How Much Money Do You Really Need To Quit Your Job?

A few years ago, in the interest of learning to do a little more with my money, I asked my dad how he learned to budget. I wasn’t surprised when he quickly brought up emergency savings funds. 

My dad and I have similar money philosophies (risk-averse savers) and, as such, I felt pretty confident about my emergency savings account. I’d always heard that it was best to have six months of living expenses saved in a liquid cash fund and I’ve done my best to stick to that advice since I’ve been self-supporting. In practice, my emergency fund probably covers three to six months of my living expenses at any time. I’ve had to dip into it but when I do, I prioritise building it back up again. 

That night in our living room, my dad repeated the same old “six month” advice that I’d always heard. But then he said that his preference is actually to save a full year of living expenses in an emergency fund. That number seemed high to me — even over the top — but he made a pretty solid case for it. 

When he was younger, he told me, he’d had a job that he truly despised, the type that left him dreading weekday mornings. He quit as soon as he could but that wasn’t soon enough for him. He hated that he’d wasted so much time on something that made him so miserable. If he’d had 12 months of living expenses saved up, he explained, he would have felt safe walking away with nothing else lined up. Instead, he’d had to wait until he had a plan, rather than rely on what he calls — politely, because he’s a dad — an “F You Fund”. 

As mentioned, I inherited my money personality from my dad and I’m thrifty to a fault. Left to my own devices, I would never spend a dime, which, I’ve come to realise, isn’t entirely a good thing. These days, I try to remind myself that money is a tool — something that can provide me with security, yes, but also something that enables me to spend quality time with my loved ones and have enriching experiences. 

All to say, I didn’t need my dad to walk me through the pros of the F You Fund; it made intuitive sense to me. If you quit with nothing lined up, you’ll probably find a job within six months but you’ll almost definitely find one within 12. Having the extra cushion means you’re prepared for a worst-case scenario: a long period of unemployment, or some other unexpected expense you hadn’t accounted for when you were cataloguing your living costs. And if everything goes as planned and you find a job within a few months, you’ll be left with a robust emergency savings fund still intact. It felt right to my risk-shy gut: If I were in a toxic work situation and had six months of expenses saved, I’d probably want to find a new job before quitting; if I had 12 months saved, I’d feel that much more empowered to just leave.

Unfortunately, the reality is that most adults don’t have a Fuck You Fund (FYF). As of July 2021, over half of Americans have less than three months’ worth of emergency savings and a solid 25% have nothing at all, reports Bankrate. Meanwhile, we’re in the midst of the so-called Great Resignation, with 38% of those surveyed in the UK and Ireland planning to quit in the next six months to a year, according to a study by HR software company Personio.

Of course, there was also a record number of job openings in August, so it stands to reason that many people who are quitting have new jobs lined up. But others are leaving their work without their next steps planned, a sign, as Whizy Kim writes in her astute piece about the burnout generation, of “how fed up people are with the conditions of work”. 

I knew what felt right to me but I was curious what financial experts thought about what amount made for a fiscally responsible FYF. The answer was predictably noncommittal — it depends on the individual, they said — but it was also accurate. When I asked over 100 people what they would need in their FYF to feel safe quitting without a plan, the responses varied widely. While the most popular answer was six months, most people said they’d need anywhere from three to 18 months of living expenses saved to feel like they could really just say: Fuck you. 

This makes sense. An FYF, after all, is different from an emergency savings fund. The latter is objective: the amount of money you’d need to keep the lights on until you could find steady income again. The former is subjective: the amount of money that would empower you to say “fuck you” when you’re in a bad situation and follow through on it. This means having the ability to leave without necessarily offering two weeks’ notice or sending out a pleasant “it’s been nice!” email. What the FYF asks people to consider, then, is how much money they need to feel secure enough to start from zero, and given how emotional our relationships with money can be, it’s no wonder that the FYF figure can be a moving target. 

When Becky Blake, the founder of financial coaching company TwentyFree, quit her corporate job in January 2020, she’d saved an even $100,000 (£72k). “I have to admit that I chose $100,000 a bit arbitrarily because it felt like a powerful amount of money. What can't a girl do if she has $100,000 in the bank?” she says. Like my dad, Blake called this her F-you money, “because it gave me the freedom to say F-you to circumstances that were no longer serving me — including my day job.” 

While Blake had some liquid savings, a huge chunk of that money was invested into retirement accounts, which most experts will tell you aren’t the same as emergency savings, since you’ll be stuck paying a big penalty fee if you withdraw it early. But, she explains, “the amount in my investments was enough to be on track to retire at 65 without investing another penny.” 

Hillary Swetz, who runs the frugal-living website Homegrown Hillary, says she resigned from her job as a school teacher one month before the pandemic hit in the US, and only had a couple of thousand dollars saved in a bank account. And yet Swetz — who is married and has two children — says that was still enough. “For my family, it wasn't about how much we'd saved, but how much debt we'd paid off… That was more important to us, because it brought down the necessary income requirements for our family,” she says. 

Of course, Swetz’s spouse still had a full-time job, which underscores how much individual circumstances can affect a person’s final FYF number. “Are you single? Are you married with kids? Do you live at home? Is moving home to save money an option? Do you have a mortgage? These are all great things to consider before figuring out your ‘magic number’ in terms of savings,” says Brendan Heffernan, the cofounder of basketball website Dunk or Three, who is preparing to leave his full-time job in the education industry to pursue freelance writing. Another important factor is identifying what your ideal next move would be. If you want to slide into a comparable job to the one you’re leaving, you may feel comfortable with a smaller amount in your savings. But if you’re hoping to make a career change, or your line of work is highly specialised or very competitive, you may prefer having a little extra, says Sharon Van Donkelaar, the chief marketing officer at Expandi. 

A person’s past experiences of being out of work can also affect their Fuck You Fund mindset. “One time, I didn't save six months and I felt rushed to find a job. Ultimately, I ended up taking a job that didn't fit what I was looking for and I quit it over a year later,” says  L.J. Jones, a financial planner and the founder of Developing Financial LLC. “The second time, I saved up six months and I was able to take some time off to evaluate what I was looking for, take time to visit a friend, and let me find the ideal job I wanted without the pressure to take jobs that didn't fit my criteria.” 

Trysta Barwig had the experience of having quit a job with only three months’ worth of living expenses saved but then having to spend six months finding a new job. Barwig, founder of the travel blog This Travel Dream, ended up having to ask her family for financial support during that time, an experience that pushed her into a more conservative end of the FYF spectrum. Now she says she wouldn’t quit without a full year of expenses saved up. Then there’s Christine Wang, the founder of the skiing site The Ski Girl, who says that even though she’s found that getting a new job can take longer than you think, for her, three months’ worth of expenses is enough of an FYF (although she also recommends trying to have some other source of income lined up).

The truth is that there is no one figure that makes it “okay” or “not okay” to leave a job. And while we can speculate about our FYF number all we want, it’s also very possible that we’d feel differently when we’re really in that situation. What’s the balance between my tolerance for workplace toxicity, my respect for my own wellbeing and my fear of losing control of my finances? If an environment is harmful enough, it could (and maybe it should) outweigh my desire for a massive financial safety net.

To that end, my favourite response to my FYF questions came from Adam Garcia, a financial expert and the founder of The Stock Dork. “This will sound weird, coming from an expert in finance and investing: There is no amount of money that can make it safe enough to quit your job. Not because safety is difficult to achieve, but because it's an illusion,” Garcia says. “Not quitting a job because you don't have a Plan B can turn out to be even less safe than jumping ship, particularly if you consider that job's downsides to your mental or physical health. More and more people are realising this, and it is the direct cause of what we came to call the Great Resignation. Paradoxically, such a way of thinking and the courage to not only take risks but to admit that they are inherent to our condition can yield unexpected (and unexpectedly good) results because it spells liberty, and liberty is precisely what our creative juices thrive on.” 

This isn’t, in any way, to say that money is meaningless, because it’s not. Having little or no debt and lots of liquid assets is life-changing. But it is possible to become too attached to the idea that money gives us complete control over our futures and our safety, or that there’s ever any such thing as having enough of it. When it comes to leaving a job, then, how much money you have saved should be one factor in your decision, but not the only one. 

As for me, I haven’t been keeping close track of it but my Fuck You Fund hasn’t gotten much bigger since my dad first told me about his 12-month rule. It’s not a high priority for me. I don’t know if this was his intention but the lesson I took away from our conversation wasn’t that I needed to sock away even more cash but rather that it’s important to value yourself and your happiness over your job. Maybe the theory of the FYF is powerful enough on its own and will help remind me that if I’m ever in a situation that makes me wish I had just a few months’ more rent saved up, I’ll prioritise getting myself out of there — no matter how much cash I have on the side.