Every Sunday morning, I get up, brew a big pot of go-juice and update my budget.
It's one of the most relaxing things I do in the week, a numbers-nerd version of keeping a zen garden. I find making the numbers dance, making the financial side of my life make sense, to be profoundly relaxing. Even when I was in student debt up to my nuts, it was nice to realize where everything was coming from and where it was going to. It gives me a sense of control that often-times is lost in the hurly-burly of life. I might not be able to tell you whether I'll be sick in two months, or if I'll have a job tomorrow, but I can tell you exactly how much I'll need if I want to retire at 60.
I didn't always have much in the way of financial sense. I wish I could put a personal finance book in a time machine, send it back to, say, 1999 with a note pinned on it demanding I read it. I probably wouldn't, because personal finance really isn't about math or learning specific numbers--it's more about defining priorities and fixing your head. It would have been wasted effort, like teaching a cat how to play a piano. I just wasn't ready for it.
I never did anything particularly bad, no major credit card debt, didn't buy a time share in New Orleans pre-Katrina. No gambling, expensive cars, trips to Belize, making it rain at strip clubs, sports betting or anything like that. I just didn't track money that closely and I didn't keep an emergency fund.
It wasn't until I learned about money much later that I realized just how much of my youth I'd spent in a sort of haze of crises because my money was jerking me around. Sometimes I'd lie awake at nights paralyzed with fear that I'd lose a job. I'd worry about car repairs or if my television died, or about being stuck in an airport somewhere needing a cab and hotel fare. Basically, I worried a lot instead of getting on with my primary task of just enjoying being young and alive. I never had much freedom to live and it was primarily because of money. I thought I didn't have enough; instead I had a fundamentally flawed relationship with it. By not controlling it, it was controlling me.
These days, I have a good idea where everything is going. I have plans, long-term, short-term and otherwise. When I buy something, I know, in general, how it impacts my savings and various time-lines. I'm not obsessive about it, it's just that I've put a bit of thought into where I want to go in life, what's important to me, what isn't. I've realized that I don't particularly value having things, but I do value security and flexibility. I like never having to be in a position where my back is against the wall, not having to fear having all my shit get destroyed in a fire or a sudden job loss requiring me to sell body parts in a Bangkok chop shop to make ends meet.
Sounds like a lot to keep track of, but it really isn't. I've got some basic spreadsheets to take care of all the number juggling for me. I load them up, make some adjustments and, voila, my current financial position is displayed in lurid detail. If have a question I don't have an immediate answer to, I just make another spreadsheet or tweak a current one until it all makes sense. Once you have the basics it's embarrassingly easy.
Since I'm somewhat of a nerd, I like having stats to play with. It's simple enough: if there's a statistic which matters to someone, it's probably in there somewhere. Net worth? Retirement funds? Saucy little percentages? It's all there.
But my favorite section is a little block of numbers in the lower right-hand corner. They all average out to one big number, which I have in 32 point font, bolded and in bright red:
I call it my Fuck-It Number.
It is, simply enough, my best estimate of how many months I could go without having gainful employment before I need to find more gainful employment.
If it's going up, I'm in good financial shape. If it's going down, I've taken a hit for some reason.
The bigger it is, the happier I tend to be.
The name is a reference to the term "Fuck-You Money", which was coined, I believe, by James Clavell in "Tai Pan" but popularized by Neal Stephenson in "Cryptonomicon." It's the minimum amount of money you'd need where you'd be comfortable walking into your employer's office, saying "fuck you" to them and severing all lines of income. It's the sort of money where you'd have no worries about money ever after again, amen.
For most people that's a pretty big number. I'm nowhere near close to that, personally, and probably won't ever be unless some generous relative wins the lottery and gives me a chunk of it.
So, I use the Fuck-It Number. It's a metric of how well I'm doing. Sort of a measurement of how close my back is to the wall. If it's big, my back is very far from the proverbial wall. I prefer to keep it that way.
It sounds like a very negative thing to keep track of at all times. After all, you're focusing on bad things which might happen. Keeping track of it makes people think you're constantly looking over one shoulder because a bus might be heading your way at any moment. You might as well be tracking the number of seconds until you die, or keep a running tally of intestinal polyps you think you might have. It sounds morbid--or worse, miserly, like something Scrooge McDuck would have on a chart in his office. It sounds like a figure that, if known, would actually make you worse as a human being.
This could not be farther from the truth. It lends a wonderfully zen atmosphere to life. After all, barring horrible limb-dismantling, cancer-injecting trauma or similar acts of divine malice, there's not really a whole lot that can happen to you that a sizable emergency fund can't take care of.
It's very hard to piss off or worry someone with a high Fuck-It Number. Office politics? Job stress? Career boredom? Problem customers? The worst case scenario is I walk away from it all and take a long vacation somewhere ridiculous, simply to prove a point to the people trying to stress me out.
Oddly enough, I think it's made me a better worker over the years because I have a certain amount of objectivity these days that I lacked before. I don't fear job loss as much. I prioritize better since I'm not afraid to tell people when something is a waste of my time and abilities. I take more risks. I tend to negotiate like a god-damned Tyrannosaurus, because of the axiom that the one who cares less wins the deal. My lack of stress hopefully destresses the people around me, or at the very least doesn't contribute to the stress-cycle.
In my personal life, I'm much easier-going because small things just aren't a blip on my radar anymore and I have enough sense of what the big things are that I've planned for those, too, insomuch as big things can be planned for.
Formalizing my general lack of giving a fuck about things was probably one of the best financial decisions I've ever made, beyond the essential paying-off-debt-and-never-ever-ever-getting-back-in-debt thing. Having that metric is like a cold sudden slap of don't-give-a-fuck whenever you need it.