Monthly Burn Rate Calculator

Calculate your burn rate

Enter your monthly spending and income below. Your burn rate is the net amount your savings shrink each month after income is subtracted.

What is monthly burn rate?

Your monthly burn rate is the net amount your savings decrease each month after accounting for any income. The formula is simple:

The term comes from startup finance, where it describes how fast a company is spending its cash reserves. In personal finance it works the same way: your burn rate tells you how quickly your savings are being depleted.

Positive, zero, and negative burn rate

• Positive burn rate (e.g. +$1,200): savings are shrinking. Every month $1,200 leaves your savings. Dividing your savings balance by this number gives you your runway in months.
• Zero burn rate: income exactly covers spending. Savings are flat. No runway concern at current levels, but also no growth.
• Negative burn rate (e.g. −$400): income exceeds spending. Savings are growing by $400 per month. This is the target state.

Even a small reduction in burn rate produces an outsized improvement in runway. Cutting $200 off a $1,000 burn rate (20%) extends a 10-month runway by 2.5 months, a 25% gain.

How to lower your burn rate

Two levers move burn rate: spending less, or earning more. The fastest wins are usually in subscriptions (cancel anything unused in the last 30 days) and food (cooking at home more evenings per week typically saves $150-$300 per month).

For a full category-by-category breakdown, see the guide on how to cut monthly expenses. To see your full savings runway based on your burn rate, use the main calculator. It also includes a what-if simulator showing exactly how each change affects your runway.

This calculator is for general estimation only. It is not financial advice. See the full disclaimer.

What a high, low, or negative burn rate actually means

Not all burn rates carry the same urgency. Here is what each range signals:

• Negative burn rate: income exceeds spending. Savings are growing every month. The focus shifts from protecting what you have to building it faster. A negative burn rate is the target state.
• Zero burn rate: income exactly covers spending. Savings are flat. There is no runway concern at current levels, but no growth either. Any disruption to income immediately creates a deficit.
• $1-$400/month: low positive burn rate. Savings last a long time. A $10,000 balance at a $200 burn rate gives 50 months of runway. Minor adjustments have outsized effects.
• $400-$1,500/month: moderate range. This is where most people with typical urban expenses fall. Runway shortens meaningfully as burn rate rises through this band. A $1,000 burn rate on $12,000 of savings is 12 months, solid but one significant disruption tests it.
• $1,500-$3,000/month: high. Even substantial savings balances provide limited runway. $20,000 at a $2,500 burn rate is 8 months, below the 12-month target for self-employed or high-variability earners. Reducing burn rate is the priority action at this level.
• Above $3,000/month: critical. Most savings balances represent less than 6 months of runway. This is the zone where spending structure, not savings balance, is the problem to solve first.

The compounding effect of a small burn rate reduction

A $200 monthly reduction in burn rate does more than save $200/month. It multiplies the effective value of every dollar you already have saved. Here is the arithmetic:

Say you have $12,000 saved and a $1,500 monthly burn rate. Your runway is 8 months. Cut the burn rate by $200, roughly the cost of daily coffees and two restaurant meals per week, and the same $12,000 lasts 9.2 months. A 13% reduction in burn rate produces a 1.2-month gain in runway, without adding a single pound to savings.

The relationship is non-linear: cuts to an already-low burn rate produce proportionally larger runway gains. Reducing from $800/month to $600/month (a 25% cut) extends runway by 33%. Reducing from $3,000/month to $2,800/month (a 7% cut) extends runway by only 7.5%. The lower your burn rate, the more each additional reduction is worth in months of financial security.

This is why burn rate is the most actionable number in personal finance. Your savings balance is fixed at any given moment. Your burn rate is something you can change this week. Use the what-if simulator in the main calculator to see the exact impact of a $100, $200, or $500 burn rate reduction on your specific runway.

Burn rate by life situation: what to expect

Burn rate is not just about spending habits. It is shaped heavily by fixed costs and life circumstances. Here are typical burn rate ranges by situation to give you a realistic benchmark.

• Student or early-career, shared accommodation: £400-£900/month. Rent is the dominant cost. Part-time income often covers most or all of spending, putting burn rate near zero or negative.
• Single professional, urban rental: £1,200-£2,200/month. Housing and transport typically account for 60-70% of spending. Burn rate tracks closely with take-home pay minus rent.
• Couple with joint finances, no children: £800-£1,500/month combined (after both incomes). Two incomes and shared fixed costs usually produce a low burn rate or a negative one.
• Single parent or one-income household with children: £1,500-£3,500/month. Childcare and housing are the primary drivers. This is where burn rate is most sensitive to job loss or income disruption.
• Self-employed with variable income: Burn rate fluctuates month to month. The relevant figure is the average over 3-6 months, calculated using the lowest representative month for conservative planning.

If your burn rate is significantly higher than what these ranges suggest for your situation, the gap is almost always in discretionary spending, specifically food, subscriptions, and unplanned purchases, rather than fixed costs. Fixed costs can be renegotiated; discretionary spending responds immediately to intentional change.

Common questions

What is a “good” burn rate?
Zero or negative is the target: income covers spending and savings are stable or growing. For most people in full-time employment, a burn rate under £500/month is manageable and gives meaningful runway from even modest savings. A burn rate above £1,500/month requires substantial savings to maintain more than a few months of runway, and typically signals that either housing costs or discretionary spending need attention.

Should I include irregular or one-off expenses in my burn rate?
Yes, but average them over 12 months. An annual car service, a holiday, or a quarterly insurance payment are real costs even if they do not appear every month. Divide any annual or quarterly expense by 12 or 3 respectively and add it to your monthly figure. Ignoring irregular costs is the most common reason people underestimate their true burn rate.

My burn rate varies a lot month to month. What number should I use?
Use a 3-month rolling average for a working figure, and a 6-month average for planning purposes. If you have months with genuinely exceptional costs (a house move, a medical bill), exclude them from the average but note they may recur. The goal is a number that represents your sustainable ongoing rate, not a snapshot of an unusual month in either direction.

I have no income at the moment. Does my full spending equal my burn rate?
Yes. With zero income, burn rate equals total monthly spending. This is the simplest version of the calculation. Dividing your savings balance by this number gives your runway directly. If you have recently lost income and are job-searching, run two scenarios: one with zero income (worst case) and one with a conservative estimate of when income might resume, to understand the range you are working within.

How is burn rate different from monthly spending?
Burn rate is spending minus income. Monthly spending is just spending. The distinction matters because income changes your actual draw on savings. If you spend $3,000/month but earn $2,400/month, your burn rate is $600, not $3,000. Focusing on spending alone overstates the urgency; focusing on burn rate gives you the number that directly drives how fast your savings deplete.