In an exclusive interview, BabyGaga had the opportunity to chat with Julia and Philip Olson. This longtime couple are new parents and also financial experts. Together, they host the PBS digital show Two Cents where they simplify money and breakdown finances in an understandable way. They cover a range of topics from affording regular dinner dates, the costs of moving, saving for retirement, taking on the wedding industry and buying a home.
Their videos are meant for millennials and Gen-Zers who are in the throes of adulthood and money woes. These generations have inherited a not-so-great economic climate in the form of expensive housing, insane student debt, and lower salaries coupled with a higher cost of living.
One of their videos covers the costs of having a baby, and as parents, we know that the baby industry is all about making money. There is the initial sticker shock when you realize just how much certain baby items cost and how many things you need for the baby. Or you think you need. Don't even get us started on the costs of a baby as they grow into toddlers and kids!
Keep reading to see Julia's advice on how to save money in your baby's first year and why it's important (and easy) to be fiscally responsible during this huge life event.
BabyGaga (BG): Two Cents is an educational finance show that not only makes money fun but understandable to those of us bad at math and finances. Where did this idea come from and how did it come to fruition?
Julia Olson (JO): When we started our own financial planning firm some years ago, we knew that we wanted to make videos to help us stand out but we didn’t want the videos to be boring ads about us and the firm. We wanted to take the opportunity to help educate people. So, we started making our own videos with an educational bend in our own living room as best we could. A friend of ours I’d known through the theater world reached out to us to say that he was working with PBS Digital Studios and they were looking for personal finance content and new ideas for shows - and that’s how Two Cents was born!
BG: What are you trying to achieve and get across with every Two Cents episode?
JO: We’re really trying to communicate that anyone can be better with their money. Jargon and a self-serving industry has made it seem inscrutable. But personal finance is not as scary and complicated a world as you might assume. Ultimately, success lies in a few really simple concepts: live on less than you make, keep away from debt as much as possible, and invest for the long-term. Now there’s a lot of ways to approach those three things, of course, but it’s pretty simple when you boil it down.
BG: What are each of your respective finance backgrounds? And please tell us how you met just for fun?
JO: Philip went into the financial industry around 8 years ago, after having been in the theater world teaching kids at a private theater school. He started in the “big box” financial industry at a large firm and quickly learned that the traditional financial industry is primarily geared towards selling financial products. My financial background started after being an entrepreneur in various businesses: personal organizer, contract assistant, selling vintage clothes. I then found myself in the mortgage world and became a licensed loan officer. It was an intense world and I had to learn very quickly how to dig into people’s finances and calmly walk them through a complicated and emotional financial process in order to buy something really expensive. So, that was my intro into the finance world and it gave me a unique window into people’s personal finance and the decisions they make and why they make them. We both decided that we’d take what we’d learned from our respective industries and past experiences and try to create a firm that actually helped people in the ways they needed to be helped, such as learning how to manage cash flow, how to organize their finances, and how to create a healthy relationship with their money.
Philip and I met in January of 2006 in theater school at the University of Texas. We were both assigned to be techs for a show backstage. I was in wardrobe and he was in the sound booth. I thought he was really cute and so I decided to go up to the sound booth during my breaks, even though I had no business ever being up there, and make a nuisance of myself. So, that’s how we met! And a year and a half later, we were married even though we were practically babies! And while our parents were very supportive, they made it clear that adult decisions came with adult consequences and we had to learn how to support ourselves right from the get-go. So we had to start our financial maturity journey a little earlier than most and now we’ve been married for almost 12 years!
BG: What is the most important advice you have for parents of babies and small children when it comes to money?
JO: Retailers know very well that raising a small child is an intensely stressful time and that we, as parents, are constantly trying to navigate our child’s ever-changing wants and needs as best we can. You’ll hear things from retailers like, “oh this is the sleep sack that you need, and this is the thing that you really need”. They barrage us with all the latest and greatest gadgets. And it’s not that gadgets are bad, it’s just that we’re constantly bombarded with choices from sponsored posts on Instagram and Facebook and things like that. So buyer beware. Most of the issues and things that are causing stress with your child won’t be solved by buying something, which is a hard thing to come to terms with. I definitely find myself there, especially when it comes to sleeping and eating. There really aren’t any silver bullets.
BG: What do you two plan on doing as a family to reduce the expenses of a new baby?
JO: From the very beginning, we really insisted on getting used items. I only have a select handful of new things and even when I registered for our baby shower, I kept the list short and asked people to find used things. I asked friends for things when their babies outgrow them and they, of course, were super happy to oblige and free up space in their own house! So that took a huge chunk out of the potential money we would have spent. I also think choosing to go the cloth diaper route was a good financial decision. We’re 8 months in and I think it’s already saved us a lot of money.
BG: In your opinion what is the most unnecessary cost for a baby that people should avoid?
JO: New clothes, for sure. Because they are growing at such an insane rate, there really is never any need to put a child in a brand new piece of clothing. Also, when first time parents are getting ready to have a baby, they get caught up in this idea that they need a bigger house or bigger car. We feel an intense pressure to upgrade our lifestyle as a whole to accommodate this baby. But what they really need is just you: your presence, your warmth, your engagement. That’s what they really need; they don’t need that other stuff. And, for many years, they’re pretty physically small. They actually don’t take up a bunch of space. It’s all the stuff we think they need that takes up the space.
BG: What’s an easy thing to do to save money as a family?
JO: In general, a lot of families struggle with the cost of food, especially dining out. The most impactful choice that we’ve made is to make meal planning, meal prep, and cooking at home a true priority. I know that we’ve saved thousands and thousands of dollars just by making cooking a priority. And, like I mentioned earlier, we go used for as many things as possible. Pretty sure the only new clothing I buy is underwear and socks! There’s so much amazing, high-quality stuff out there eager for a new home.
BG: When it comes to savings accounts and college funds, what do you recommend to do and when? Should parents be saving money starting at birth?
JO: As far as saving for college goes, we recommend that people wait to do that until their household budget is in a healthy place. Buying college for your kid is a luxury, it’s a gift. It’s not something that anyone should feel required to do in any way. You need to make sure that your oxygen mask is on first and then help out if you’re inclined to. If you’re not, that’s OK! Make sure that you and your spouse are on the same page when it comes to how much you want to set aside. What goal are you aiming for? Do you want to pay for absolutely everything, or do you just want to pay for tuition? A lot of parents haven’t discussed that and that has a direct impact on how much you should be putting aside. So make sure you have that conversation first.
As long as you are out of most of your consumer debt (credit cards, cars, personal loans, etc.), have a fully funded emergency fund of 3-6 months of expenses, AND you’re on track for your retirement, then it’s a good time to look for a 529 account. These are great tax-sheltered accounts where you can save money for any educational expense related to your child. Should parents be saving money at birth? No, of course not. We just happened to have those three steps in place when our little one came along so we did start right out the gate. We’ve also chosen to not necessarily aim for covering room and board, just tuition. We think it’s important that she has some responsibility for where she decides to go and is motivated to pursue scholarships and work while she’s in school. But that’s just our personal choice.
BG: As your baby grows, do you plan on giving more money advice on the cost of toddlers and school-age kids?
JO: I’m definitely open to talking more about the costs associated with parenting as kids get older. I will say that the numbers get squishy because in reality there is literally no cap on how much you could spend for a child. People’s financial abilities and what’s important to people varies widely. We’re always looking for new subjects where inspiration can strike for future Two Cents episodes.
BG: What would you tell a family choosing between starting a family or waiting for a better financial situation to have a baby?
JO: This is a tough question and not one that has a hard answer. What we say is that ultimately, starting a family should not be a financial decision. It is a decision of the heart and there’s no such thing as being perfectly prepared to start. But if you want to minimize the financial stress of the addition, the less debt you have on the books and the more cash in the bank, the better.
BG: What has been your favorite topic you’ve done for Two Cents so far? Is there anything you wish you had included in any episode that you didn’t?
JO: Philip and I have different favorites. Philip’s is actually kid-related, Do Kids Need to Learn About Money? It addresses when to start, what sort of subjects to tackle based on age, etc. One of my favorites was about playing the lottery. I learned so much and found it super fascinating. I’m personally obsessed with weddings so we made a video about Fighting the Wedding Industrial Complex. One of my other favorite episodes explored Women's Financial Superpowers. In my work, I’ve seen a strong trend among women having low confidence when it comes to approaching money. Unfortunately, most women aren’t raised to think they have the innate capabilities of becoming a fantastic money manager, but they do. So I loved unpacking all the different data showing how specifically women are really great with money.
In What Are the Costs of Having a Baby, I definitely regret that I sort of passed over the breastfeeding conversation. We hinted at it a little bit, in considering how you’re going to feed your child will impact your budget. While the breastmilk is free, I’ve definitely learned that the process is anything but free. I had this wonderful vision of a smooth breastfeeding journey in my head and had done a lot of pre-work in preparation but we ended up having a lot of complications. We had a lip tie corrected, had multiple rounds of mastitis that resulted in me not working, going to the emergency room, spent a lot hiring lactation consultants and experimented with different kinds of pumps. So, I wish that I had unpacked that a little bit more to say that even if you are thinking about breastfeeding, don’t think that it’s free. It’s not!
BG: What can we expect from Two Cents in the future?
JO: We’re excited to get into some more sophisticated and nuanced territory. We approached more general topics, like how does the stock market work and how do you tackle debt in our first season. So we’re planning on getting into some more philosophical territory, like how money affects your ability to feel empathy, can you actually link money to happiness? As well as cover more specifics about retirement and investing, like what might be the right fit for you when it comes to an IRA, what the heck is the financial independence movement all about? We hope people will join our community and chime in! We’re always sourcing ideas directly from our amazing tribe.
Julia, thank you so much for taking time out of your busy schedule to chat with us! We learned so much and look forward to more Two Cents episodes!