Budgeting & Personal Finance
Runway
Definition
The amount of time a business can continue operating at its current burn rate before running out of cash. Calculated as Total Cash Reserves divided by Monthly Net Burn Rate. A freelancer with $15,000 in savings and a net burn rate of $3,000 per month has a 5-month runway. Runway is a critical metric for freelancers who experience income variability. Financial advisors typically recommend maintaining 3 to 6 months of runway as an emergency fund. Tracking runway in your budget spreadsheet helps you make informed decisions about taking on new projects, raising rates, or cutting expenses.
Related Templates
These SheetCraft templates use or relate to Runway:
- Freelancer Financial Hub, All-in-one financial management for freelancers, income tracking, expense categorization, quarterly tax estimates, and client profitability.
- Budget by Paycheck, Gig Workers Edition, Budget template designed for irregular income, allocate every payment as it arrives, in priority order.