Burn rate is what you spend per month. Sounds easy. Most people miss by 20, 30, 40% because they estimate instead of measure.
Here's how to get the real number.
**This is not financial advice.**This is how to track actual spending so you can hit a real quit target.
Why guessing fails
People think: Rent $2,000, food $400, car $500, total $3,500/month.
Then they check the statements and see $4,600. Where did $1,100 go?
Subscriptions they forgot about. Spontaneous purchases. Car repairs. Gifts. The recurring Amazon order. Insurance premiums you only think about once a year. Restaurant dinners that stacked up. Medical copays. Dentist visit. Travel. Home fixes.
You can't estimate what you're not paying attention to. Estimation breaks every time.
Use bank statements
Pull three months of transactions. Checking and credit cards. Three, not one. One month is a fluke. Three months is a pattern.
Spreadsheet it. Add every transaction. Food, utilities, insurance, subscriptions, gas, parking tickets, the stuff you didn't need but bought anyway. Everything.
Divide total by three. That's your real monthly burn.
It works because it's what actually happened, not what you think happened.
**Key stat:**BLS says average American monthly spend is $6,081 in 2024. But that's average across all incomes and all habits. Your number is specific to you. Bank statements are the only truth.
Break it down by categoryOnce you have the three-month total, slice it into categories. You'll see where the leak is and what to cut when you quit.Fixed (same every month)Rent or mortgage
Car payment or lease
Insurance (auto, renter, health)
Minimum debt payments (loans, credit cards)
Subscriptions (streaming, software, apps, gym)
Phone and internet
Utilities (roughly flat, seasonal drift)
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