One of the oldest business sayings that stuck into my head was ‘Time is Money.’. It’s deceptive in its simplicity, it generates in the mind of the beholder of this simple 3 word adage that there is a direct equivalent between time and money, and that that equivalence runs both ways.

Ways in which you see this at work in every days life are people working (spending their time) in order to get some money. People spending their money to give them more time (for instance, by using some form of mechanised transportation to arrive at their destination sooner, bicycle, moped, car, jet etc) is another way in which it is illustrated.

And so we all seem to have blindly bought in to the fact that in order to be able to spend money we will have to expend our time and in order to be able to maximize the time we have available we have to spend more money. And thus the treadmill was born. And once you’re on that treadmill it gets very hard to get off it.

Before you know it you’re hip-deep in debt (credit cards, mortgages, car loans, student loans) and you need to work even harder (and so spend more of your precious time) in order to keep up with the now much higher speed of the treadmill.

But nobody is born into debt (at least, not in any functional society), so at some point in our lives we derail from the path where we are debt free onto a path where we are no longer debt free and take out a mortgage on our future health, well being and free time budget in order to be allowed to enter the treadmill and then we willingly assist in speeding it up.

When I look around me I see people making endless purchases of stuff they don’t actually need, brandnew cars, houses large enough to live in with two families (and then there’s only two people living there), parents that barely see their kids because of the pressure to earn money and a continuous stream of complaints about how it is absolutely impossible to make ends meet.

I don’t understand any of it. Maybe it is because I don’t allow any advertising at all into my life but the draw of all these gadgets and the need to show off wealth by buying expensive brand clothing and so on are things that I’m a stranger to. In a way I consider myself very lucky, I’ll buy what I (think) I want when I want it and because I can (easily) afford it. Not because there is some kind of peer pressure or a sense of having to keep up.

In my family there is an interesting set of divides between people with some money, people somewhere in the middle and people with no money at all. And in my circle of friends and their extended families there is a similar set of divides. Most of the complaining about the situation comes from the middle group, which really surprises me. The people that have no money are surprisingly good at managing the little bit that they have. Month after month they impress the hell out of me by making a couple of credits stretch well beyond what you’d normally think would be possible. Absolutely superb money management skills. The people that are somewhat wealthy have little reason to complain and none of them do.

But oh, that middle group. Two incomes, 160K euros / year jointly is not exceptional. That’s a very large amount of money. And yet, at the end of every year it’s all gone. They can’t get rid of their mortgages (someone explained to me in a very serious tone of voice that getting rid of your mortgage is stupid because it is a deductible, better to wait with paying it off when you sell the house in 25 years), they are supremely bad at figuring out what the cost of all this consumption driven borrowing is and how big a difference it would make if instead of buying stuff they’d be saving for a while (or at least, lowering their mortgage).

It’s almost as if common sense about finances is something that is extremely rare. People that are by their own admission barely able to make ends meet show off their new cars, smartphones, laptops, tablets and so on. And all bought on ‘cheap’ credit. But that credit really isn’t all that cheap (read the fine print on your credit card statement, if you have a 1.9% card make sure that it isn’t accidentally per month instead of annually).

Seriously. If you are making good money, you’re in debt and at the end of the year you are further in debt or the situation hasn’t improved then learn to control your spending. Saving is so much easier than earning, and it’s a habit that once built will pay you back for the rest of your life.

And once you’re out of debt, maybe have a bit of an investment strategy going you can safely spend the surplus on things that you can actually afford. But until you reach that milestone getting rid of debt should be priority #1 and the gadgets, the new car and other luxury spending should have to wait.

And then, when you are in that luxurious position you can maybe slow down that treadmill again and recover some of your precious time. That’s the only form of capital that you will NEVER have more of. So spend it wisely.