Calculate How Long Your Savings Will Last

Yesterday you filed for unemployment benefits. Today you determine your financial runway.

Your runway is how many months you can survive on current savings before you run out of money. This number shapes every other decision you make during unemployment. It tells you how aggressive your job search needs to be, whether you can be selective about opportunities, and when you need to consider more drastic measures.

Knowing your runway reduces anxiety. Uncertainty about money is worse than knowing you have three months or six months or twelve months. The number gives you a timeline to work with instead of vague worry about running out.

Why Minimum Expenses Matter More Than Total Expenses

Your normal monthly spending includes discretionary purchases, savings contributions, and expenses you can defer or eliminate. These don't matter for runway calculations.

Your minimum monthly expenses are what you must pay to maintain basic survival: housing, utilities, food, and insurance. These are the costs that create crisis if unpaid. Rent gets you evicted. Utilities get shut off. Food is non-negotiable. Insurance protects you from catastrophic costs.

Everything else can be reduced or paused. Subscriptions can be canceled. Dining out can stop. Hobbies can wait. Debt payments can potentially be deferred. Your runway calculation uses only the expenses that can't be eliminated or postponed without serious consequences.

Identify Your Absolute Minimum Monthly Expenses

Write down these four categories and the monthly amount for each:

Housing - Rent or mortgage payment. Include property taxes if they're not part of your mortgage. This is typically your largest expense and the hardest to reduce quickly.

Utilities - Electricity, gas, water, internet, phone. Include only the services you actually need. Internet matters for job searching. Premium cable packages don't.

Food - Groceries for basic meals. Not your current food spending, but what you'd spend if you eliminated all restaurant meals, takeout, and expensive groceries. Use $200-300 per person as a baseline for basic nutrition.

Insurance - Health insurance premiums (COBRA or Marketplace), car insurance if you own a vehicle, and any other insurance you're legally required to maintain or can't afford to lose.

Add these four categories together. This is your absolute minimum monthly expense total. Everything else in your budget is either discretionary or can be addressed later if your financial situation deteriorates further.

Calculate Your Available Savings

Determine how much money you have access to right now:

Checking and savings accounts - Your immediately available cash. This is your primary runway funding.

Emergency fund - Money you've set aside specifically for situations like unemployment. This is exactly what emergency funds exist for. Use it.

Accessible investments - Taxable investment accounts you can liquidate if necessary. Don't include retirement accounts unless you're truly desperate, as early withdrawal creates tax penalties that make them inefficient emergency funding.

Severance pay - If you received severance, include the after-tax amount. Factor in when you'll receive it if it's paid over time rather than as a lump sum.

Add these together to get your total available savings. Don't include money you might get from selling belongings or borrowing from others. Count only what you have access to today without additional actions.

Calculate Your Runway in Months

Divide your total available savings by your absolute minimum monthly expenses. The result is your runway in months.

If you have $12,000 in savings and $3,000 in minimum monthly expenses, your runway is four months. If you have $8,000 in savings and $2,000 in minimum expenses, your runway is also four months. The relationship between savings and expenses matters more than either number individually.

Round down rather than up. If the calculation gives you 4.7 months, call it four months. This builds in a small buffer for unexpected expenses and keeps you realistic about your timeline.

What Your Runway Number Means

Your runway determines your job search strategy and financial decisions:

Six months or more - You have time to be selective about opportunities. You can focus on positions that match your career goals rather than taking the first offer. You can invest time in networking and building relationships that might lead to better opportunities. Financial pressure exists but doesn't force immediate compromise.

Three to six months - You have moderate runway. You should actively job search without panic but can't afford to be overly selective. Apply to positions where you meet most requirements rather than only perfect matches. Consider contract or temporary work if full-time opportunities are slow to materialize. Start making expense reductions now rather than waiting.

One to three months - You have limited runway. Your job search needs to be aggressive and broad. Apply to any position you're qualified for, even if it's not ideal. Consider gig work or part-time employment immediately to extend your runway. Make significant expense reductions this week. Contact creditors now about hardship programs before you miss payments.

Less than one month - You're in financial crisis. Take any legal income you can get immediately, even if it's not in your field. Contact all creditors and service providers about hardship programs today. Look into additional public assistance programs beyond unemployment. Consider whether you can temporarily move in with family or friends to eliminate housing costs.

These timeframes are guidelines, not rigid rules. Your specific situation might warrant different strategies.

Factor in Unemployment Benefits

Your unemployment benefits extend your runway significantly. Calculate how much your monthly benefit covers of your minimum expenses.

If your minimum monthly expenses are $3,000 and you receive $1,200 monthly in unemployment benefits, you need only $1,800 from savings each month. This changes your four-month runway to 6.7 months ($12,000 divided by $1,800).

Recalculate your runway including unemployment benefits. This gives you a more accurate picture of how long you can sustain your job search before savings run out.

Remember that unemployment benefits have limited duration, typically 12-26 weeks depending on your state. Your runway calculation should account for what happens when benefits end if your job search extends that long.

Plan for Runway Extension

Look at your calculation and determine whether your runway is adequate for your job search expectations. If you think finding work will take four months and you have three months of runway, you have a problem.

Options for extending runway include:

Reduce minimum expenses further - Negotiate with landlords, switch to cheaper phone plans, reduce food costs through careful shopping, find lower-cost insurance if available.

Add income quickly - Pursue gig work, freelance opportunities, or part-time employment that doesn't interfere with your primary job search.

Defer or negotiate other payments - Contact credit card companies, loan servicers, and other creditors about hardship programs before you miss payments. Many will reduce or defer payments temporarily.

Liquidate non-essential assets - Sell items you don't need for immediate cash if your runway is critically short.

Extending your runway by even one month provides meaningful additional time to find appropriate employment rather than taking the first available job out of desperation.

Update This Calculation Monthly

Your runway changes as you spend savings and as your circumstances evolve. Recalculate at the beginning of each month during unemployment.

If your runway is shrinking faster than expected, you need to adjust your job search strategy or find additional income immediately. If it's lasting longer than projected because you've reduced expenses effectively, you have more breathing room than you thought.

This monthly update keeps you realistic about your situation and prevents you from making decisions based on outdated assumptions.

Complete This Calculation Today

Write down your four minimum expense categories and their monthly totals right now. Add up your available savings. Calculate your runway in months. Factor in unemployment benefits and recalculate.

Write this number somewhere visible: "I have [X] months of runway." This clarity replaces vague anxiety with specific information you can plan around. You know your timeline, which means you can make informed decisions about your job search and financial choices.

Calculate your runway today. That number shapes everything else you do during unemployment.