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Story: Renaming the Emergency Buffer as the F.O. Fund

Note: This is a post that contains bad language. If you’re someone who balks at the F-Word stop reading right here.

I have often advocated that you need things in three buckets mainly:

1) An emergency fund with six months of expenses

2) A fund for your children’s education – my calculations say this needs about Rs. 10,000 per month per child, and more if you didn’t start about eight months before birth. This is so you don’t feel like decaying toxic sewage because you can’t find a way to pay for your kids’ schooling.

3) A fund for your retirement, which changes according to how much money you have and how many years to retirement. (Rough calculation: Start with Rs. 5 lakh, and put 20K per month, increase by 10% every year, for 20 years and you’ll have Rs. 4.4 crores at a 12% annualized return)

And yes, IN THAT ORDER. Meaning if you don’t have the first, build it now. Then the second, and the third.

I don’t like to write about personal finance, largely because there are others who do a better job.

And often, you find a story written so well you have to say it. What I called an Emergency Fund is much better explained in:

The Story of a Fuck-Off Fund

You stare up at the dark and try to calculate how long it would take you to save up the cash to move out. Telling yourself that he’s sorry, convincing yourself it was an accident, discounting this one time because he didn’t hit you, exactly, seems much more feasible than finding the money, with what you owe every month. The next time you go out as a couple, his arm around your shoulders, you look at all the other girlfriends and imagine finger-sized bruises under their long sleeves.

Wait. This story sucks. If it were one of those Choose Your Own Adventures, here’s where you’d want to flip back, start over, rewrite what happens to you.

You graduated college and you’re a grown-ass woman now. Tina Fey is your spirit animal. Beyoncé, your preacher.

If any man ever hit you, if anyone ever sexually harassed you, you’d tell him to fuck right off. You want to be, no, you will be the kind of woman who can tell anyone to fuck off if a fuck off is deserved, so naturally you start a Fuck Off Fund.

I called it an Emergency Fund. Six months of expenses while you find yourself another way to live.

Sexual harassment is an emergency.

A bad relationship is an emergency.

A mid-life crisis – no matter how much they’ve made fun of it in articles – is an emergency.

Fixing your life, your weight (cue to myself also) and your health is an emergency.

No, don’t create TWO funds: you just create that emergency fund (and if you have kids, name it that). But in your mind, it’s that Fuck Off Fund.

If you find yourself saying “I need this job” – what you really need is a Fuck-Off Fund. It’s not for other people to fuck-off, really. It’s for you to fuck-off from that situation, and don’t use the excuse there’ s not enough money. Save for it first, and save for it now.

  • esotericBlue says:

    bravo! worthy read/article.
    here’s hoping/wishing all attain enough financial independence to lead an abuse free life.

  • AVM says:

    Interesting that you put child education fund at a higher priority than retirement fund, while most personal finance bloggers and/or financial planners recommend the priorities to be reversed (as an education loan can be availed for higher education, but no one except you will fund your retirement). Could you explain your thinking?

    • Basically, this is to calculate the amount you’ll pay for your kids education for schooling and college. In India, your kids higher education loans have to contain a sponsorship letter from the parent and assignment of collateral, and there really is no point to retirement if you can’t fund your kids education – which will usually come BEFORE you retire, and you’ll take money out of your retirement nest egg anyways.
      So the best thing to do is to plan for your kids education before your retirement, IMHO, for practical reasons. We love our kids and unless they want something that’s unaffordable (like a high end medical univ in the US for undergrad, which can be $80K per year and probably way beyond saving potential for most parents now) you should have their college fees tucked away someplace where they need it.

  • Rajan says:

    Good point. Thanks for the article.
    How about some of us who feel complacent once the 6-month all-expenses fund is ready & kept safe? complacent as in: not worried about yearly layoffs, less motivated at work, etc stupid attitudes (maha lazy comfort zone). I agree this is not a finance question. But some pointers in that angle would be great.