Why you need a F--- off fund

What is a f--k off fund?

The idea of a f--k off fund is to actually use it, says Perhach. Not just wait until there’s a dire emergency, but any bad situation.

“The thing with the emergency fund, especially when you’re young, is it’s hard to imagine what emergency could happen to you,” she says. “You think, ‘I’m invincible, everything’s great,’ but then when the Billfold piece went so viral, we learned exactly how many people were holding on to those secrets and felt shame.”

Plus, names can change your mindset and lead to action. Perhach says that if she’s avoiding something in her calendar, she changes the name to something that would motivate her to actually do it, hence ‘f--k off’ versus ‘emergency’ fund.

Which makes sense. An uninspiring name is just going to make you skip or ignore it on your to-do list but a motivating name might just get you active and involved. ‘F--k off’ has a much more visceral effect than ‘emergency.’

As money expert and financial educator, Jessica Moorhouse says, “Perhach’s words deeply resonated with people because we’ve all been there. We’ve all been in a situation at least once in our lives where we’ve wished we could say ‘F--k off! I’m out of here!’ Unfortunately, most of us have never been able to go beyond the fantasy,” she says, saying that putting a label to a specific savings goal like this made people realize it could be a reality.

“It’s what inspired me to leave my last toxic workplace, that’s for sure!”

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What’s the difference between a f--k off and an emergency fund?

Perhach says if we think of the money we tuck away as only for emergencies, we'll never touch it, even if it would help get us out of a jam. But if we think of it as the funds that allow us to drop out of situations that are bad for us — like toxic workplaces or relationships — we might be more motivated to set more aside and to use it when it can provide us with relief and comfort.

Moorhouse agrees, saying that she sees them for different needs but there are no hard and fast rules about the definition.

“To me, an emergency fund is for more predictable life emergencies like job loss, car breakdown, pet health emergency, personal health emergency, or needing to find a new place to live because your landlord just sold your home. A f— off fund is more about escaping a situation to find freedom or safety.”

How to build up your own fund

The same practice of saving applies to creating a f—- off fund, says Moorhouse. She says first determine how much you need to walk away financially unscathed. Next, open a high-interest savings account, then work backwards to determine how much you can contribute each month or each paycheque.

“Lastly, calculate how many months it will take you to reach your goal. This will not only give you clarity for how much you need but also gives you a countdown clock that will make staying in your situation a bit more bearable until f—k off day.”

Why use a high-interest bank account?

The reasons for using a high-interest savings account (HISA) are simple:

• You need quick, easy access to the money, at any time of day or night
• You don't want the purchasing power of that money to erode while the cash is being stashed
• You don't want to risk losing the money, say, due to market declines

Using a HISA allows you to protect the money, while it earns interest that combats inflationary pressures and because it's a bank account, you can quickly and easily access your cash. Good options include:

• EQ Bank: This online-only bank offers one of the best high interest rates on savings and deposits in Canada. Customers can expect to earn on every dollar deposited, but still have the freedom to pay bills using the no-fee account. For instance, save $1,000 in an EQ Bank savings account as a f--k fund and earn $40 in interest. It's easy to open the EQ Bank account using their simple 100% online process. Open an EQ Bank high interest savings account today.

• Scotiabank's Momentum Plus Savings Account: As one of the Big 5 Banks, Scotiabank is a reputable traditional bank with plenty of in-person branches. Right now, new clients can earn 6.05% on every dollar deposited for the first three months. There are no fees and no monthly minimum required on the account. Open a Scotiabank Momentum Plus Savings Account today.

• Simplii Financial High Interest Savings Account: This online-only bank never charges monthly fees and offers some of the best bank promos. Until July 31, 2024, new clients can earn 5.9% on eligible deposits for five months, before it drops to the regular 0.40% earn rate. Open a Simplii high-interest savings account today.

Find other options to fall back on

We think that money is the only way to leave a bad situation or to weather a storm, but Perhach says it doesn’t always have to be financial. If you don’t have money try tapping into your community.

“Can you talk to a friend and say, ‘hey, if anything ever really goes down, could I stay at your house for a month and I'll clean your house while I'm there?’” she explains.

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Financial freedom is key

Perhach says having a f--k off fund is really about knowing how free you are and that no one has control over you and your income. Like Moorhouse, Perhach recommends sitting down and writing out what [the fund] would buy you.

“How much is a night in a hotel? How much do you need to find a new job? How much time can you buy yourself?” she says.

Other things to consider would be whether you have enough to cover the first and last deposit for a new apartment, or if your fund could buy you time to find a new job.

Finally, there is the joy of having the ability to set your own boundaries with friends, family and coworkers, says Perhach.

“To really take each person in your life and to say, ‘what would have to happen for me to be able to set my boundaries with this person? How much do my boundaries cost to say, ‘I will not be treated like that.’”

— with files from Romana King

Sources

1 The Billfold: A Story of a Fuck Off Fund, by Paulette Perhach (Jan 20, 2016)