Figures as of 28 September 2026. The worked examples use made-up round numbers. Swap in your own.
Tech companies announced 155,126 US job cuts in the first eight months of 2026, up 52% on the same period last year. That is 29% of all announced cuts, more than any other industry, according to Challenger, Gray & Christmas.
If you are one of those people, the first useful question is not whether AI caused it. It is this: how many months can I pay my bills without a new job? That number is your runway. Once you know it, every other decision gets easier: how picky to be about offers, whether to take contract work, what to cut.
The runway formula
Runway (months) = liquid savings ÷ (monthly essential spending − monthly income while unemployed)
- Liquid savings: money you can use this month without penalties. Cash, savings accounts, severance once it lands. Leave out retirement accounts, which usually carry taxes or penalties for early withdrawal, and anything you would have to sell at a loss.
- Essential spending: rent or mortgage, utilities, food, insurance, minimum debt payments, transport. Not what you spend now, but what you would spend if you cut everything optional.
- Income while unemployed: unemployment benefits, a partner's pay, freelance work. Count only what is reasonably certain.
Why plan for a long search
Two numbers suggest the gap between jobs is not short right now:
- In August 2026, about 1.93 million of the 7.15 million unemployed Americans, or 27%, had been looking for 27 weeks or more.
- The layoff rate in the information sector, which includes much of tech, rose from 1.3% to 2.4% between March 2025 and March 2026, the sharpest increase of any sector per Indeed Hiring Lab's reading of BLS data. More people are competing for the same openings.
A six-month runway is a sensible minimum. Twelve gives you room to say no.
Example 1: Junior developer, no severance
Single, renting, laid off with two weeks' notice and no package.
| Item | Amount |
|---|---|
| Liquid savings | $12,000 |
| Essential spending per month | $2,400 |
| Income while unemployed | $0 |
| Runway | 12,000 ÷ 2,400 = 5.0 months |
Cutting essentials to $2,000 (a cheaper phone plan, cooking at home, pausing subscriptions) stretches it to 6.0 months. A $400 monthly cut buys a whole extra month. That is why tracking spending comes before anything else: you cannot cut what you have not measured.
Example 2: Mid-level engineer with severance and some freelance work
| Item | Amount |
|---|---|
| Savings | $25,000 |
| Severance (after tax) | $15,000 |
| Liquid total | $40,000 |
| Essential spending per month | $4,500 |
| Freelance income per month | $1,000 |
| Net monthly burn | $3,500 |
| Runway | 40,000 ÷ 3,500 ≈ 11.4 months |
Without the freelance income, the same savings last 40,000 ÷ 4,500 ≈ 8.9 months. A small, steady side income adds two and a half months here, which is often worth more than it pays.
Example 3: Two incomes, a car loan, and one income gone
| Item | Amount |
|---|---|
| Liquid savings | $30,000 |
| Essential spending per month (includes $1,200 car loan payment) | $5,500 |
| Partner's take-home pay | $3,000 |
| Net monthly burn | $2,500 |
| Runway | 30,000 ÷ 2,500 = 12.0 months |
Twelve months looks comfortable. Now stress-test it: if the partner's income also stopped, runway falls to 30,000 ÷ 5,500 ≈ 5.5 months. That is the number to plan around, not the best case.
The car loan is 22% of essential spending here. Before assuming it is fixed, put the balance, rate and remaining term into a loan calculator to see how much of each payment is interest. Then ask the lender whether hardship options or a restructured term are available.
Don't forget prices keep rising
A runway calculated today assumes today's prices. At 3% annual inflation, $5,500 of monthly essentials becomes about $5,665 a year from now. That is small over one year, but it is a reason to recalculate every month rather than once. The inflation calculator shows the effect for any amount and rate.
If you are earlier in your career and looking for a first role rather than a next one, the entry-level hiring data explains why the search is taking longer.
The four-step setup
- Count liquid money only. List every account in a net worth tracker, then add up only the ones you could use this month without penalties. That subtotal is your liquid savings.
- Measure a real month of spending. Log everything by category in the budget tracker and split it into essential and optional.
- Check your fixed debts. Loan and card minimums are part of essentials. Know what each one costs and whether it can be changed.
- Recalculate monthly. Update savings, spending and any new income, and watch the runway number. If it drops below three months, that is the point to widen your search or take contract work.
All of these tools run in your browser, and the trackers save to your own device, so your balances and spending are not uploaded anywhere.
Also check what support you qualify for straight away. Unemployment benefits vary by state and country and usually require you to apply promptly. In the US, compare COBRA with marketplace plans for health cover before your employer coverage ends.
The short version
- Runway = liquid savings ÷ (essentials − income while unemployed).
- More than a quarter of unemployed Americans have been searching for 27 weeks or more, so aim for at least six months.
- Stress-test your plan with the worst realistic case, not the best.
- Every $400 you cut from a $2,400 month buys roughly one more month.
- Recalculate every month.