“OH SHIT!!!” Money & “Fuck You!” Money

“OH SHIT!!!” Money & “Fuck You!” Money

Wise men and women save their money.

But what to save that money for? And how much to save? Do you take the your elders advice and save for retirement, do you save for investing, or for a vacation, or for school?

The answer is: ‘Yes’.

You should save for all of those thing. Everything you really need and want is something you should save for. But it’s not exactly raining down gold coins and unicorns out there – most of us have limited money coming in the door.

We need to prioritize what we’re saving for. But there’s one thing even wise men and women who’ve set their sights on the long horizon forget about: Peace of Mind.

“OH SHIT!!!” Money

Ever been in a car, minding your own business, then have an “OH SHIT” moment? Car in front of you gets into an accident, animal runs across the road, wheels start skidding out of control – any situation where you’re white knuckling your way through it.

Sometimes you get lucky and dodge the close call. Sometimes you don’t. But either way, the lesson that you should learn is that shit happens. You need to make plans for when things go wrong, not if they go wrong.

This is your emergency fund.

It means asking yourself what unexpected thing could go wrong that could sink you.

If your car breaks down, does that mean your life falls apart? Some of us just shrug and take the bus. Others need the car to get to work, pick up kids, take grandparents to the hospital and a million other things that you can’t do if you can’t get your wheels back on the road.

If you lose your job, will that sink you? Some of us pack up our tools and walk across the street directly into a new job. Some of us have people calling us before we lose a job. Some of us take six months before the next thing is finally sorted out.

“OH SHIT!!!” Money should cover your worst case scenario. But understanding that although things go wrong, they typically don’t go wrong all at once.

The chances of your house burning down AND your boss gambling away the company payroll AND your dog needing braces all in the same week are slim.

Lot of financial writers recommend saving up 3-6 months worth of expenses – enough money that all your regular bills are covered. The reality is that the amount is a personal number. Some need a  whole year’s worth of money in the bank to feel secure. Some need $1000 and a car they can sleep in.

Pick an amount, save it up, and then don’t touch it. Use it only when you absolutely need it, and revisit it every year because you might need more now.

“Fuck You!” Money

This is the other end of the spectrum. “OH SHIT!!!” Money is insurance against unplanned problems, it’s the life raft on the ship. “Fuck You!” Money is the cannons on the ship.

The idea here is to save up enough money so you don’t compromise ‘because you need the money.’ It puts iron in your backbone and give you guts to ask for what you want, say ‘no’ to what you don’t want, and only agree to the ‘best option’ rather than the ‘best you can get.’

Freelancers do this. Set aside some extra money so you don’t have to say yes to a shitty client ‘because you need the money’. It lets you pass on bad deals until good deals, or great deals come along.

Musicians and Comedians do this. You’re the artist, and you don’t compromise on the art – you do it your way, or you don’t do it.

If you work for a company with a tyrannical boss, “Fuck You” Money helps you step up rather than being stepped on.

Plan it right, and you’ll never have to put up with anybody’s bullshit again. Sure, you could accept what life hands you and grunt it out. But why not live life on your own terms.

Pick an amount, save it up, and then don’t touch it. Use it only when you absolutely need it, and revisit it every year because you might need more now.

Wrap Up

Both your “OH SHIT!!!” money & “Fuck You!” money are important. They’re both funds that you shouldn’t tap into lightly – these are like your insurance policy. You don’t want to rely on them, you want them to be waiting there for when you need them.

The dollar amounts depend completely on you. Decide what they will be, set them aside, and stand taller because of it.