How long would my savings last if I lost my job?

Divide the money you could actually reach — cash, deposits, shares and funds — by everything that leaves your account in a typical month, loan EMIs included. The result is the number of months you could carry on before anything else had to change. It needs no assumptions about growth at all.

Why this is the most honest number in personal finance

Almost every forward-looking figure in money rests on a rate of growth somebody has assumed. Change the assumed rate and the answer moves enormously, which is why two calculators can give the same person very different retirement dates. This one has no such input. It is a division of two things you already know, and it is either right or your two figures are wrong.

That makes it the first number worth knowing, and the one worth watching month to month. It moves when you save and it moves when your outgoings change, which are precisely the two things within your control.

Getting the two figures right

On the top, count only what you could genuinely reach in a hurry: bank balances, fixed deposits, shares and mutual fund units. Leave out the home you live in, and leave out retirement accounts you cannot access at your age — including them can double or triple the answer while changing nothing about your actual position.

On the bottom, use total outgoings rather than the tidy figure people usually quote. That means rent or EMIs, bills, food, school fees, insurance premiums and the irregular things averaged out. Understating this side is the commonest way people flatter themselves here, and it is the side that matters more, because it also tells you what a leaner month would buy you.

What moves it, and how fast

Because it is a ratio, both halves move it, and the bottom moves it harder than people expect. Cutting monthly outgoings by a tenth does not add a tenth to your runway; it adds rather more, because you are dividing by a smaller number every month thereafter. That is a useful thing to know before a stressful month rather than during one.

The top half moves more slowly, which is the honest news: a runway is built over months of saving, not in a week. What the figure is good for is direction. Watch it across a few months and it tells you plainly whether your position is improving, and a number that has not moved is itself an answer.