Sometimes we let emotions get in the way of making sound financial decisions which leads most people to make mistakes when making financial decisions. These emotions are even more pronounced in most employer-employee dealings. Most employment related financial decisions are made on impulse with little or no thoughts about the implications of such decisions. ‘F**k You’ money is one of the areas where this bias is most prevalent.

Just for better understanding– ‘F**k You’ Money is an amount of money an employee has that can allow him/her to tell the boss to take a hike when they feel the employer is becoming a pain in the back side. It is sort of an insurance policy that you have in your pocket which gives you the power to walk away if you feel like doing so. I have posed this question to a few people and most of them responded by plucking a very huge figure from the air and the response I get is one completely devoid of the thinking process that will go into such a decision. Most individuals just mention some millions of dollars or cedis as the amount they will need to walk away from their bosses. Others indicated that they will be willing to walk away even if they didn’t have money stashed anywhere. The emotional side of this decision is very strong and sometimes overshadows the very objective of making such a decision.

Most bosses or business owners normally push the employees so they can get more work from them than they are paying for and therefore most employees naturally hold a very bad view of their bosses. I read somewhere that employment is increasingly seen as a temporary economic arrangement for the mutual benefit of the company and the worker and it last only as long as both parties find it advantageous.

 I have come across employees who will walk away from a terrible employer even if they do not have the finances to support such a decision. I have also heard of people who will stay employed even under the most terrible of conditions. For these people the concept of ‘F**k You’ money is not very relevant to them. In any case anybody who is employed should have some sort of reserved funds that will come in handy in case of the unexpected happens.

The ‘F**k You’ money can also be stretched to moneys that an individual will need to have in order not to work again. Others may look at it as contingency fund to cater for the period between losing a job and finding a new one.

In any case the most important decision in dealing with ‘F**k You’ money is the amount one will need and where one has to keep that money. The most objective way of deciding how much money will be needed is to start looking at your living expenses. An individual’s living expenses is key in calculating the amount of money needed to be kept as an emergency fund. If the level of expenses cannot be ascertained, then it will be very difficult to arrive at an accurate value. If you do not have a budget or are not tracking your spending, then you need to start doing so now because without it, your chances of having financial and investment success will be very low and you wouldn’t have any business talking about ‘F**k You’ money. Let’s assume that you are either tracking your spending or have a fair idea of how much goes out of your pocket each month.

Those of us who spend more than we earn should not have any business talking about ‘F**k You’ money because it will not work. My advice to these people is to just overlook whatever treatment the employer is taking you through now until you are able to live within your means and can save. With a knowledge of your monthly expenses in hand, the next step is to decide on how far you want that ‘F**k You’ money to go. It will not make a lot of sense to leave work and run out of money in the next month.

The original idea of ‘F**k You’ money is so you do not have to work for anyone again. Another approach is to have enough to take care of you until you find another job and hopefully a more pleasant boss to go with. In the first scenario, you guess or if possible, predict how long you will live and then work backwards to calculate the total money you will spend from now to that period. If the total expenditure from now till your death looks very huge, don’t panic because we will adjust that amount by returns expected on such funds. If your plan is to have your ‘F**k You’ money last until your next job, then your problem is not complicated. You will need to estimate how long it will take you to get your next job and use this to calculate your total expenditure from the time you leave your job till you find a new one. I am making a conscious effort to keep any complicated calculation out of the discussion. The reason is we can look to the internet to learn how these calculations are done.

The next important question to ask is where to keep this ‘F**k You’ money?

My advice is to keep it with a financial institution in a low risk low return product. Treasury bills and related product comes to mind. When safety comes into any discussion then we have to look at low risk investments. There is always the temptation of being very aggressive and taking on more risk but I think the risk is not warranted in this case if the money is meant to be a ‘F**k You’ money.

The question about ‘F**k You’ money almost always generates an emotional response but what actually goes into answering it requires an individual to have an idea about personal expenses and then armed with this information, calculate how much money will be needed in this case.

A similar concept to ‘F**k You’ money is contingency fund. This is money that an individual set aside to take care of emergencies when they appear. How much contingency a person needs to hold depends on the safety of a person’s employment. If your job is secured with no threats of layoff or sudden dismissals, then a contingency fund which holds three months of person’s expenditure is advised. If the stability of a person’s job is questionable then six months to a year’s expenditure should be held in a contingency fund.

Most individuals do not take the concept of contingency serious but it is one of the pillars of proper financial and investment discipline. Any individual whether young or old, rich or poor must have some money set aside for emergencies. This is what will make the difference between being able to deal with a financial emergency and watching helplessly as an emergency drowns you financially.

In all, by revisiting the ‘F**k You’ money concept and rehash the point that most decisions taken in this area is loaded with emotions and devoid of very serious financial consideration, if you do not have that ‘F**k You’ money and your boss is getting on your nerves, my advice is bury your pride and keep working until you can raise that money.

Winslow Sackeyfio