Runway: The One Startup Metric Worth Borrowing for Personal Finance

In a startup, "runway" is how many months the company can keep operating before its bank balance hits zero: cash on hand divided by monthly burn rate. It is a genuinely useful number for a household budget too, and it is just as easy to calculate.

A full worked example

Say your liquid reserves, checking plus savings, not counting retirement accounts you would pay a penalty to touch, add up to $18,000. Your average monthly spending over the last six months, everything included, is $3,600.

Runway = $18,000 divided by $3,600 = 5 months at your current, normal spending level.

Now calculate a second number: your "lean burn" - the same month with every discretionary category paused (dining out, subscriptions, travel), keeping only rent, utilities, groceries, and minimum debt payments. Say that comes to $2,400 a month.

Lean runway = $18,000 divided by $2,400 = 7.5 months.

That gap between 5 and 7.5 months is itself useful information - it tells you exactly how much flexibility cutting discretionary spending actually buys you if you needed it, in months, not just as a vague sense that cutting back would help.

Where the numbers actually come from

The two inputs here are the total across your liquid wallets (visible on the Wallets tab in Expentify) and your average monthly spending by category (visible in Reports). Recalculating this every few months, rather than once, is what makes it useful - reserves and spending both drift, and a runway number from eight months ago based on old numbers is not telling you anything about your position today.