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How Long Will Your Savings Last? A Calculation You Can Run in Five Minutes

By Ammad Humayun · Published 17 September 2026

The simple version is savings divided by monthly spending. The useful version accounts for interest, inflation and whatever income continues — and often produces a very different number.

The basic answer is savings divided by monthly spending. 24,000 in savings against 2,000 a month of expenses gives 12 months. That figure is correct only if the money earns nothing, prices never move, and no income arrives — which makes it a floor rather than an estimate.

The three versions of the calculation

Most people need the first two. The third matters when the balance is large enough that interest covers a meaningful share of the withdrawal, and it has one important property: if monthly interest earned exceeds the monthly withdrawal, the balance never runs out and the formula has no solution.

Simple:  Months = Savings / Monthly spending

With partial income:  Months = Savings / (Monthly spending - Monthly income)

With interest:  Months = -ln(1 - (Savings x r) / W) / ln(1 + r)
   where W = monthly withdrawal, r = monthly interest rate as a decimal

Worked example: income has stopped entirely

Savings of 18,000, essential monthly spending of 2,150, no income.

18,000 / 2,150 = 8.4 months.

Now add interest at 4% a year, which is 0.333% a month. In month one the balance earns 60, so the effective drawdown is 2,090 rather than 2,150. Running it forward month by month, the money lasts about 8.6 months.

Interest bought roughly six days. On this balance, at this withdrawal rate, interest is nearly irrelevant — which is worth knowing, because it means the decision about where to hold an emergency fund should be driven by access rather than rate.

Worked example: some income continues

Same savings of 18,000, same spending of 2,150, but part-time work brings in 1,300 a month.

The gap is 2,150 - 1,300 = 850. So 18,000 / 850 = 21.2 months.

Partial income more than doubled the runway. This is the single largest lever in the calculation, and it is the reason the question 'how long will my savings last' usually needs reframing as 'how long will my savings last at various levels of income'.

How the runway changes with spending and income

Based on 18,000 in savings, no interest. The pattern is worth reading carefully: the numbers do not change smoothly. As income approaches spending, the runway lengthens dramatically, because the denominator is heading towards zero. Cutting spending from 2,150 to 1,800 adds under two months with no income and adds fifteen months with 1,300 coming in.

This is why small changes on both sides matter more together than either does alone, and why a plan built only on cutting costs can miss the larger lever.

Adding inflation for longer horizons

Over six months inflation is negligible. Over three or four years it is not, because your spending rises while the balance does not.

The practical approach is to increase the monthly withdrawal by the annual inflation rate each year. At 2,000 a month and 3% inflation, year two withdraws 2,060 a month, year three 2,122.

A shortcut for longer horizons: use the real return instead of the nominal one. If savings earn 4% and inflation runs 3%, model the balance at roughly 1% and keep spending flat. It gives a similar answer with far less arithmetic.

Why savings often run out sooner than the formula says

1. Using total spending rather than the spending that would actually continue. Most people cut discretionary costs quickly when income stops.
2. Forgetting costs that only appear when employment ends, such as replacing employer-provided insurance.
3. Counting money that is not accessible without a penalty or a forced sale at a bad price.
4. Assuming a constant withdrawal when large annual bills — insurance, tax, registration — land in specific months.
5. Ignoring tax on withdrawals from certain account types, which reduces what actually reaches your spending.
6. Running the calculation once and not revisiting it as circumstances change.

Using the answer well

• Set a decision point rather than waiting for zero. Decide in advance what you will change at three months of runway remaining.
• Calculate two scenarios: a realistic one and a pessimistic one with lower income and higher costs.
• Recalculate monthly during any period of drawdown, using actual spending rather than the original estimate.
• Treat the runway as buying time to make a considered decision, not as a countdown.
• If the number is uncomfortably short, the calculation has told you which two levers to pull, and the income side usually moves it further.

Assumptions and limitations

Every version assumes spending is roughly predictable. A single large unplanned cost — a repair, a medical bill, a move — can remove a month or more from a runway that looked stable. This is the argument for treating the simple calculation as a floor and planning against the pessimistic scenario.

The interest version assumes a fixed rate and immediate access. Money in a fixed-term product may earn more and be unavailable when needed, and the whole point of this calculation is usually that the money must be available.

It also assumes withdrawals are even. Real drawdown is lumpy, and a month containing an annual insurance premium looks very different from an ordinary one. Averaging across a year is fine for planning and unhelpful for knowing whether next month works, so pair the runway figure with a look at what is actually due.

Test the runway against spending changes

A savings-runway calculation is highly sensitive to the monthly amount leaving the account. After calculating the base case, try a higher-spending scenario and a lower-spending scenario. This produces a range rather than a falsely precise date. For a long runway, consider inflation and investment returns separately rather than assuming either one stays fixed forever.

Frequently asked questions

Conclusion

Start with savings divided by essential monthly spending to get a floor, then improve it by subtracting any income that continues — that single adjustment usually changes the answer more than anything else. Add inflation only if the horizon runs past a couple of years, and treat interest as a minor factor on emergency-fund-sized balances. Then set a decision point well before the money runs out, because the value of knowing your runway is the time it gives you to act.

Figures in this article are illustrative. Results depend on your own rates, fees, taxes and circumstances, and are for educational and planning purposes rather than financial advice.

Related articles

• How to Calculate an Emergency Fund Target
• How to Calculate What Money Will Really Be Worth Later
• Simple vs Compound Interest: How to Calculate Both

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