How Long Will My Savings Last?
Divide your savings by your monthly expenses. That is your runway in months. $25,000 against $3,500 of monthly spending is 7.1 months, not "about a year." The formula is simple — the difficulty is that most people feed it the wrong expense number, and then are surprised when the money runs out early.
This page gives you two things: a lookup table for common savings amounts, and the two mistakes that cause people to overestimate how long their money will last.
The lookup table
Months of survival, assuming no income. Find your savings on the left, your monthly expenses across the top:
| Savings | $1,500/mo | $2,500/mo | $3,500/mo | $5,000/mo |
|---|---|---|---|---|
| $5,000 | 3.3 mo | 2.0 mo | 1.4 mo | 1.0 mo |
| $10,000 | 6.7 mo | 4.0 mo | 2.9 mo | 2.0 mo |
| $25,000 | 16.7 mo | 10.0 mo | 7.1 mo | 5.0 mo |
| $50,000 | 33.3 mo | 20.0 mo | 14.3 mo | 10.0 mo |
| $100,000 | 66.7 mo | 40.0 mo | 28.6 mo | 20.0 mo |
Read the table by column, not by row. The same $25,000 is sixteen months of freedom with a low cost of living and five months with a high one. Your expense level drives your runway far more than your savings balance does — a fact that makes spending cuts the fastest lever available to almost anyone.
Two people both have $25,000 saved. One lives on $1,500 a month and has sixteen months of options. The other spends $5,000 a month and has five. They have identical savings and completely different levels of freedom. Runway is a ratio, not a balance.
Mistake 1: Using your average spending instead of your minimum
Most people calculate their runway from their current average monthly spending. That number is too generous in one direction and too optimistic in another.
It is too generous because your pre-layoff average includes things that quietly disappear — commuting, work lunches, dry cleaning, the coffee you bought because you were at the office. Those genuinely vanish, which is why using them makes your survival estimate look worse than it is.
It is too optimistic because it excludes costs that only appear when you lose a paycheck:
- Health insurance. If your employer covered part of your premium, you now pay the full amount. COBRA commonly runs $500 to $2,000 per month. This is the single largest new line item for most people in the US.
- Job search costs. Interview travel, a portfolio refresh, courses, sometimes outplacement you fund yourself.
- Stress spending. Anxiety increases spending on convenience and comfort — food delivery, entertainment, small purchases that feel like relief. It is real, and it rarely appears in anyone's budget forecast.
The practical approach: start from your minimum essential spending, then add the costs above explicitly. That gives you a realistic floor rather than an aspirational one.
Mistake 2: Applying the 4% rule
If you have read anything about retirement planning, you have met the 4% rule: withdraw 4% of your portfolio annually and it should survive thirty years. People reasonably assume it applies to their savings runway. It does not, and using it will badly mislead you.
The 4% rule exists because a retirement portfolio faces thirty years of inflation and market volatility — the constraint is preserving capital across decades. A job-loss runway has a different shape entirely: a large, lumpy drawdown over a short period, ending when income resumes. There is no inflation adjustment to make over six months, and no need to preserve capital for year thirty.
The correct method is plain division:
Nothing more. If you have $30,000 and spend $3,000 a month, you have ten months. Do not divide by an annual withdrawal rate, and do not discount the result. The only refinement worth making is correcting the expense figure for the costs in Mistake 1.
What different runway lengths actually buy
The number matters less than what it enables. Here is the honest translation:
| Runway | What it enables |
|---|---|
| Under 2 months | Emergency mode. You accept the first offer that covers bills, and any unexpected expense becomes debt. |
| 2–4 months | Enough for a fast-moving search in a field that hires quickly. One surprise and you are exposed. |
| 4–8 months | Covers a typical mid-level search. You can turn down one bad fit. |
| 8–12 months | You can be selective, retrain, or wait out a slow hiring season. |
| 12+ months | You can choose based on fit rather than fear, and walk away from a bad offer without flinching. |
What runway buys is not comfort. It is the ability to say no. A short runway forces you to take the first acceptable offer, which frequently means a pay cut you then carry into your next several roles. Measured over a career, the cost of that forced decision is usually far larger than the interest the money would have earned.
How to extend your runway
Three levers, in order of how fast they work:
Cut the big fixed costs, not the small ones
Your rent or mortgage and your car payment usually dominate the monthly number. Renegotiating, refinancing, or restructuring one of them can move your runway by months. Skipping coffee adds days. Most advice focuses on the wrong end of the scale.
Add partial income rather than waiting for the perfect role
Contract work, consulting, or freelance projects do two things at once: they slow the drawdown and they reduce the psychological pressure that leads to bad decisions. Even modest income meaningfully extends how long you can hold out.
Recalculate monthly
Your runway changes as your spending changes. The number you calculate in week one is an estimate; the number in month two is data. People who track it make better decisions than people who set it once and hope.
Frequently asked questions
How long will $10,000 last?
About 6.7 months at $1,500 per month of expenses, 4 months at $2,500, 2.9 months at $3,500, and 2 months at $5,000. The calculation is savings divided by monthly expenses.
How long will $50,000 last?
Roughly 33 months at $1,500 per month, 20 months at $2,500, 14.3 months at $3,500, and 10 months at $5,000 — assuming no income and no new costs.
Does the 4% rule apply?
No. The 4% rule is built for a thirty-year retirement portfolio with inflation. A job-loss runway is a short-term drawdown, so plain division is correct.
Should I use average or minimum spending?
Start from minimum essential spending, then add costs that only appear after a job loss — health insurance above all. Average pre-layoff spending is misleading in both directions.
What is a good runway to have?
Match it to your expected search time rather than a fixed rule. If comparable roles take three to six months to land, six to nine months of runway lets you be selective. Six months is a sensible floor.