Payback
Break-Even
A one-off cost, a monthly benefit, and often a monthly cost that quietly eats into it. This tool answers the only question that matters for a payback: how long until the commitment has paid for itself — including the honest case where it never does.
How is this calculated?
The net gain per month is the monthly benefit minus the ongoing monthly cost. The break-even is the one-off cost divided by that net gain, which means it exists only when the net gain is positive.
The five-year position multiplies the net gain by sixty months and subtracts the one-off cost. Nothing is discounted, and no growth on the money you spent is included: for that side of the decision, use the opportunity cost tool.
About this tool. A payback figure is a fact about a scenario, not a recommendation. If the monthly benefit is a guess, the break-even is a guess: run it at half the benefit and see whether the answer still holds. Nothing you enter is stored.
Worked example
A realistic scenario, already filled in. Open it, then change one number at a time to see what actually moves the result.
A 12,000 investment saving 400 a month
With 50 a month of ongoing cost the net gain is 350, so the break-even lands around 35 months. Drop the monthly benefit to 250 and it stretches beyond five years, which is the sensitivity worth testing.
Open this example in the tool → The numbers live in the link, so you can bookmark it or send it to someone.
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Frequently asked questions
What counts as the monthly benefit?
Whatever the commitment gives you each month, valued the same way in both scenarios: money saved, extra revenue, or the cost of the alternative you no longer pay. Compute it on a normal month rather than a good one.
Why does my break-even never arrive?
Because the ongoing monthly cost is at least as large as the monthly benefit, so the net gain per month is zero or negative and the upfront amount is never recovered. That is a real answer, and it usually means re-checking one of the two figures.
Is a long break-even always a bad sign?
Not necessarily. A slow payback can still be a good decision if the benefit lasts well beyond it and you can stop without losing more. Test it at half the monthly benefit: if the conclusion survives that, the case is solid.
Does reaching break-even mean I am better off?
No. Break-even is the point where you are back where you started. What matters is everything after it, which is why the tool also shows the position after five years.