Enter Your Scenario
How to Use This Calculator
- Enter your net monthly income and typical monthly expenses.
- Choose a shock type and magnitude, then set shock duration.
- Add any replacement income you expect during the shock.
- Enter your emergency fund and a minimum cash buffer.
- Submit to see runway, deficits, and a month-by-month projection.
Formula Used
Shocked income (month 1) is calculated as: Income × (1 − Shock%) + ReplacementIncome for percent shocks, or max(0, Income − ShockAmount) + ReplacementIncome for fixed reductions.
Monthly expenses are: Essential + Discretionary + Debt + Other. If inflation is provided, expenses grow by: Expenses(m) = Expenses(1) × (1 + inflation%)^(m−1).
Fund balance is updated monthly: Fund(m) = Fund(m−1) + (Income(m) − Expenses(m)). Runway is estimated as: (EmergencyFund − Buffer) ÷ BurnRate using month 1 burn.
Example Data Table
| Scenario | Income | Shock | Expenses | Emergency Fund | Outcome |
|---|---|---|---|---|---|
| Baseline | $ 5,000 | — | $ 3,800 | $ 12,000 | Surplus $ 1,200/month |
| 25% cut for 6 months | $ 5,000 | 25% | $ 3,800 | $ 12,000 | Burn $ 50/month, runway ~ 220 months |
| 40% cut for 9 months | $ 5,000 | 40% | $ 3,800 | $ 6,000 | High risk, buffer likely breached |
Notes and Limitations
- This is an estimation tool, not financial advice.
- Runway uses month 1 burn rate; later months may differ.
- Consider separate buffers for taxes, medical events, or repairs.
Scenario design and inputs
Use net monthly income, then separate expenses into essential, discretionary, debt, and other. A common starting profile is income 5,000, essentials 2,400, discretionary 700, debt 450, and other 250, totaling 3,800 per month. Baseline net cash flow is 1,200, which builds reserves before any shock.
Income shock mechanics
Percent shocks apply to income only. A 25% cut reduces 5,000 to 3,750 before benefits; adding 300 replacement income yields 4,050. Amount shocks subtract a fixed value, for example 1,200, producing 3,800 plus any replacement income you enter. During recovery, income can ramp evenly, such as moving from 4,050 back to 5,000 over 3 months.
Expense structure and inflation
Total expenses can grow with a monthly inflation factor. With 0.50% inflation, month 6 expenses equal 3,800 × (1.005)^(5) ≈ 3,895. Month 12 becomes about 4,011. This helps reflect rent escalations, grocery increases, and rising utility bills when the shock persists longer than expected.
Savings runway and breakpoints
Coverage ratio equals shocked income ÷ expenses. If shocked income is 3,300 and expenses are 3,800, coverage is 0.87 and burn is 500 monthly. With a 12,000 fund and 1,000 buffer, usable cash is 11,000, giving runway 11,000 ÷ 500 = 22 months under steady burn. Required fund for a 6‑month deficit totals roughly 3,000, plus buffer for safety.
Action planning with outputs
The projection table reports income, expenses, net flow, and fund balance each month. Watch for “Buffer breached” and “Negative balance,” and note the minimum fund balance as the tightest point. If deficits appear, cut discretionary spending first, then renegotiate debt payments, and retest with a smaller shock or higher replacement income. Export CSV to compare scenarios consistently. For planning, try three shocks: mild 10%, base 25%, severe 40%. Record rating, runway, and required fund. Use the break-even cut figure to set a monthly savings target starting now.
FAQs
What does the stress rating represent?
It summarizes whether your shocked income and savings can cover projected expenses. Low means expenses are covered. Moderate means savings bridge the gap with tight buffers. High means the buffer or balance likely fails.
Should I enter gross or net income?
Use net monthly income after taxes and payroll deductions. If taxes vary, enter your conservative take-home amount. This keeps runway and required fund estimates closer to what you can actually spend.
How is recovery modeled after the shock?
Recovery increases income evenly from shocked income back to baseline across the recovery months. This creates a gradual slope rather than an instant jump, helping you test reemployment timelines or ramping contract work.
Why can runway show Infinity?
If shocked income is greater than or equal to month-one expenses, burn rate becomes zero. With no deficit, savings are not consumed in the model, so runway is effectively unlimited under the same assumptions.
Can I include multiple income sources?
Yes. Add stable side income into Monthly Income, and add temporary benefits or gig work into Replacement Income. Then test different shock magnitudes to see how diversification changes the minimum fund balance.
How should I interpret “required fund”?
Required fund totals only the monthly deficits during the shock period, then adds your chosen buffer for a safer target. If your current fund is below that number, you will likely cut spending or add income to pass.