Household CFO · Episode 06 · Written guide
Your household has a burn rate. Do you know it?
An emergency plan becomes far clearer when you know what one month of 'must pay' actually costs.
Illustrative examples. These guides explain decisions; they do not give personalized financial, tax, or legal advice.
Businesses use burn rate to describe cash leaving the business over a period. For a household, the useful version is the cash required each month to keep essential life operating. This is not a judgment about whether a purchase was 'good.' It is a contingency number.
Start with housing, utilities, groceries, transportation required for work or care, insurance, medicine, minimum debt payments, and dependent-care costs that would continue. Convert unavoidable annual payments into monthly amounts. If homeowners insurance is $2,400 a year, count $200 a month even if the check is written once. Keep irregular discretionary purchases in a separate normal-spending column.
Two burn rates are more useful than one
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Seven connected numbers, a liquidity map, retirement stress test, decision queue, family file, and annual review. One practical Excel workbook.
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