Gail V's case study: example of a fast treadmill

Today's case study at Gail V's website was interesting. It is what I call the 'treadmill' going a little too fast.

For those of you starting out a new stage in life (i.e. student to working class; trainee to practicing whatever) or have had a salary increase/promotion that yields more disposable income, it is very tempting to live it up.

You can justify it by using phrases like

"I deserve it"
"I worked hard, now it's party time"
"Just this one time..."
"I can afford a nicer...."

You have to remember that when you lock yourself into a higher lifestyle, it is very difficult to come down. Moreover, once you've locked yourself into new payments, it's hard to come back.

The case study that Gail has on her website is very interesting, and highlights a family that needs to trim back on things to regain financial control.

What we are highlighting is that their treadmill is going a bit too fast. We don't care how they got there, but it is definitely going too fast.

We're in a society where banks, furniture stores, and other companies have turned everything into a payment. While it looks like a small price to pay, it adds to the speed of your treadmill.

When a treadmill is going slowly, it is easy to keep it going, but once it speeds up, it's hard to stop.

That's why we advocate living based on your previous stage of life. If you get a job, budget as a student; if you progress from being a trainee to a full-fledged doctor or something, budget as a trainee; if you get a raise, budget as if you didn't.

That way, whatever is extra helps to slow the treadmill down and eventually allows you to get off the treadmill (i.e. when you are financially secure or retired!).