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Before we get started, let me tell you a bit about myself. I will be 32 years old in a few months and I haven’t worked for almost a year. There is no need to pity me as, from a financial point-of-view, I am fine. I do not live in my parents’ basement and I need no assistance financially. For all intents and purposes, consider me semi-retired.
So how did I manage to find myself in such a fortunate position? It is simple, I got myself some FU money. To understand what that is, I need to tell you about Microsoft. See, when Microsoft started out as a company, some of the company’s employees invested. As we all know, Microsoft ended up becoming one of the world’s biggest software companies and those employees who invested at the start were now sitting pretty.
Where it gets interesting is what those employees then did. They did not quit their jobs. Instead they started coming to work wearing badges that went something along the lines of “FU I’M MADE.” So basically what they did was send a message to their bosses that they do not want to quit, but that they also did not need the job. This basically gave them all the power to choose what kind of working life they wanted. As soon as it stopped being fun, they could just quit.
So that is where the term ‘FU money’ comes from. It all has to do with having the financial sense to save and prepare for a time when you may not be finding yourself content in your professional life. It is a similar place at which I found myself a little under a year ago. Luckily I had the foresight to know that day would eventually arrive so I started preparing for it.
For 5 long years I saved as much of my monthly income as I possibly could. I made a budget and I lived by it religiously. Most importantly, though, I made NO debt. We live in a world which constantly makes us believe that debt is a necessary evil. Let me tell you now, it is not. I have done perfectly fine without it for almost 10 years.
Yes, maybe it does mean that you have to use your iPhone 5 for 4 years. Yes, maybe it does mean that you will have to drive around in a 20-year-old car. Yes, maybe it does mean that you can only go out once a weekend and not twice. But it is all about keeping your eye on the prize. Every choice you make is going to have pros and cons. The only difference is that some choices are going to have more long-term pros and cons than others.
Thus it is for you to decide what is more important, struggling a bit now or struggling a lot later. I know it is difficult to choose a reward that you will only get years from now over an instant reward, but when you get that long-term reward it is just so much more satisfying. I promise you.
Just follow these simple rules and you will have your own bit of FU money in no(ish) time:
Budget: This can be the hardest part but it does not have to be. I, personally, use a program called “You Need A Budget 4,” YNAB4 for short, which is available on the other Steam. It does all the hard work for you. All you have to do is keep your receipts and, once a day, sit down and enter all your transactions. YNAB will do the rest. If you are well-versed in spreadsheets, you can make your own little budget in Excel or Google Docs.
Stick to your budget: As I did, religiously. There is no use in having a budget if you don’t use it. You do not understand how much stress you can remove from your life by just creating a budget and sticking to it. Got a trip you want to take? Budget for it. Decide when you want to take the trip and figure out how much it will cost. Divide that amount by the months left and you will have a number you need to save each month. When the time arrives, you get to go on this trip and truly enjoy it as you did not have to make any debt to pay for it. Furthermore, sticking to a budget will mean you will ALWAYS have a lot of spare cash for use in emergencies.
Have 2 bank accounts: One needs to be for every-day usage and the other one for saving, such as that trip you want to take. The savings account’s card always stays home! You do not carry it around with you because you will be tempted to use it.
Avoid debt like the plague: Like I mentioned before, we are raised to believe that debt is unavoidable and necessary. Again, it is not. Not making debt just means you will probably have to wait a month or two more before you can buy something. Just get rid of your credit cards. If you cannot buy something cash, then do not buy it. You will survive, trust me.
Save: And with this I mean as much as you possibly can. Under no circumstance am I saying you need to live as if you are homeless. After all, you are only young once so enjoy life, but in moderation. You do not need to buy a new phone every year. You do not have to go out every Friday and Saturday night. You do not always have to have the most expensive whatever. Sometimes it is okay to buy cheap and in bulk.
Change the way you think: This is really important. You have to change the way you think about money. Many people look at money and immediately consider all the ways they can spend it. What you should be doing instead is think of ways you can grow it. Educate yourself about investing and always be thinking of ways you can make your money work for you instead of you working for it.
So that is just about all this 31-year-old fart is gonna lecture you on. I will part with you on the following note:
You will be surprised how quickly 10 years can pass you by. Don’t be caught with your head up your ass.
Thank you.
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Good blog post, but I respectfully disagree.
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I used Dave Ramsey debt snowball to get out of debt. That was early last year. I then started a tight budget, did my investment research and started investing. It's amazing what you find when you look. Good article!
Thank you for the kind words and I commend you on the achievement. You, my friend, will surely live long and prosper ;)
Very good advice. I kept my expenses real low while i was working so that i can pursue some of my dreams now :)
That is a very smart choice :)
It is true that when you are young it really isn't a big priority to think of your future savings but it can be so beneficial if you do so. I wish I did and i am in my forties! Upvoted and following
I guess that is why they say hindsight is 20/20 ;) Thank you for the follow and upvote. I appreciate it!
Some nice points there. Also did the early retirement thing. I think the most important thing for me was arming myself with some financial knowledge - luckily enough, always had an interest but took it couple of steps further. Also need to include some knowledge on tax - then make it work for you.
Thought of going into tax but did not want to make it too technical. Just wanted to cover the basics. Thank you for the insight nevertheless :)
Good post.
Thank you. I appreciate it :)
A very nice post that earned a follow from me. :) I have been following all the steps you outlined for the past 20 years of my life. And I am happy and proud to have stayed debt-free for all that time and now have saved a fair amount that I can invest in crypto and other “baskets”. Financial literacy and responsibility should be taught in school!
Oleg
(ex-student, current teacher)
I could not have said it better, my friend. People need to learn about these basic things from high school at least. Thank you for the follow.
Solid advice. Thanks for sharing!
Thank you for reading :)