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.

Who this calculator is for

This is for anyone who has a rough sense of their spending but has never actually netted it against income to see the real number. It is especially useful after a change in circumstances, a pay cut, a new job, a move, a new dependant, when old assumptions about "how much I have left over" may no longer hold.

It is also the fastest way to sanity-check a savings runway result. If your runway looks shorter or longer than expected, your burn rate is almost always where the surprise is hiding.

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. For example, cooking at home more evenings per week and cutting $150/month from food delivery would reduce annual spending by $1,800.

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 the estimated effect of each change on 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

A burn rate is not inherently good or bad in isolation. Whether it is sustainable depends primarily on your current savings, monthly income, essential expenses, income stability, and other financial obligations, and specifically on how many months of runway that burn rate produces.

• 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.
• Positive burn rate: savings are shrinking, and the same dollar figure can mean very different things depending on your savings balance. For example, a $1,000 monthly burn rate with $12,000 in savings produces approximately 12 months of runway. The same $1,000 burn rate with $3,000 in savings produces approximately 3 months, a very different level of urgency from an identical burn rate.

This is why burn rate is best interpreted relative to your own savings and circumstances rather than against a universal dollar threshold.

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 one of the most actionable numbers 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 estimated 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. Housing, childcare, transportation, debt payments, and income variability can all materially affect burn rate, which is why two households with similar incomes may have very different monthly burn rates.

• Student or early-career, shared accommodation: Rent is often the largest cost, but shared accommodation and part-time income can keep burn rate near zero or negative.
• Single professional, urban rental: Housing and transport are often the largest expenses, so burn rate largely tracks take-home pay minus rent.
• Couple with joint finances, no children: Two incomes and shared fixed costs can produce a lower combined burn rate, or a negative one, than either income alone would support.
• Single parent or one-income household with children: Childcare and housing are often the primary cost drivers, and burn rate can be especially sensitive to job loss or income disruption.
• Self-employed with variable income: Burn rate fluctuates month to month. Averaging several representative months, weighting toward the lower end for conservative planning, can give a more stable figure to work from.

If your burn rate is higher than you would expect for your situation, checking discretionary spending, food, subscriptions, and unplanned purchases, alongside fixed costs is a reasonable place to start: discretionary spending can often be adjusted right away, while renegotiating fixed costs generally takes longer.

Common questions

What is a “good” burn rate?
Zero or negative is the target: income covers spending and savings are stable or growing. Beyond that, whether a positive burn rate is manageable depends on your savings balance, income stability, and other financial obligations. A higher burn rate generally requires a larger savings balance to maintain the same number of months of runway, so it is more useful to look at the runway it produces than at the burn rate figure alone.

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 a common reason people underestimate their true burn rate.

My burn rate varies a lot month to month. What number should I use?
If your income or expenses vary, averaging several representative months can provide a more useful planning figure than relying on a single month. Choose a period that captures your normal fluctuations, longer if your income is especially variable, shorter if it is fairly stable. If a particular month included a genuinely exceptional cost (a house move, a medical bill), you can exclude it from the average, but note that it 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.

Limitations

This calculator assumes constant monthly spending and income. It does not account for irregular annual or quarterly costs unless you have already averaged them into your monthly figure, and it does not adjust for one-off windfalls or unusually expensive months. Treat the result as a working estimate of your typical month, not a guarantee of every month going forward.

Burn rate also does not capture debt structure, investment returns, or tax changes. It is one number, deliberately simple, meant to be a starting point for decisions rather than a complete financial picture. For decisions involving significant money, speak to a qualified financial professional.

Related guides

• How to Budget With Irregular Income: for when your burn rate changes every month
• How to Cut $500 a Month Without Ruining Your Life: a specific plan to lower your burn rate
• How to Stop Lifestyle Creep: keep your burn rate from silently rising after a raise