Your ‘personal runway’ is how many months you can easily live if you stopped working. It’s a product of the cash and sellable assets you have on hand, your living expenses, and your ability to draw on your friends and family in times of need.
For instance, if you have $10,000 of savings and live on $1,000 per month, your personal runway is 10 months. If you could quickly and comfortably move back in with your parents or stay on a friend’s couch, cutting your living expenses by $500 a month, then your personal runway is 20 months. If you have non-work income, that boosts your runway further. If you’re lucky enough to have a family who would support you indefinitely in a productive lifestyle, then your runway is indefinitely long.
I think most people we advise should aim to have at least 6 – 12 months’ personal runway, and up to 12 – 24 could be good for flexibility.
I’ve noticed some people in the community who don’t have much runway and don’t appear to be saving, because they are donating a lot of income or doing very low wage work. Unless you have family or friends who’ll support you, you should cut back on donations and save until you’ve got enough runway.
Some more detail follows.