The Prosp(a)rity Project's President & Chief Executive Officer, Bri Franklin, interviews Gaby Olya, a lead writer at ConsumerTracks Inc. During this interview, Gaby speaks to personal finance and how to build up a healthy savings.
Bri: If you could just start, well I’ll just preface overall and just say thank you again for taking the time to speak with us and be featured on our blog for the Prosp(a)rity Project. Thank you also for the opportunity to provide an interview for you and your team a couple weeks back. Really cool to see things come full circle.
Gaby: Yeah, I love it.
Bri: Yeah, and you know, just kind of… what is it? Cross pollinate.
Bri: You know, help each out get the coverage and the exposure around these really important discussion points and just efforts. I will let you give a more thorough and brief background intro on yourself and your work.
Gaby: Yeah, sure. So my background has been in journalism, not necessarily in personal finance journalism. It’s something I kind of fell into after my last job I was working as an entertainment journalist. And I started working in personal finance journalism, it will be, I just hit my four year mark.
Gaby: Thank you! I realized when I started writing about personal finance, how little that, how little I knew personally about personal finances. And so, yeah part of the reason I started my column that I interviewed you for was that I realized that there’s this financial literacy gap. And so even though I’m not a financial expert, I feel like you know I want to take my voice and shine a light on the gap and empower women specifically to take control of their financial lives cause I do think it has to just do with understanding and knowledge rather than an ability like anyone like anyone can take control of their finances. It’s just a matter of knowing how to start, knowing what to prioritize and there’s definitely lessons I’ve learned through writing about finance that I’ve been able to incorporate into my own life.
Bri: Very awesome. Yeah, I really think that’s a really big pointed thing to touch on it’s just the fact that it’s not, you know, that women aren’t capable of learning these things it’s just that you know we’re always given everything but what we actually need so it’s like you know to put it out there philosophically is one thing, but to actually give it someone practically and you know to translate it into their specific situation that makes all the difference. Could you speak a bit to like if there are any particular experiences that really open your eyes to the magnitude to the inequity and imbalance in womens’ financial literacy and just you kept mentioning that gap. Was there a certain moment that really like set you off and made you realize oh my gosh this is really a problem?
Gaby: I think it’s just more of just been like conversations i’ve had with friends. You know it’s like I have friends who are in their thirties and don’t have any retirement savings plan. Like nothing, Not a 401K not an IRA and you know that to me is alarming. And cause I’m talking about women who are like educated women with good jobs who make enough money that they could be setting something aside for retirement and they’re not. I think a lot of my friends are not actively invested in the stock market. Even if they do have a 401K I think there’s also a tendency to kind of normalize like credit card debt and attitude that like you know like buy the bag you deserve it.
Gaby: I feel like that’s like not the way to go. Like you should only you know charge what you can afford to pay off at the end of the month. But I think especially around like women in their twenties and thirties there’s kind of this like you know we deserve an attitude. So there’s just been some like troubling things that I’ve noticed just like around my own friends and like I said these are well educated women who are working full time like making enough money but they are not always making the smartest financial decisions. And I think it’s just because it’s not something we really prioritize like talking about. Financial literacy is not something currently taught in schools which I think is kind of crazy cause we learn the most, like you know, stuff that’s not really gonna help us in our lives, but there’s not anything that’s like, you know, how to open a brokerage account, like how to track your spending on your credit card, like how to build a budget. And I feel like those are all things we’re sent off into the real world like not knowing. And it’s so easy to make mistakes around those topics because we just don’t know. And then, you know, once you start getting into a whole, it’s harder to get out of it than if you just knew how to avoid it in the first place.
Bri: Yes, it is such a slippery slope. And my team and I actually had a meeting yesterday that touched on this very subject. We’re, you know, just through our program, we have a financial literacy component and so we’re trying to just make sure that it meets all of our expectations because we’re outsourcing for it. So there’s quite a bit that’s like you know somewhat beyond our control so the extent that we’re able, we want to make sure that the curriculum and the content is sharply aligned with our views and our philosophy. I admittedly am very draconian when it comes to debt. I kind of have like a anti-debt attitude and that’s just because of you know having been at that peak, crushed by $128,000 in debt of all kinds, but the bulk of that being student loans.
Bri: It just put an irrevocably sour taste in my mouth and I was like never again. But I respect and understand that some people were able to have a healthy relationship with it. So I have, one part is a question and then another is like sort of a jumping off piece. So my first bit of that, the question is, what are your views towards debt?
Gaby: So one thing that my parents was to always pay off my credit card in full and that was something that was instilled in me from the very beginning of like having a credit card. And I personally am like pretty responsible when it comes to money so I always paid off credit cards in full. And then I was like pretty lucky in terms of like student loan debt where I had a very generous financial aid package so I didn’t really have to take on debt in a way that like crippled my life so I’m very fortunate in that way. But yeah. Credit card debt for me was always something that like I was warned against having and I think I didn’t really understand why I had to pay off my credit card in full until I started writing about credit card debit. And now that I see the interest rates on credit cards, I’m like okay, I’m happy my parents taught me that early, so that’s always been something that I personally practice. And I think it’s just helped me so much. Just that one bit of information cause that helps you, you know, build credit and have a good credit score which helps when you want to rent an apartment or apply for more credit cards. So I’ve been very, I’ve been fortunate in that I’ve been able to avoid debt for the most part, but a lot of it does come down to discipline spending and, you know, telling people yeah I don’t think I can go on that vacation this time or you know I’m gonna not order that second drink and dinner. So there’s definitely a discipline component, but it’s just something that’s like, was instilled in me. So that’s always been in the back of my mind to not spend more than you have. So that’s been my approach.
Bri: I love that. And it’s refreshing because, and it’s sort of like what got me thinking about this from yesterday’s conversation is there… how do I say this delicately? So basically, there are pieces of the curriculum where it was, you know, the focus was just like helping people understand how to best manage credit. And you know, while that’s perfectly well intention, we want to be careful of not, you know, not reinforcing the mindset that one must be so beholding to that FICO or to that credit score that they’re not practicing good financial sense. Like staying in debt ridiculously long because I don’t want to close that account or I don’t want to pay more than the minimum because that’s going to drop my score. It’s like even if it does, it’s temporary. But also think of the money you’ll be saving and interest you won’t have to pay because you’ve cut down the principal and you’ve paid it off early. I mean, I feel like, as a culture, like as an American culture, we are like so fixated on just doing everything to make that score jump up, but you know, sometimes, that can be you know simultaneously reeking havoc on your spending power and your financial potential. And I go back to that whole slippery slope mentality and people are like yeah well you know getting a credit card, you know, just be responsible which, I’m so glad to hear that you’ve actually been that cause so many people just put that out there, but they’re not backing it up with actual experience or understand that life happens. And you know it takes just one missed paycheck or one forgotten payment you know to fall behind the eightball and then they’re calling you up and ringing on your door like where’s our money? You know, potentially getting into default and then it just snowballs like you know into these behemoths that people are like how did a TV turn into a $35,000 bill? You know?
Gaby: Yeah. I think that also ties into the importance of having an emergency fund. There’s definitely been months where I have spent more than I have made and fortunately I have had enough money in my bank that I can just transfer funds to my checking account and been able to pay off my credit card in full. Obviously no one likes withdrawing from savings, but you know that’s what that money is there for, it’s there to be a cushion for you when you need, and it’s better to not take on debt that’s gonna have a high interest rate than to have your debt spiral out of control because you spent too much one month. The thing is, once you get behind, it’s so easy to stay behind, you know, so it’s like having that emergency fund in place, it’s like you know I know when I have to make a down payment on my lease for a new car for three years like that’s a tough one for me financially, but I know that I have that emergency savings. There is a backup where if I didn’t have enough in my checking account I can put some of that money there, you know. So I think it’s just important to always have backup cash.
Bri: Yes. Like hashtag a credit card is not an emergency fund. (laughter)
Gaby: No, no. (laughter)
Bri: Yeah, that needs to be amplified from the mountain tops because it’s just, I think, going back to something that you said even earlier of just this kind of care free I can have it all without earning it all attitude, Definitely this sense of entitlement and you know just wanting instant gratification for everything. I know that that’s really big with our generation and it just kind of, you know, goes against, and lies in the face of better judgement, you know, like with working out it’s a consistent effort and that you have to earn your gains, right? And whatever that looks like for a person, so it’s like why don’t people realize that it’s the same deal with money? Like…
Bri: And even I don’t know, I would love to hear your thoughts on this too, it’s not quite credit, but it’s building that same bad habit of the installment deals now where everywhere you shop online there’s Klarrna, there’s afterpay, there’s… I have been so tempted to use that when I’m low on cash and I’m like oh I need a new, you know, pair of running shoes and obviously it’s for wellness it’s not like just buying a pair of luxury whatever. But even still, I was like, I don’t want to set this habit. Like even though there’s no interest and it’s like four months and it’s like a finite ending, I just don’t wanna build that mentality again. You know? Having been way behind on two credit cards, that are thankfully behind me and closed out, it’s like I don’t wanna mimic that same behavior, so I’m really curious to hear like how you feel about that.
Gaby: Yeah, so I did use a buy now, pay later payment one time and I can’t remember what it was for, but it was definitely something I absolutely didn’t need.
Bri: Mmm. (laughter)
Gaby: It was just something that I wanted and I was like oh you know this like more than I would normally spend on whatever it was. I can’t even remember, but I did it in installments. And so I did use it one time and then I think since then I’ve been kind of scared of it because I feel like you know it’s the same idea as a credit card even though it feels like it’s not because there’s no interest and it’s like yeah there’s no interest if you pay it off every month that you need to. And usually you know, unless it’s like a huge purpose, they seem small and it’s fine. I’m not against buy now, pay later plans as long as you know that you are someone who is going to keep up with it, but if you’re seeing it as an alternative to a credit card, I mean, it kind of is, because the payments are spaced out, but it’s kind of not because you still have to pay interest if you miss your payments. And I think people you know don’t read the fine print. And I actually just wrote a story about this where like, with those kind of things, the decision is made at the point of sale and you’re there and it’s so tempting because you know you’re like oh this sounds like a great idea let me just do this, but I think you know if you click here to learn more you might see some numbers in terms of interest rates that look scary and that may make you want to take pause and think twice butI think because it’s right there in front of your face and you’re just like yeah, this is great let me do it. That can be an issue, so I would say you know it’s not necessarily a bad thing if you can make all the payments, but I would definitely click to read the full terms of what entails before anyone uses the buy now, pay later things. It’s easy to fall behind on those payments too and I actually, there’s a survey, I don’t have the stat free right now, but it was like the majority of people use it for something that they didn’t need, which was like me where it was like yeah I don’t really need this like new, I think it was like, I think it was actually a handbag. I think it was a handbag that was served to me like an ad on instagram. And I was like this an algorithm winning. It was a designer bag that was on sale that I didn’t need, but was like oh wow this is a good deal, but still more than I would be able to pay off at once so I did the buy now, pay later for it. So it was something I totally didn’t need and gave into social media advertising. And the thing I was going back to is the stat that most of the people who use it buy something they don’t need. So I think it’s different if you’re using it for running shoes like I run to so I understand if you need running shoes like it’s time to get new running shoes cause otherwise you’re going to get injured. So it’s like you have to get it, but it’s like when it’s a designer bag maybe think like if I actually had to pay this whole thing at the end of the month like would I still buy it? And if the answer is no, then I feel like you should think twice before using it.
Bri: Totally. And that was the mental war I had back and forth, you just touched on. It’s like okay well it’s, you know, to improve my health. Like my other shoes were starting to like, they were so worn. Maybe like three years old and just battered. And it was like an arch support issue and just not good traction anymore, and I was like, I truly need you know the right type of gear you know, just to be able to be like functional and be active again. And I ultimately decided against it because I was like you know at the end of the day I just don’t wanna open that pandora’s box because I just know my psychology. I’m like I know there are so many more disciplined folks out there who are probably like having the time of their lives using this and it’s like working as intended and they’re not getting behind and it’s all good. But I was like, I just know that based on my track record, at least as I foresee, I don’t think I can be that person. So I need to um you know kind of align with the ramsien, the dave ramsey school of finance and teachings, like make it hurt you know. Like have that, see that pain of that full payment coming out of that checking account as opposed to oh okay well I can live with seeing fifteen dollars gone now and you know next month will be fifteen and the month after that will be fifteen. You know just making it more palatable. He’s like you want friction like you don’t want it to be this detached seamless thing because that’s how people get caught up is when it’s like oh I don’t have to think about it, I don’t have to worry about it. I don’t have to feel that, you know, small tinge of pain of oh gosh I worked so hard to get this balance in my account and now it’s going down so I think just what we’re vibing around right now is the psychology of money and how it’s more than just math, it’s mentality, it’s matter of behavior, your relationship with it, the habits you build, and you know, just your general mindset around what it means and that can always be good or it can be bad. Um I know we’re coming up on time, so, to just wrap up a bit, one final question is if you could advise your younger self on any money issue or it could be whatever, but just like anything most likely related to money, what would that be?
Gaby: Yeah. I wish I had started investing sooner in the stock market. I was really really really scared to invest money in the stock market. To me, it seemed like the same thing as gambling.
Bri: Oh wow.
Gaby: And then I you know, as I started writing about it, it’s like I well, first of all I’m not a day trader, so that’s like a whole other ball game, but if you’re looking to have your money grow like long term, for a lot of people it’s a great way to, you know, grow your money over time through compounding interest. And I did not open my first brokerage account, until I think maybe, a year and a half since starting this job so I think I’ve had a brokerage account for like three years and I’ve just been able to see my investments grow. And I wish I had started that sooner. As a disclaimer, I think that everyone should know that there is risk when investing in the stock market. Like yes, over time the trends tend to be upward, but you can definitely lose a lot of money in the stock market and so you know in a way it is a gamble, so I don’t want to advise anyone to invest especially, I wouldn’t advise anyone to do any, to put any money in the stock market that they wouldn’t be able to live with if they lost it.
Gaby: (laughter) I’m not a financial advisor, but I do think that looking into investing, there’s so many like ways to get started with small amounts of money now, through all like the different apps available and different like platforms and funds. So I think everyone should like look into investing at least and decide it’s for them rather than just completely shun it and think that it’s scary or that it’s a gamble. And I think that it’s… Like I think women specifically are very um uncomfortable with the idea of investing. So I would say that was the one, that would be one thing that I would tell myself, to start investing sooner and also take 401K contributions seriously. Cause I’ve always had a 401K, but I definitely wasn’t always putting enough into it, so I would say those are the two things, like think long term you know. I would say those are the two things that I would’ve told my younger self. This, you know, retirement can be a long period of time (laughter) and I would love to retire one day so even if you’re in your twenties like start thinking about it now, and think about ways you can grow money for your future self.
Bri: That’s sage advice. Like as sage as it gets. I think so many people are like you know not knowing how to play the long term game because it’s strategic. It’s like you know even to just open an account, I mean, anyone can definitely do that, but to make it part of a long term plan and know that it’s for the long haul, cause that, if there is anything that I want people to like pick out of everything you said, it’s the fact that it is you know, it is risky. Like you can lose money along the way and absolutely the trajectory usually always points up, but if you’re not prepared for those intermittent losses, this is not the path… this is not for the faint of heart like you just have to be prepared, you know, for that possibility. Hopefully it won’t affect people, and if it does, it’ll be minimal losses, but just knowing that it’s not like an ATM, like you buy stock in Disney and you’re like okay so if this you know vests a hundred dollars in a month, I’ll just you know pull out and just cash that and it’s like no you want to stick with that over time. And definitely grasping that as a young person I think because as kids we aren’t just by nature and that instant gratification mindset and we’re like, longevity, what’s that? Like I want money now and I want reward now, so it’s really awesome, that you know if you had the opportunity and the ability to meet with the Gaby of fifteen, twenty, X amount of years ago, that you know, that would be what you’d share.
Gaby: Yeah, definitely.
Bri: Very awesome. Well, thank you so much again for time and just for your incredible insights and all these gems that you’ve been dropping. Super excited to introduce you further to our community. They got a glimpse when you mentioned and promoted our interview about a month and a half ago, so…
Bri: I made a post then and it was a teaser, and it was like stay tuned for part two cause there’s definitely more where that came from. So really excited to put this out there and thank you again just for your authenticity and making time for us.
Gaby: Of course! Thank you so much! Just as a caveat, I just want to like make sure that this interview is more like, like me and my personal experience rather than like me. Like I don’t want to seem like I’m giving like financial advice.
Bri: Yeah! Yeah, yeah, yeah.
Gaby: You know, I’m not, (laughter) I’m not like qualified as a CFP or anything so yeah as long as the angle can be like you know what I learned, and what I would do, and more like this is what I think other people should do with their money. Cause I don’t wanna, I feel like I’ve tried to clarify that throughout like this is just for me and like other people might be different, but I just want to make that, make sure that comes across that like I can only speak for myself and what’s worked for me and like personal experiences I’ve had with conversation with friends, but not like, I don’t think there’s, I don’t want to make blanket statements like everyone should invest in stock cause I don’t think that that’s great advice for everyone, you know?
Bri: No doubt. No doubt. I will definitely make sure to relay that. I’m pretty sure both Ashley’s are already aware that this is more just like you know, having a feature guest, almost podcast style, as opposed to like…
Bri: You know, meet this expert, but I will absolutely emphasize that, yeah.
Gaby: Thank you so much. Yeah, I appreciate that, cause, I just, yeah, I don’t want anyone to read this and be like I’m going to invest money and then I’m gonna lose and then… (laughter).
Bri: No, we will.. We got you covered, we definitely do not want to open you up to any type of risks like that, so rest assured we will notate everything accordingly. You’re in good hands.
Gaby: Okay, perfect. Thank you so much. And thank you for taking the time to have this conversation with me today.
Bri: Certainly. Definitely hope we can do this again.
Bri: And you know hopefully once we’re out of this second stretch of the pandemic. I can’t remember where you’re based. Are you on the west coast?
Gaby: I am. I’m in Los Angeles.
Bri: Okay. Alright cool. Well I’m based in the Bay Area and Atlanta currently visiting family and heading back to the west coast, but moving to Seattle in early October.
Bri: So it might be a stretch before we can connect in person, bu that also might be for the best while we wait just for this madness to simmer down. But hopefully we can definitely join forces in real life.
Gaby: Yeah, that’d be great.
Bri: Awesome. Alright Gaby, I’m gonna let you go.
Gaby: Awesome, thank you so much.