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You Should Know Your ‘Survival Number.’ Here’s Exactly How to Calculate It
Claire Chung

Can you name the exact dollar amount you need to survive month-to-month? Julie Alma-Taveras of @investinglatina calls this your “survival number” and has a tutorial that explains exactly how to calculate the cost of your bare minimum needs. Why would you need this? It gives you clarity about your cash flow and the amount you absolutely need—critical info should you experience a sudden income loss—but it also teaches you the value of learning to live with less. Here’s how to calculate yours.

First, what is a survival number? Per Alma-Taveras, it’s the monthly cost of your core needs. No, this doesn’t just mean fixed expenses. It also includes a couple of nice-to-haves—say, a takeout meal or Netflix. (In other words, what are the things that allow you to function as a human being with minor flourishes that boost your sanity here and there.)

So, what kinds of expenses count as core needs? Typically, this includes food, shelter, transportation, health care costs, clothing, utilities, phone, internet and childcare. Of course, there will be others you’ll need to factor in, based on your own individual lifestyle, but your survival number should be based on the basics. Total up the monthly cost of these items and that becomes the financial benchmark you absolutely need to have in your bank account every month.

Experiencing an income loss? Look at your survival number and zero in on spots you can trim. Maybe you can borrow a family member’s Netflix password for a few months. Or maybe you and your partner have to have a hard conversation about your rent to income ratio. (Depending on how big of a hit you expect to take financially, is relocation an option for you? Maybe.) Your survival number is the jumping off point that allows you to get creative about your cost of living and make adjustments from there as needed.

Income holding steady right now? That’s great. But your survival number is still an important number to know. For one thing, it’s what you should base your emergency savings on. (If you know you need $1,100 a month to cover your core needs, your goal should be to build up your savings to have at least three months worth of that amount set aside.)

Bottom line: Calculating your survival number helps you spend with intention during uncertain times. But it also helps you evaluate what you truly need to, well, survive.

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