Recently a friend who is a personal trainer was telling me about the various types of clients he sees at his gym. One category he finds particularly challenging are those people who want to improve their fitness and overall health but can’t seem to find the time. They fill their days with plenty of activities and tasks usually associated with family and friends, leaving little time or energy for themselves.
These people have the desire to be fit but they just can’t seem to put themselves first to do the things they know are good for them. “Sometimes you have to put the oxygen mask on yourself first,” observed my friend. “Otherwise you run yourself down to the point where you can’t help anybody.”
The analogy should make sense to nearly every person who has flown on a commercial airline in the last 40 years. During the pre-flight safety review, passengers are informed that if the cabin air pressure falls, oxygen masks will drop from the panel above and we are to don them and breathe normally. A specific warning tells us that we are to put on our masks before helping anyone else, even if they are having difficulty. It’s not selfishness. If you pass out you won’t be in a position to put on your child’s oxygen mask, and now flight attendants have two passengers to assist.
I thought this was a brilliant metaphor for one of the biggest issues I see with clients who struggle committing to their financial future: inconsistent priorities. People want to be financially secure, pay off their debts and have a comfortable retirement, but their money behavior is the opposite. Often people are unaware that how they spend their money today will significantly affect the choices they have tomorrow. And often all it takes is a little shift in thinking to realign behaviours with priorities. It’s as simple as A and B.
In my practice, I find there are generally two types of people. Type A people spend their monthly earnings first and if there is anything left over they may set it aside. In my experience, these people rarely have anything remaining to save at the end of the month. Even with the best intentions, life is unpredictable enough that reasons to spend continue to arise until any surplus is exhausted.
Similar to the fitness-challenged folks my friend mentioned, only a small percentage of type A people are irresponsible. Most are dedicated family people whose day-to-day spending can easily be justified as necessities for their kids. Saving for emergencies, reducing taxes and retirement planning, take a back seat to spending on the immediate needs for today. However, the problem is compounded when people spend more than they earn, going into debt to provide the things they feel their family needs.
Then there are type B people who save first and spend the balance. They make savings a priority and consequently have money to do things that are important to them such as taking a vacation, funding an education plan, purchasing a home, or retiring early.
In this scenario, Person A is focused on getting the oxygen mask over the mouth and nose of their fellow traveler and ignoring the mask dangling before their own face. Like a person struggling with reduced oxygen, they may be able to keep up their activity level for a bit, but eventually lack of savings or even mounting debt will eliminate their ability to provide any financial support. If they “pass out“ financially because of a lack of funds before their kids are on their own, they will be just like the airline passenger who collapsed without getting the oxygen mask over anyone’s nose.
More frequently, however, but just as ruinous, are those families whose long term planning has been sacrificed for short term spending ( i.e. kids sports and/or expensive arts programs, premium education, extravagant family vacations, excessive electronics etc). With a family of my own, I understand the temptation to provide, but the end result is couples who face retirement without any savings, or worse: debt. By not taking care of your own financial health first, people are still working to pay off mortgages and credit cards at a time when they should be starting the transition to slowing down or stopping work altogether.
A steady flow of oxygen is necessary for sustaining life, and a commitment to personal fitness ensures oxygen can be utilized in the body for healthy living. Similarly, a steady flow of cash is necessary for financial well-being. So put on your own oxygen mask and work with a professional financial security advisor to ensure your long term priorities and aligned with your short term spending.