Having an emergency savings account is something we are big on at Financy HQ, but not everyone sees the point or can afford the spare cashflow needed to create one – enter: the F-off fund.
Now this is the first time I have ever heard of an “F-off” fund, which has been defined by comparison website Mozo.com.au as a fund that has enough money in it to cover three months of rent, utilities, food and transport as well as small realistic costs that might crop up such as a few inexpensive restaurant meals, clothing, and entertainment, should you need to spend money on it.
The concept of an emergency fund like this is nothing new, but dropping the F-bomb is. The question is, does that get you inspired to create one, or does it completely turn you off?
Having an emergency stash to get out of a bad situation can offer a freedom that literally only money can buy.
If you’re feeling inspires, new research by Mozo.com.au has looked at average living expenses and salaries in every state in Australia to calculate how much money you need to save for your own F*** Off fund, as well as calculating approximately how long it will take you to save it.
Analysing average wages, as well as expenses, like rent, groceries, utilities and transport, it was found that Western Australians could accrue their safety net funding in the quickest time – just over six months, while Canberrans faced the longest wait with nearly 11 months of saving to accrue a decent emergency fund.
“It’s all too common to stay in a poor value rental or continue working for a tyrannical boss, all because you don’t have enough reserve funds to move out of the situation. The concept of a F*** Off fund encourages financial freedom, a psychological safety net and the power to move away from unsatisfactory situations,” says Kirsty Lamont, Mozo Director.
“A F*** Off fund should cover three months of rent, utilities, food and transport as well as small realistic costs that might crop up such as a few inexpensive restaurant meals, clothing, and entertainment, should you need to spend money on it.”
NSW residents have the highest F*** Off fund target amount, a total of $10,073 which would take nine and half months to save, assuming 20 per cent of the average after tax salary was set aside. Victorians have slightly less to save, $10,016, but face a longer saving time with nearly 10 months.
Western Australians have the lowest savings target and wait time, a total of $7,164.90 which could be saved in just over six months.
Now if you are at this point in the article, then the use of the F-bomb to get you reading about the importance of having an emergency savings accounts has obviously been of some use.
Some practical tips if you want to put this information into action are:
- Research high interest savings accounts online and set up a dedicated account for you F*** Off fund.
- Set up a direct debit to transfer money from your everyday transaction account to your savings account as soon as you’ve been paid.
- Set your goal – knowing how much money you’re striving to save can make progress all the sweeter as you edge towards that amount
- Withdraw cash rather than using a card – this way it’s much harder to spend over a set amount
- Track your spending – many banks now offer apps that track your spending, enabling you to identify unnecessary purchases and watch your savings grow
