Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A reserve earning even a modest yield lasts longer than a simple balance-divided-by-monthly-shortfall estimate suggests, because the yield keeps adding a small amount back each month while the shortfall draws it down. The gap between the two grows more noticeable the longer the depletion period runs.
Before you rely on it
What to check
Use the projected depletion date to set a concrete deadline for reducing spending or finding income, rather than treating the reserve as an open-ended cushion.
The common error
Where people go wrong with emergency fund depletion calculator
Estimating how long a reserve lasts by dividing the balance by the monthly shortfall alone and ignoring any yield the reserve earns. Over a longer depletion period, that omission understates how long the money actually lasts by a real amount.
Sensitivity evidence
How starting reserve changes the estimated months until depletion
| Starting reserve | Estimated months until depletion | Net monthly burn |
|---|---|---|
| $24,000 | 7.0 months | $4,000 |
| $27,000 | 7.0 months | $4,000 |
| $30,000worked example | 8.0 months | $4,000 |
| $33,000 | 9.0 months | $4,000 |
| $36,000 | 10.0 months | $4,000 |
Every input, tested
Which input moves the estimated months until depletion most
| Input | Tested from | To | Estimated months until depletion at each end | Swing |
|---|---|---|---|---|
| Starting reserve | $27,000 | $33,000 | 7.0 months to 9.0 months | 2.0 months (25%) |
| Monthly withdrawals | $4,500 | $5,500 | 9.0 months to 7.0 months | 2.0 months (25%) |
| Monthly income or deposits | $900 | $1,100 | 8.0 months to 8.0 months | none |
| Annual account yield | 2.0% | 4.0% | 8.0 months to 8.0 months | none |
Two variables at once
Estimated months until depletion by starting reserve and monthly withdrawals
| Starting reserve \ Monthly withdrawals | $4,000 | $5,000 | $6,000 |
|---|---|---|---|
| $24,000 | 9.0 months | 7.0 months | 5.0 months |
| $27,000 | 10.0 months | 7.0 months | 6.0 months |
| $30,000 | 11.0 months | 8.0 months | 7.0 months |
| $33,000 | 12.0 months | 9.0 months | 7.0 months |
| $36,000 | 13.0 months | 10.0 months | 8.0 months |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Starting reserve | $30,000 |
| Monthly withdrawals | $5,000 |
| Monthly income or deposits | $1,000 |
| Annual account yield | 3.0% |
| Estimated months until depletion | 8.0 months |
| Net monthly burn | $4,000 |
Where the inputs come from
Starting reserve is the cash you could use, in accounts you can reach quickly. Monthly withdrawals are what you would spend each month, including essentials and debt payments, and monthly income or deposits covers unemployment benefits, a partner's income or part-time earnings. Annual account yield is the interest the reserve earns, which is small. Use a realistic spending figure, since emergencies rarely allow you to cut everything to the bone.
Using the estimated months until depletion in a real decision
The result also shows why liquid savings, not investments that can fall, belong in the reserve.
When the result stops applying
The model assumes steady withdrawals and deposits, while real spending changes and emergencies can bring new costs. Interest is small and taxable. Benefits such as unemployment insurance have limits and waiting periods. It does not include borrowing options, which are costly. Health insurance costs can jump after a job loss.
What to compare it with
Set the target on the emergency fund calculator, and see the runway for job loss on the unemployment and severance runway pages. The savings goal and time to save calculators help build the fund. The 50/30/20 budget page helps cut spending.
People also ask
Frequently asked questions
How long should an emergency fund last?
Most planners recommend three to six months of essential expenses, and longer if your income is uncertain or you are self-employed.
What if my reserve will run out sooner than expected?
Reduce essential spending, look for income sources, and consider extra savings or a home equity line as a backup, though borrowing adds cost.
Should I invest my emergency fund?
Generally not. It needs to be available and stable, so keep it in insured savings or a money-market account.