Financial independence is key to being able to choose what you want to do in life, and setting aside a pot of money could be one way to achieve it. Caroline Bloor asks the experts how
Who wouldn’t want a stash of money that’s just yours and provides the freedom to make whatever changes you want in your life without worrying about the financial consequences? It’s no surprise that Paulette Perhach captured the imagination of millions of women in 2016 when she wrote about the need for such a financial safety net – or ‘F*** Off Fund’ – in the now defunct blog The Billfold. The post went viral. ‘Every woman should have a F*** Off Fund so that she can write her own story,’ wrote Perhach. ‘That kind of freedom is the fanciest luxury I’ve ever known.’
Whatever you need it for and whatever you want to call it – Freedom Fund, Flight Fund, F*** Off Fund – the concept has come to symbolise empowering change through financial independence. If you are ready to start the journey towards creating your freedom fund, however long that might take, here’s where to begin…
WHO NEEDS A FREEDOM FUND?
The need for financial independence is something everyone shares – we all need to be able to get ourselves out of trouble should we have to. No one can predict life’s ups and downs and it’s vital that, if we’re able to, we prepare for whatever financial challenges life can throw at us – as the last few years have shown.
‘Ultimately, everyone should have a fallback,’ says Emma-Lou Montgomery, associate director for personal investing at Fidelity International. ‘This doesn’t necessarily mean you want to ‘run away’ from your partner or that you’re being secretive about your money. It does, however, mean you have the savings to make choices.’
The concept of a freedom fund has added relevance for women, says Simonne Gnessen, founder of Wise Monkey Financial Coaching and co-author of Sheconomics. ‘It’s only since the mid-1970s that women have been given the right to open a bank account and to apply for a mor tgage or credit card in their own names. I think because women have this legacy of financial disempowerment within our very recent history, some of us may still hold some deeply embedded, self-limiting beliefs.’
WHAT’S A FREEDOM FUND FOR?
The idea of a freedom fund isn’t just to help you cope with bad situations (death, divorce, toxic relationships or redundancy) without needing to worry about the financial implications. It’s about being able to take advantage of opportunities, too. You might want to use it to fulfil an ambition to set up your own business, step back into further education or realise a travel dream.
Ali Poulton, head coach at Octopus Money, says: ‘What happens if you’re stuck in a job you feel you can’t leave or you want to try something new b
