Size the Runway to the Monthly Cash Line, Not the Account Balance

A savings balance is the wrong number to ask about first. What decides how long a household can keep paying for care is the gap each month between the cash going out and the cash coming in, and that gap is the runway. Build it on a single page before you decide on hours, facilities, or a move. The steps below use only the numbers your own papers show.

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List the fixed monthly outflow

Start with what the household pays every month whether or not care is delivered: housing, utilities, insurance premiums, debt payments, food, transportation, and any premium deducted from a benefit check. Write each line with the figure from the most recent bill or statement. The CFPB publishes free budget worksheets that walk through a monthly list of this kind, and a plain worksheet works as well as a spreadsheet.

Price the care hours from the agreement

Take the weekly hours the plan calls for and multiply by the rate in the signed agreement, not the rate in a quote. Add the weekly cost of the extra hours that happen in practice: a backup aide for a sick day, a holiday shift, a visit that runs over. Multiply by the number of weeks in a month. Keep this as its own line so it can be changed without rewriting the rest of the page.

Write the inflow with the payment timing

List each source of income with the amount and the day it arrives: Social Security, a pension, wages, a retirement account draw, or a benefit from another program. The Social Security Administration pays on a set schedule, and the amount is shown in the benefit letter. Note whether the Medicare premium comes out of that check, because it lowers the net amount that arrives. Timing matters as much as the total when a bill is due before a check clears.

Divide the gap into months

Subtract the total inflow from the total outflow. If the result is a positive gap, divide the cash you can reach by that gap to get the number of months the plan lasts. Run the division twice: once at the planned hours, and once at a higher-hours figure that reflects what the household expects to need. Two numbers give a range, and a range is more honest than a single figure.

Count only the cash you can reach

A house, a vehicle, or a retirement account that carries a penalty for early withdrawal is not the same as cash in hand. Mark each asset with the time and cost it takes to turn it into spendable money. Equity in the home is real, but it does not pay this month's aide invoice until it is sold or borrowed against, and borrowing has its own terms to read.

Recheck the runway when eligibility could change

If the household expects that a public program may begin to cover some of the cost, do not add that help to the runway until the program confirms it in writing. The Missouri Department of Social Services handles Medicaid applications for the state, and eligibility is decided by that agency, not by the family's estimate. Until the decision arrives, keep the runway on the current income line.

Keep the page current

Keep the worksheet in one place and update the three numbers that move most: the hours, the rate, and the cash on hand. Check the runway each time the agreement changes, a benefit letter arrives, or the household's needs change. A runway that is updated is useful; one that was built once and forgotten gives a false sense of time. For how this desk checks its own figures, see How We Write.