An emergency savings account can help you leave a bad boss, landlord or lover. Picture: iStock
An emergency savings account can help you leave a bad boss, landlord or lover. Picture: iStock

Experts say you need $10k in savings

YEARS ago, Sydney woman *Anna was able to escape the clutches of a bad relationship thanks to one secret weapon.

The retail worker's partner controlled almost every cent she earned and spent, and when the relationship finally broke down, the then 19-year-old discovered he had drained their shared account, leaving her with nothing - or so he thought.

But what Anna's ex didn't realise was that she also owned a property she had inherited a few years earlier, and she had been secretly saving the rental returns from that property in a separate account.

That cash helped her flee and get back on her feet - something she wouldn't have been able to do otherwise.

Now 32, Anna is urging other Aussies to have a so-called "f**k off fund" up their sleeves - just in case.

"I was putting $200 a week from the property into my own account, which wasn't shared," she said.

"So when that messy relationship ended I had enough money to rent myself a new place, get myself some new furniture and have a bit of a fresh start.

"He had taken all our shared money, my wages - it was all gone. I also had a lot of credit card debt because of him which took years to pay off.

"But I was really lucky I had the other money, otherwise I would have been stuck living with him for ages and he wouldn't have let me spend any money."

Anna said an emergency fund would help people leave toxic situations or even simply to handle unexpected expenses.

"My advice to other people is to make sure you have some savings put aside for emergencies, whether it's sudden bills or your car breaking down … you don't want to have to rely on your credit card to get yourself out of a bad situation," she said.

Anna's advice comes as new research from the Commonwealth Bank has revealed a third of Australians wouldn't be able to produce $500 in cash if an emergency arose.

Meanwhile, finance experts agree that a decent safety net should be enough to cover at least three months of everyday expenses including rent, utilities, food and transport.

With that in mind, comparison site mozo.com.au crunched the numbers to find how much money the average Australian would need to save for their own "f**k off fund" and how long it would take to build, based on the average living expenses and salaries in every state in Australia.

It found Canberrans would need nearly 11 months to save a decent fund, while Western Australians could build their safety net in half that time.

Mozo director Kirsty Lamont said a "f**k off fund" would give people the financial freedom to overcome unexpected emergencies or walk away from a toxic boss, lover or landlord.

Mozo has revealed how much money Aussies need to save — and how long it takes to build a
Mozo has revealed how much money Aussies need to save — and how long it takes to build a "f**k off fund". Picture: Supplied

"A f**k off fund should cover three months of rent, utilities, food and transport as well as small realistic costs that might crop up such as a few inexpensive restaurant meals, clothing, and entertainment, should you need to spend money on it," Ms Lamont said.

"One in three Australians admit they are currently spending beyond their means and wouldn't be able to produce $500 in the case of an emergency and more than half of the population wouldn't be able to weather the loss of income without turning to a credit card or loan.

"If your income is barely covering your outgoings, it can be hard to think about how to save."

She urged Aussies to review their spending, categorise purchases and look for unnecessary purchases or automatic deductions, which will help separate the essentials from needless spending.

How to build a f**k off fund:

• Research high interest savings accounts online and set up a dedicated account

• Organise a direct debit to transfer money from your everyday transaction account to your savings account as soon as you've been paid

• Set a goal - knowing how much money you're striving to save can make things easier

• Withdraw cash instead of using a card - this way it's much harder to spend over a set amount

• Track your spending using apps to identify unnecessary purchases and watch your savings grow

-Name has been changed to protect the individual's identity



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