Emergency Fund & Job Loss Runway Calculator

Frequently asked questions

What counts as "essential monthly expenses"?

What you'd spend if all of your income was gone tomorrow and you eliminated everything that isn't essential: housing, utilities, groceries, insurance, minimum debt payments, transportation to look for a new job. Don't include non-essential items like entertainment, dining out, subscription services, or vacations. A true stress test needs to be as bare-bones as possible so you're looking at what you'd need to survive on, not your everyday budget. The budget & cash flow tracker's expense breakdown is a good place to pull real numbers from if you've been logging them there.

Why does this ask about severance and unemployment benefits? Most emergency fund calculators don't.

Because leaving them out understates how much runway you actually have if you're laid off specifically, as opposed to other emergencies a fund also needs to cover. Most emergency fund calculators only answer "how much should I save" as a static target; this one also answers a sharper question: given what you'd actually have coming in and going out, how many months does that really buy you right now.

How much unemployment benefit should I assume?

Check with your state's unemployment agency, since the amount will depend on which state you're in, how much you earned at your last job, and for how long. The duration of benefits varies by state but is commonly around 26 weeks or less. Entering $0 is a reasonable, conservative estimate if you're unsure.

What about COBRA or health insurance?

If your employer provides your health insurance, losing the job usually means losing access to that coverage too. You can continue coverage through COBRA, but you'll be required to pay the entire premium yourself with no employer subsidy, often several hundred dollars a month more than what you were paying. Leaving this cost out of the calculation is one of the most common ways people overestimate their real runway.

What is the "3 to 6 months" rule, and why does the target here go up to 9 or 12?

Three to six months of essential expenses is the most commonly cited starting guideline for an emergency fund, though it's a rule of thumb rather than a fixed law. Single-income households, variable or commission-based income, self-employment, or a specialized job market that typically takes longer to re-enter are all reasons many planners recommend leaning toward 9 or even 12 months instead of the low end of that range.

What if my unemployment benefit and any other income actually cover more than my expenses?

Then your effective monthly burn for that month is $0 or less, meaning your savings wouldn't actually shrink during that stretch, so your runway isn't a finite number of months at all. The tool reports this as fully covered rather than a large-but-finite figure. That's a genuinely different, better position than a large but finite runway number, worth knowing explicitly rather than just seeing a big months figure.

Does this replace a real budget or financial plan?

No, it's a stress test: a short and honest answer to one specific question based on the numbers you enter. The budget & cash flow tracker should be used to track your income and spending over time; the net worth tracker should be used to keep tabs on your overall savings and debt. This tool doesn't save anything between visits, on purpose, since it's meant to be rerun periodically as your numbers change, not tracked as a running history.