial stress bearing down on you.
The best part? Just having FU money often means you usually don’t need to use it. When people know you can walk away, they’re far more likely to treat you with respect from the get go.
But ok, maybe you do need to call their bluff once in a while. In that case, how much FU money is enough?
It all depends on how big an F you want to give.
Level 1: ‘Breathing space’ FU money
What it looks like: three months of core expenses
This is your starter FU fund. It covers the basics, and is just enough to get you out of there and into something a bit better.
It’s not three months of your pay, but enough to cover three months of just those core expenses that you absolutely can’t avoid paying. In an emergency, you can cut spending on everything else.
You calculate it by adding up just those necessary monthly bills: rent/mortgage, groceries, transport, utilities. Multiply by three, so that it covers three months.
This stash means you can walk away from a toxic boss or unbearable client without immediately scrambling for a new paycheck. You’ll have time to regroup, and find something better.
You could even stretch this stash past the three months if you take on a part-time job or freelance gig, just for some extra breathing space.
It’s a taster of FU freedom; enough to let you hit the brakes and jump to a better situation, rather than tolerating nonsense from those who don’t respect you.
Level 2: ‘Recover and refresh’ FU money
What it looks like: Roughly six months of salary
At this level, you’ve bought yourself something past pure survival. Now you’re hitting the zone where you can afford a proper hiatus.
Need a mental health break? Done.
Want to travel, or even take a course in order to pivot the career? Go for it. Figure out your next move from a seaside café, rather than a stuffy office.
Six months of your salary lets you step back, reassess, and find the next job or opportunity that actually fits your values.
You’re not rushing into the first option that comes your way. You’re making intentional choices.
Level 3: The ‘I might go back to work when I’m bored’ FU money
What it looks like: A six-figure investment portfolio, worth about two years of salary.
This is where freedom gets real, even if you’re not totally financially independent yet.
It’s not enough to live off forever, but it is enough to take a mini-retirement, and change gears.
With two years of living expenses saved or invested, you can take a significant career break without sacrificing your lifestyle.
Spend time with your kids, explore a passion project, try out a new career path, or start a business without the pressure to immediately turn a profit.
Sure, at some point you’ll need to head back into career mode, but it’ll be on your terms, and somewhat of your own timeline.
This level acts as a bridge that can take you from one life stage, to a new one, without the fear of financial collapse.
Level 4: The ‘you’re never telling me what to do’ FU money
What it looks like: $1 million (or more) invested.
This is the ultimate FU level – financial independence. You could just walk away and live off investments instead.
A rule of thumb in the personal finance world is that if put you your money into something like a sharemarket index fund, you can take out 4% each year, without eventually running out.
That means if you have $1million invested, the safe withdrawal rule of 4% allows you to spend $40,000 a year without your cash running out.
Don’t forget, work can be quite expensive in itself, costing you in rush-hour transport, work clothes, and food on the go, so that number could end up working quite well for retired life.
In this scenario, work becomes entirely optional. Maybe you’ll never go back. Or maybe you’re looking for something with meaning, and the extra cash is just a perk. You take on projects because they sound exciting, not because you need the paycheck.
The best part? Now you rarely need to say FU. Instead you can quietly sidestep anything, or anyone, who isn’t playing ball.
Choose your own adventure
The FU levels make one point clear: there’s more than one path, which creates freedom options for different budgets and different life goals.
In reality, it’s not actually about being able to finally tell your boss what you think of them. It’s about being able to take control of your path through life, and remove the pressure that can create bad decisions.
Whether you aim for the three month buffer, or full financial independence, you can find the version that’s best for your money and goals.
Lucy Liu said it best; FU money is essential, because eventually, life is going to test you.
Money gives you the opportunity to give the answer that works best for you, not someone else.
The only question now, is, what level are you aiming for?
That’s up to you.
Information in this column is general in nature and should not be taken as individual financial advice.
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