When this is the question you have
- The salary is fine, yet the last week of every month is tight, and you want to know where the money is held up.
- You want to know how much to actually keep in the current account, without leaving more than necessary earning nothing.
- You are thinking of putting most spending on a card and want to see what that interest-free window is really worth.
- A new job changes your payday and you want to estimate whether the changeover leaves a gap.
- You need to explain to family why the account cannot be emptied into a term deposit or an investment.
The three parts of the cycle
A household cash cycle is three spans of days added and subtracted. The first two are time when your money is already out and not yet back. The third is time the credit card carries for you.
| Part | How it is worked out | What it means |
|---|---|---|
| Days of stockpile | Stockpile value ÷ daily spending | Days of goods paid for and sitting at home unused. |
| Days of unpaid work | Pay cycle ÷ 2 + days to payday | Average days of work done but not yet paid for. |
| Days of card float | Card share × average interest-free days | Days the bank carries spending that has not left your account. |
| The cycle | Stockpile + unpaid work − card float | The days left over that you bridge with your own cash. |
| Minimum working cash | Cycle days × daily spending | What an ordinary month needs sitting in the account. |
Why the pay cycle gets halved
Because a month of work is spread evenly across the cycle. What you did at the start waits the full period to be paid; what you did at the end waits almost no time at all. Averaged out, that is half the pay cycle. Add the days between the period closing and the money landing, and you have the real average stretch of work done but not yet paid for.
It also explains why people paid weekly rarely describe the end of the month as tight. They are not earning more — the lag is simply much shorter, so far less cash needs bridging.
Card float is a tool and a trap
Between the purchase and the debit, the bank is lending you money for free, and that genuinely shortens your cycle. But it differs from the first two parts in one fundamental way: it is borrowed, not yours.
- It is only interest-free while every statement is paid in full and on time. Miss one and the whole balance turns into high-rate revolving credit.
- It shortens the cycle on paper without making you better off. Your actual cash position is unchanged; only the timing moved.
- The more you lean on it, the harder an income interruption lands: the salary stops, the card bill does not, and it arrives concentrated on a single date.
- That is why the tool flags a high card share combined with a long float. It is not saying you did something wrong — it is naming what kind of buffer that is.
Working cash and an emergency fund are not the same thing
This is the most important section on the page. Both figures are about how much cash to hold, and they answer completely different questions.
| Minimum working cash | Emergency fund | |
|---|---|---|
| Answers | How much an ordinary month needs | How long you last with no income |
| Assumes | Everything runs normally | Income drops to zero |
| Worked out as | Cycle days × daily spending | Three to six months of spending |
| Typical size | Days to a month of spending | Three to six months of spending |
A company spreads its receivables across many customers, so one of them failing is survivable. A household concentrates its income in one employer, and losing that job does not slow the money down — it stops it. That is why households need a fund businesses do not, and why working cash cannot double as an emergency fund: they differ by a factor of several.
To plan how long that fund takes to build, the compound interest calculator is the better tool.
Three ways to shorten the cycle
- Hold less stock. The most direct lever and the one people think of last. A stockpile is cash on a shelf, and the discount from buying in bulk often fails to cover the money tied up plus whatever expires unused.
- Shorten the pay lag. Most employees cannot change this, but a payday is negotiable when changing jobs, and freelancers control their own invoicing rhythm.
- Use card float without depending on it. Putting fixed costs on one card and aligning them with the statement date lengthens the average float — but only while every statement is cleared in full.
What this tool deliberately does not do
- No investment or debt advice. This runs arithmetic. How much cash to hold before putting the rest to work depends on your rates, job security and risk tolerance.
- No irregular income. The formula assumes a regular pay cycle. If you freelance or a large share of your income is commission, treat the result as a floor and hold a thicker buffer than it suggests.
- No memory. There are no accounts and no saving, so closing the tab means entering the figures again.
Do the figures you enter leave the browser
No. Income, spending and savings balances are all computed in your browser, no request carries them anywhere, and nothing is written to browser storage — closing the tab is enough. The downloaded report is assembled on your own machine. See the privacy policy for the details.
Frequently asked questions
- Why is the pay frequency halved when working out the lag?
- Because a month of work is spread evenly across the cycle. Work done at the start waits the full period, work done at the end waits almost nothing, and the average is half the cycle. Add the days between the period closing and the money landing, and that is your average stretch of work done but not yet paid for.
- Does a negative result mean my finances are healthy?
- It only means the short-term timing runs in your favour — the next payday arrives before the card bill is due. It says nothing about how much you have saved or what you owe. That float is also borrowed from the bank, and it vanishes, with interest, the first time a statement is not paid in full and on time.
- How is minimum working cash different from an emergency fund?
- Working cash answers "how much needs to sit in the account for an ordinary month where nothing goes wrong". An emergency fund answers "how long could we live with the income switched off". A household income is concentrated in one employer, and job loss does not slow it down, it stops it — so the fund is a separate three-to-six months of spending and the working cash figure cannot stand in for it.
- How precisely do I need to value the stockpile?
- Not precisely at all. Open the fridge and the cupboards and estimate a rough total; most households land somewhere between two weeks and a month of grocery spending. The point of the number is to show that a stockpile is cash sitting on a shelf, and a close estimate makes that point just as well.
- Can this tell me whether to invest or pay down debt?
- No — this does arithmetic only. Whether to overpay a loan, or how much cash to hold before putting the rest to work, depends on your interest rates, job security and risk tolerance, none of which is in the calculation. Check decisions that matter with a licensed professional.