The other thing to consider is that if you're talking about extensions or FA, other teams are also bidding for this player, and they may have a completely different philosophy on spending.
You can't just assume you can sign a player to a pay as you go contract... very few players will take that because they know they can be cut and see none of that money. For them it's all about how much guaranteed money they can get. In many cases they will take less if a larger portion is guaranteed because they know they are getting that no matter what happens.