How to Factor a F#@! Off Fund into Your Budget

No woman wants to be stuck in a bad situation because they don’t have the money to get out of it. Wait, scratch that… No rational person, regardless of gender, wants to be stuck in a bad situation because they don’t have the money to get out.

It’s for that reason that Patricia Perhach of The Billfold wrote a narrative earlier this year called, “A Story of a F#@! Off Fund” that details the life of a young woman just starting out who makes all the wrong financial choices and winds up stuck with a sexually harassing boss at work, a physically abusive boyfriend at home and no way out because she doesn’t have any money in the bank.

Patricia’s narrative was received with mixed reviews. Much as we did above, Megan Reynolds at the Frisky agrees that “Everyone Should have a F#@! Off Fund.” On the other hand, Lindsey Stanberry at Refinery29 trashes the story because it paints women as financial idiots. Essentially, Stanberry sees this as one more way personal finance websites for women patronize their own audience. In her mind, most sites treat women like morons that can help but spend too much money on clothes they don’t need.

Of course, Stanberry probably won’t be a fan of this article either. First, our website is on the cute end of site names with Miss Money Bee, a characteristic that Stanberry believes already means we’re insulting our audience. As she states, “It’s rare to find a website that caters to woman and their finances that’s not pink with some dumb name like Frugalista.”

Still, we really don’t think there’s anything wrong with making things pink, giving them cute names, and adding a little brevity to personal finance, which is an admittedly tough topic to follow because it’s often so boring and dry. If adding a little personality makes it easier to pay attention to personal finance, then there’s nothing wrong with doing it that way so people can stay engaged.

That being said, there is one thing missing from all of these stories… Namely, how in the world am I supposed to create an emergency fund, rainy day fund, financial safety net, f#@! off fund or any other name you want to give it when I’m working on a limited income and am saddled with all kinds of other obligations?

Factoring in the ability to say f#@! off as needed

A f#@! off fund is nothing more than an emergency savings fund. No matter what you call it, it refers to 3-6 months of budgeted expenses saved up that you can use to cover unexpected emergencies and even to get by without relying on credit if you lose your job or have to quit because your boss is a harassing jerk.

First, “budgeted expenses” are any bill or monthly expenditure that you need in order to live. It includes everything from rent or mortgage payments and utilities to groceries and gas for your car. It’s everything you need to live, work and get by. So the first step in establishing a fund is to calculate exactly what you’d need if you had no income coming in. Multiply that by three and then by six to get the high and the low range of your fund.

For me it currently works out like this:

  • $1,431 for mortgage
  • $184 for mobile family plan – we’re paying off new iPhones at the moment
  • $215 for electric – this is the highest end of our electric in summer, with a pool
  • $52 for home security
  • $600 for groceries
  • $175 to pay gas/tolls – I use a rewards credit card and pay of the balance every month
  • $295 for debt consolidation loan
  • $60 for water/sewage/waste management

So that equals $3,012 in expenses per month. Note that the amount doesn’t include the $9 I pay for Netflix, the $13 I pay to iTunes for Spotify and other paid apps, or the $30 I give to various charities every month. Those are discretionary expenses and things that get cut when you have to go down to a bare bones budget because you’re in the process of telling someone to f#@! off.

As a result, my emergency fund should be $9,036 to $18,072. It’s also important to note that your fund changes as your obligations change. In the example above, I’m paying off 2 iPhones and eliminating a debt consolidation loan. My mobile plan will be less once the phones are paid off. My obligations were also higher before I consolidated the debt and was paying off four high-interest credit cards individually. I always factor bills like electric in on the high end so that I have enough money to cover the biggest bill of the year.

Where to find the funds to feed your fund

The next step is to review your budget to see how much you have available to save each month. Start with a baseline – How much could you save each month starting today without cutting anything from your budget? You essentially take all of your free cash flow and divert it into savings. For me at the moment, it’s $200 per month. Again, that’s without cutting anything and even leaving a little bit of cash flow in my checking account each month to cover day to day incidentals.

If the answer is that you have nothing to save because you don’t have any money at all available once everything is paid, then you have a budget problem and you need financial help. That may mean doing things like looking into credit card debt consolidation or student loan consolidation to reduce the amount of monthly income you’re spending on debt. This usually adjusts your budget enough to allow for savings.

Whatever the amount, it should be allocated into your budget as a line item. In other words, I have $200 extra in cash every month, so I made Savings a $200 monthly expense in my budget. It essentially makes an obligation out of paying yourself. At minimum every month you should be setting that money aside until you have your f#@! off fund filled up.

Still, if you’re just starting out in starting your fund and you have nothing saved currently, you should make a plan that lets you contribute more money now so you can get a head start. This is where you go to your budget and start making cuts. For the first few months of generating your f#@! off fund, you cut anything you can live without so you can generate savings faster.

In my case, I managed to cut a bunch of extra stuff, didn’t go shopping or start any major house projects for six months. We even went to strict budgeting and couponing for groceries. During that time, I generated one month of a financial safety net. In other words, I could lose my job, kick my hubby out of the house and still cover everything for a month before I needed to pull out a credit card or worry about going into the red.

After that, we scaled back on the cuts. We started being more liberal with our food budget and even had a few really great date nights. I splurged on some plants for landscaping. I went back to opening emails from White House | Black Market and Macy’s instead of just deleting them so I wouldn’t be tempted to buy clothes.

We still save $200 every month, but we aren’t cutting everything discretionary for longer than that initial six months because that’s a good way to kill a saving strategy. Like a bad diet (sorry, Stanberry, but it’s true) if you cut too many things in your budget for too long you get worn out and wind up spending and splurging because you’re tired of going without.

Finally having the funds to say, “F#@! off”

It’s now a year and a half later since we started. We’ve generated an extra $2,000 for our fund because I had a few months where I had more than $200 to contribute. We’re still not up to covering even three months yet – we’re just over 1.5 months actually. But that’s okay, because it’s worked for us so far and we’re making progress every month to get up to the full amount.

My boyfriend even lost his job in November and he’s trying to transition into a freelance career – i.e. he’s in the process of saying f#@! off to working 9 to 5. We’ve had some gaps in his income while clients take their time to pay invoices, but the emergency fund has covered those gaps so we didn’t have to pull out a credit card for groceries or get a payday loan when one of our cats needed surgery.

And it’s that kind of peace of mind that your F#@! Off Fund is really supposed to provide. That little bit of extra breathing room that lets you know you’ll be alight even if things aren’t going right for you. The moral: Start an emergency savings fund and be aggressive about getting it funded to at least one month, at minimum. Then just be consistent to keep it going. After all, $5,000 may not be enough to cover us for three months, but it’s been enough to keep my stress levels at a happy minimum while my boyfriend tries to make it as a freelancer.