What the Money Is Actually For

You know what the car cost to the dollar. You knew before you signed: the price, the rate, the term, the payment landing on the same day every month. Ask what one month of your life costs to run, all of it, and you would have to go and look it up. Ask how many months you could pay for without earning, and the answer arrives as a feeling rather than a figure.

That second figure decides more about your next ten years than your salary does, and it matters more now than it did. Trouble used to announce itself a season in advance, in a slow quarter or a hiring freeze. Now a whole function can be reorganised out between one quarter and the next.

The Two Figures That Matter

Men talk in gross salary because it is easy to say. He makes ninety thousand, the new man came in at a hundred and ten. On its own it tells you almost nothing about the position either of them is standing in.

The first figure is your floor. What a month costs when you are running your life sensibly: housing, food, transport, insurance, the minimum on anything you owe. Not your current spending, which carries drift. Not the emergency version either, where you live on rice and cancel your own birthday. The honest cost of an ordinary month.

The second is your pile. Money you could reach this week and nothing else, so not the retirement account, not the equity in the house, not the equipment, which would take six weeks to sell properly.

Divide the pile by the floor and you have your cover, counted in months. For most men the answer is a single digit and lower than they would say out loud. It is a small figure, and it sets the size of every decision available to you.