When travelling on the bus, sometimes I like to space out and do arithmetic in my head. The sums will usually be about my family's future expenses.  Some examples include the cost of sending my second kid to childcare, the remaining mortgage payments and the future premiums my wife and I have to pay on our family's insurance policies. Often, I catch myself making a very dangerous assumption that my future salary will rise in tandem to meet the higher expenditures. This assumption is dangerous because my future salary is not guaranteed.  Firstly, I may not get a wage raise.  Secondly, I can potentially lose the whole income due to permanent disability or retrenchment. Perhaps a better back-of-the-mind calculation is whether I can cover the expenses if they were to occur today, given my present state. If I am not able to cover the additional liabilities, ......