The Oxygen Mask principle: Why your financial future comes first

The other day my 8-year-old son asked me if he would need to take care of me financially when I was old. He had listened to something on the radio which prompted the question. He assured me that he would be a successful businessman at 28, so it was all in order!

It prompted a wonderful conversation around saving for retirement. I assured him that I was taking care of my own financial future, and that for now, playing and being a kid were most important.

In pre-flight safety, you're advised to put on your own oxygen mask before helping your child. It may seem counterintuitive, but it ensures that you are fine, and in a position to assist your child. When it comes to saving and investing for retirement, a similar shift in behaviour can be made.

Often, parents focus on the present and their children’s immediate needs and wants. We don’t always remember that if we don’t prioritise our future selves and save adequately – or put on our own oxygen masks first – we might well be a burden on our kids and limit their freedoms later in life. (Apart from the fact that we give ourselves the gift of compounding by saving earlier on in life. And this sets us up for a comfortable and fulfilling retirement.)
 

Retirement investments are tax-deductible, enhancing your savings potential. Contributing to a retirement annuity offers tax benefits that can be reinvested. For example, investing R100,000 as a 40% taxpayer could return R40,000 in tax savings.

Consider reinvesting this tax saving, creating a tax-free investment for your child or even rewarding yourself with a holiday to boost motivation. Investing in personal growth, such as a professional course or wellness retreat, can be equally rewarding.

Interestingly, one of the easiest ways to motivate yourself to save more for retirement is to imagine yourself as an older person and ‘connect’ with your future self. A study conducted by Hal Hershfield, PhD, digitally aged photos of people and asked them to write letters to their future selves.

The study found that the ‘aged face’ tool prompted people to save 2.2% more on average than those who hadn’t connected with their older selves in some way. 

Your children can also motivate you to save more. Researchers Dilip Soman and Amar Cheema conducted a study on how to persuade low-income consumers to save more. The most effective technique they discovered used a simple Polaroid picture. 

Photos of children helped low-income savers put away twice as much as those in a control group who did not see the images. Source: The Soul of Wealth by Daniel Crosby (Harriman House, 2024).

Looking out for your future self is akin to ‘putting on your own oxygen mask first’. By prioritising your retirement savings, you ensure that you are financially secure, enabling you to support your children without becoming a burden later on.

Sharing this concept with your children not only reassures them that they can enjoy their childhood without worry but also instills in them the importance of financial responsibility. Ultimately, when you invest in your own future, you create a stable foundation that allows both you and your children to thrive, now and in the years to come. Read more about how to talk to children about money.