If your income stopped today, how many months can you survive?

If you lost your job today, how long would your savings last?

Three months? Six months? One year?

Most people have no idea. And that uncertainty quietly sits in the background of their lives. They worry constantly about job security and the future.

But when I ask them a simple question: "How long can your savings support you if your income stops?" - they can't answer it.

It's not that they don't care about their finances. They've just never calculated this one simple metric that reveals everything about their financial resilience.

That number is called your Liquidity Ratio.

What is the Liquidity Ratio?

Your liquidity ratio tells you how many months you can live on your current savings if your income stops today.

It's calculated simply: Liquidity Ratio = Liquid Assets ÷ Monthly Expenses

Liquid assets include:

• Cash in your bank accounts

• Savings accounts

• Money market funds

• Easily accessible funds

Monthly expenses include:

• Housing

• Food

• Transport

• Insurance

• School fees

• Lifestyle spending

If your savings can cover 12 months of expenses, your liquidity ratio is 12.

This one number changes everything. You stop guessing and start knowing.

Why this changes everything

When people don't know their liquidity ratio, they make financial decisions from fear or guesswork.

They might:

❌ Delay investing because they feel insecure

❌ Stay in jobs they dislike because they feel trapped

❌ Avoid opportunities because they worry about risk

But once you understand your liquidity ratio, something shifts.

You begin making decisions from data and confidence, not fear.

I see this transformation constantly with my coaching clients.

Example 1: Knowing how much they can invest

One client had S$250,000 sitting in savings but was afraid to invest any of it. She worried about "needing the money someday."

When we calculated her liquidity ratio, she realized her savings could support her household for over 24 months without income.

That insight gave her confidence. She kept a healthy emergency buffer while putting the rest to work in investments.

Example 2: Making a career pivot

Another client felt trapped in her corporate role but feared financial instability if she left.

Once we looked at her liquidity ratio, she realized she had several years of living expenses covered after working couple of decades in corporate.

Instead of feeling trapped, she saw a financial runway that could support exploration. She eventually made a thoughtful transition into work that aligned with her goals.

Example 3: Taking a sabbatical

I've worked with clients who dreamed about taking months off to recharge, but uncertainty around money made it feel impossible.

When they finally saw their liquidity ratio clearly, they realized they had built a strong financial cushion.

For some, that meant finally giving themselves permission to take that sabbatical.

Liquidity creates options

Your liquidity ratio doesn't just measure financial safety. It reveals your options.

It tells you:

👉 Can you weather a crisis?

👉 Can you make a career change?

👉 Can you take time off?

👉 Can you retire?

👉 Can you invest confidently?

When you understand your numbers, uncertainty loses its power over you.

Financial confidence starts with knowing your numbers

Many people believe financial confidence comes from earning more.

But in my experience as a finance coach, confidence often starts with something much simpler: Understanding where you stand today.

When you know your liquidity ratio, you stop guessing. You start making informed decisions.

And in times of uncertainty - whether economic, professional, or personal - that clarity makes all the difference.

💭 So share with me: Do you know your liquidity ratio? And what would change if you calculated it today?