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HMM 35:  How To Save And Indulge Using This Awesome Coffee Rule With Shannon McNay

Episode 35

One big thing Shannon McNay and I have in common is our love for COFFEE.  In our chat I discovered she had a coffee rule that not only saves her money but allows her to indulge, now that is what I call winning!

In real life she is a friend who I connected with at a conference called FinCon.  She’s real, big hearted and of course loves personal finance so we had a lot to talk about!

One more thing I have to warn you about, she is a writer so let’s hope she is gentle on my writing here.  If not you’ve got my back, right?

What You’ll Learn In Today’s Episode:

  • What unusual question she asked her parents growing up and how it shaped her
  • What decision she made even with her knowledge as a banker that cost money and heartache
  • Her challenge with fear and how she conquered it fulfilling her dream to move to NYC
  • Her thoughts on indulgence and her own personal rule on earning her coffee from her favorite coffee shop

Resources From This Episode:

www.shannonmcnay.com

Off The Rails

Twitter:  @ShannonMcNay

One Page Financial Plan by Carl Richards

$1 Monthly Trial in the Fearless Money Sisterhood membership program!

**Update:  Dollar Trial no longer available.**

Fearless Money Sisterhood

 

I’d love to hear from you!  What was your favorite part of this episode with Shannon?

Abrazos (**hugs**),

Jen

 

Click on the arrow below to access the transcript:

Read Full Transcript

EPISODE 35

[INTRO MESSAGE]

[00:00:08] ANNOUNCER: Welcome to the Her Money Matters Podcast, the podcast to help you take control of your finances. Join your host, motivational money coach, Jen Hemphill, as she shares with you practical, simple money insights into real life stories by women like you.

Let’s get to it!

[INTRODUCTION]

[0:00:26] JH: Hey there, it’s Jen. I appreciate you tuning in to today’s show. I’ve got a fun interview for you with really an enjoyable guest and I have to tell you these interviews have been so much fun and maybe I’ve mentioned this before. So hopefully, I don’t sound like a broken record but to me, just really truly amazes me what I learn, what I take away from each interview.

So let’s breakdown what you’re going to learn in today’s episode. You are going to learn what unusual question does guest ask her parents growing up and how it shaped her. You’re going to learn what decisions she made even with her knowledge working at a bank and that cost her money and heartache and you’re going to learn her challenge with fear and how she conquered it in fulfilling her dream to move to New York City.

You’re also going to learn her thoughts on indulgence and her own personal rule on earning her coffee from her favorite coffee shop. So let me go ahead and share with you about Shannon. Shannon McNay is a writer, a content strategist and co-founder of Off the Rails. You can definitely checkout her new scenes, her writings over there at Off the Rails and also at Humanized CRM and I’ll be sure to have links for that in the show notes.

A little background on how we connected. I had the pleasure of meeting her a few years ago at a conference called FinCon and I might have mentioned FinCon before. It is a conference that I love. I’ve gone two times I think already and we met, we just really connected right away. She’s real, she’s giving and of course, she loves personal finance. So we had so much to talk about so I know that you’re going to enjoy getting to know Shannon.

So let’s go ahead and go over and meet Shannon.

[INTERVIEW]

[0:02:35] JH: Welcome Shannon to the Her Money Matters Podcast. I’m really excited to have you here and to get to know a little bit more about your money story, well, I know you a little bit.

[0:02:47] SM: A little bit?

[0:02:48] JH: A little bit.

[0:02:49] SM: Oh, you know me. We know each other.

[0:02:52] JH: So I’m excited to have you here and learn more on your money story. So are you ready to dive in?

[0:02:59] SM: I’m ready.

[0:03:00] JH: Awesome. So Shannon, we know about you the professional and we know you’re a professional writer, you’re great at that but tell me more a little bit about Shannon on the personal side.

[0:03:12] SM: On the personal side, well I’m originally from Cincinnati, Ohio and when I was 25, I fulfilled a lifelong dream, to move to New York City.

[0:03:22] JH: Woohoo!

[0:03:23] SM: Yeah, I know. It took me a while. I spent three and a half years here and I decided I wanted to have more impact in my daily work and wanted to get into startups. So I moved to San Francisco and spent three years there. Then moved in both places for a while and now I’m officially back full time in New York and yeah, I don’t know.

[0:03:46] JH: That’s great and then tell me about the puppy because I see some gorgeous pictures of that puppy. Why did you all decide, tell me why you decided? Sorry, I mean now we’re talking about the same time. We got so excited about the puppy. So tell me about why did you decide to get that breed of puppy and all that good stuff?

[0:04:05] SM: Well, I’ve been wanting a dog for forever and when I was single and living in New York, it was not realistic because I was never home and then I’ve always loved Beagles. That’s what I had growing up but they need a lot of space to run and so when I met my future husband, he was trying to turn me out with a French Bulldogs.

He was like, “They’re really lazy. They’re apartment dogs. They just sleep all day,” and I was like, “They’re so weird and ugly.” And then overtime, they grew on me and then I just realized it’s the more responsible kind of breed for an apartment dweller. So they’re expensive and they have a lot of potential health issues so that was something that we had to think about.

But we really want to have something that we didn’t feel bad if we weren’t home too much. So yeah, we’ve had a lot of that visits as was expected so far but she’s great and she is perfectly content in our tiny little apartment.

[0:04:59] JH: And she is a cutie, what’s her name?

[0:05:01] SM: Her name is Lucy. I named her after Lucille Bald, cause she’s bred, and her middle name is Toby after Toby from the West Wing.

[0:05:11] JH: She’s got a middle name?

[0:05:13] SM: She does.

[0:05:14] JH: I have no middle name and your dog has a middle name.

[0:05:16] SM: I love Toby and I just wanted the reason to call it up but we couldn’t call her that with the first name but I have four names. I am Catholic, so I’ve got middle name, confirmation name, I’ve got names coming out the butt so.

[0:05:28] JH: Well, I’m Catholic and I have no middle name.

[0:05:30] SM: I don’t know how you pulled that off?

[0:05:31] JH: I don’t know, yeah, that’s just a question I’d like to know but anyways. So tell me about how you grew up around money. I want to know it all whatever you feel comfortable actually.

[0:05:43] SM: Money is not a fun issue growing up. So I grew up in what at one point was a really nice well to do neighborhood and then to the city planning and a bunch of issues, it became more or less intercity and so we always struggled with money anyway but then the property value on our home got cut in half overnight. I don’t know if you remember a long time, there were riots in Cincinnati and all kinds of craziness.

When that happened, our home value decreased a lot and that just really made everything difficult and on top of it, my parents sent me to Catholic Schools because if I were to go to a public school in our zone, I would have to go through a metal detector everyday just to get to class. So they didn’t want that. They wanted me to go somewhere more predictable and safe.

So we always struggled. I was the poor kid in the well to do high school. Everyone else had new everything and I was just one skirt for the whole four years and all that fun stuff and I was very aware of it when I was a kid. I wouldn’t say my parents complained a lot but I just knew the situation.

I guess I was a really observant kid anyway. And so I remember asking the question a lot, “Are you sure we can afford this?” So at the grocery store, most kids are putting things in the cart and I was taking things out of the cart. I was like, “No mom.”

[0:07:01] JH: Right, you’re very responsible and definitely very observant. So tell me about some of the conversations that they had, or were they just very quiet, around money?

[0:07:12] SM: I don’t remember the conversations. I just remember one year, we got hit really bad by finances and it was this whole conversation like, “Christmas isn’t going to be a big deal issue, we’re really sorry,” and I was like, “Oh God, who cares?” But I don’t remember. I just remember knowing we didn’t have money growing off trees.

And it helped because of the school I went to, I could clearly see what people had and what I couldn’t have. But it never actually bothered me not being able to have those things. The only thing that bothered me was being treated differently. So yeah, I don’t remember a lot of direct conversations other than when I turned 14 and I was like, “You’re legally allowed to work. Go get a job.”

[0:07:57] JH: That’s funny.

[0:07:59] SM: Yeah, “Happy birthday, get a job.”

[0:08:02] JH: Right, “Happy birthday, go make some money, bring some money home.”

[0:08:04] SM: “Contribute to the household,” that was big thing. Everyone contributes, we were all very much a unit.

[0:08:09] JH: Right, now how many siblings?

[0:08:12] SM: None.

[0:08:12] JH: Okay, okay. So tell me what was the best money advice that you’ve received?

[0:08:20] SM: So the interesting thing about that is I have never received good money advice. In fact, I have never actually received money advice except for one time and that was terrible money advice that I should have ignored but I’ve never received good money advice.

[0:08:34] JH: And what was the terrible money advice?

[0:08:36] SM: Well, I had inherited a credit card that I thought I could pay off making minimum payments only because I was a genius. Obviously that doesn’t work and so the balance grew and grew and I really just wanted to know it’s going to be paid off by XYZ date and I was working at US Bank. I had a friend who was working at US Bank.

We were both tellers and then became personal bankers and I said, “I want to get an unsecured loan to pay this off” this is when you could still do that fairly easily, “because I just want to know that in two years it’s done and I never have to think about it again” and she was like, “Are you crazy? You’re going to pay this interest. Why don’t you get a zero balance zero percent interest balance transfer card?”

And I said to her, I can remember saying, “I don’t want to have revolving anything. I want it to be closed and I want it to be done and I think it’s worth the money spent to do that,” and she appealed to my banker side which is like, “Would you give that advice?” And I was like, “I guess not?”

I ended up doing the balance transfer credit card but I never made a plan like here is how much I have to pay every month in order to pay it off before it expires which the unsecured loan would have done it for me and that was at 22 I believe and I didn’t pay it off until 27.

[0:09:50] JH: Okay.

[0:09:51] SM: So that sucked.

[0:09:53] JH: Yeah because then once it starts off being zero percent and then after six months or whatever the terms of that credit card, it spikes up pretty high.

[0:10:03] SM: Yeah, it does and then you have, even if you use the balance or sometimes there is the prorated fee now like here is a prorated interest fee for what you have left and there are so many ways that that can go.

[0:10:16] JH: It’s complicated because let’s say, you had paid it off or by the time but you used that as a balance transfer and then you use that card for purchases.

[0:10:30] SM: Oh yeah, that hurts you bad.

[0:10:31] JH: That complicates, yes. It’s very complicated. It’s not necessarily that you shouldn’t do it but just know what you’re getting yourself into and like you said, have a plan of action because if you don’t that’s going to bite you.

[0:10:46] SM: Do the calculation, you know what I mean? Literary calculate, “What does that monthly payment need to be if I fulfill this requirement.”

[0:10:53] JH: Right.

[0:10:54] SM: It never occurred to me. I was a personal banker. I swear it never occurred to me and in hindsight I was like, “What was I thinking?”

[0:11:03] JH: Well sometimes, that just happens and it happens to the best of us. I’ve made plenty of money mistakes before and people are like, “What?” Yes, I have. So what would you say, speaking of you received bad money advice, what would you say are the challenges that you have with money?

[0:11:22] SM: The challenges that I have with money are, well I think growing up in the way that I did has benefits, like it has pros and cons. So the pro is that I very much appreciated the value of a dollar. I very much appreciate everything I have and I don’t ever have this feeling that there will be an abundance. So I never go crazy but on the other hand, I have a lot of fear.

Even if, you know I was at Ready For Zero for many years. Even when I knew that my job was great, this and that, “But what if I don’t get another paycheck, what if something happens?” And I constant fear based mentality which is hard when you’re trying. I want to keep a ledger and that’s very important but sometimes in life, you have to be able to take risks for your money to grow.

I had to take risk twice in moving to San Francisco and New York but my career has grown and therefore my money has grown because of it. So it’s balancing that fear with a calculated risk and investing in yourself too. So I would say that just trying to not let that fear make my decisions and it’s keeping me up at night is my biggest challenge.

[0:12:32] JH: I bet. And you’re not alone, there is a lot of people that fear is what keeps them stuck. Their mindset and the fear is the combination of all those things but at least the great thing about it is you’re aware of it and that’s a big stepping stone for sure.

[0:12:51] SM: Definitely.

[0:12:52] JH: And what would you say is your best money that you’ve spent?

[0:12:56] SM: I would say that first bout of money that I spent moving to New York. I moved here at 25. I saved up $3,000 in my bank account. I still had the credit card but I knew it was now or never. I just turned 25 and I said, “I’ve got to do this before life just finds ways to keep me here,” and I saved $3,000. I did the math on the rent that I was going to sign out for.

I was like, “This gives me three months to find a job and to make this thing happen.” And I got really lucky. I got a job within two weeks so I didn’t have to spend almost any of that money. That stayed in savings for many years and I kept that at savings while I was paying that off. That was my emergency fund but yeah, by taking that three grand and buying a plane ticket and saying, “I’m going to go for this.”

[0:13:43] JH: Right.

[0:13:43] SM: And my salary, I kid you not, doubled overnight. I mean everyone talks about how expensive living in New York and I’m like, “Yes but there are more job opportunities and you get paid more for what you do because of the expenses.” So again, it’s that balance. So I wouldn’t be where I am today if I didn’t make that first move which logic would have told me and friends told me, “Don’t do it. You’re not ready.”

[0:14:05] JH: And your fear that you’ve got.

[0:14:06] SM: “You don’t have enough money,” yeah. Exactly.

[0:14:08] JH: Right, that’s great and New York City, if I didn’t have kids, I probably would be living there but yeah.

[0:14:17] SM: You know check back in with me in 10 years and see where I’m at. I’ll either be gone or I’ll have kids climbing up over me on the walls with a bigger space.

[0:14:28] JH: That’s funny and tell us a little bit about and I already know, a little bit of the scoop because you and I have talked various on times but how are your personal finances managed in your home with your husband and who takes what responsibility. Tell us in maybe a system that you all use, tell us how you do that.

[0:14:49] SM: We are still very much working on this which is a test. We have been married for two years, we never did it before. We have yet to find the right system but how things are operating at the moment is I’m handling the larger bills mainly because I have the checks and I’m better at dates and my husband has a whole bunch of automated payments which I love and hate.

So certain things come out of our accounts but we do have one large savings account that’s in both of our names and then we have our separate checking accounts but what we want to go to when money is a little bit more predictable and stable in our lives which at the moment, lots of job stuff is in the air for the both of us, what we want to have is like here is the main checking account where all of the main bills get paid out of and then X percent of that.

So all of our income will go into it and then X percent will go out to our checking accounts separately so we can have play money without having to be accountable for every cookie or coffee we buy and then also the savings. So the idea will be, which we are doing this is like pay savings first like a bill, pay all the bills and then decide on whatever percentage we say every month gets to go into our separate checking accounts.

[0:16:03] JH: I love it. I know you’ve worked at a tech company before so do you use, because you mentioned checkbook or writing checks. Do you use a spreadsheet, a software, a piece of paper?

[0:16:20] SM: I don’t. I honestly have it all memorized, which is really weird. I don’t have a lot of bills though whereas I have student loans, I have cellphone and I have rent. So the reason that my husband’s kept a lot of automated payments is because of what he does for a living. He has a whole crap ton of charges that come up like Amazon server fees and stuff like that.

So he has I think a spreadsheet of all of that and we haven’t merged it yet but for me, it’s a very simple process. It’s pretty much money comes in, when it does I pay everything out close my account, I do cash budgeting for the rest so I don’t need to have to check anything.

[0:17:00] JH: Perfect. So do you use the cash envelope system or just one stash of cash and that’s what you use?

[0:17:07] SM: One stash but that’s because my life right now is very predictable. We even have a separate pet budget so when things get crazy with Lucy, we can use a card for that. We know that money is allocated so for my day to day spending, there’s almost none. I cook all of my meals, I have my snacks made at home. Pretty much, I just buy coffee.

[0:17:28] JH: Well coffee is…

[0:17:29] SM: And like a subway pass and that’s about it.

[0:17:32] JH: Right, perfect and I love that you mentioned the pet budget. We do that as well having our dog because those vet bills can be expensive and granted, he’s really the only one with anything, I mean he just has allergies. Out of all the rest of us in the house, he is the one with the some sort of health issue and it’s really not that bad, it’s just allergies.

But whether he breaks out whatever the case maybe, those add up. He is a high energy dog since he’s a Lab, so sometimes I take him to daycare and let him run around because especially in the winter time and granted where we’re at in DC, it’s not that cold or as cold but it’s still cold.

[0:18:23] SM: It will be cold.

[0:18:24] JH: Cold is cold.

[0:18:25] SM: The cold will come.

[0:18:27] JH: Cold is cold but just those type of things, it’s good for him to go to the daycare and that has made such a difference because when I buy the dog food, I know where it’s coming from. When we take him to the vet, when I take him to daycare, those type of things, it’s all taken care of.

[0:18:46] SM: I think it also helps you not freak out too when you know that’s allocated because honestly, we unfortunately thought we were doing the right thing by going to a breeder. We thought, “Okay this means her health will most likely be better, this and that, we can’t afford a rescue right now.” We got her from the breeder with two parasites and since that first week, we have had health issues with her almost constantly.

But once we finally sat down we’re like, “We now understand what this is really going to cost.” Put the money aside and that way, if we need to stool sample her or something like that, it’s just like, “Okay, do it,” and it’s not like, “Can I afford it?” Or whatever. You don’t have to make that decision when you’re worried about your dogs. So allocating it right away, paying that fund first, it just makes life easier.

[0:19:32] JH: It does and especially with the automation, it makes things easier, you don’t think about it and it’s done. So that’s perfect and what would you say, we talked about the best money that you’ve spent. How about the worst purchase?

[0:19:47] SM: Anything I put on a credit card ever.

[0:19:52] JH: Anything! But is there one in particular that really stings to this day that you can think of?

[0:19:57] SM: No, it was always these little things that you think aren’t a big deal at the moment and you swipe your card and then you’re like, “Oh yeah,” and then you think you have some idea of what you owe that month and then all of a sudden, years go by and you’re like, “What do I have to show for this ridiculous balance that I have to pay off now?” And it’s always 20, $30 at a time or less.

It’s literary my biggest problem is I will nickel and dime myself which is why I have to go to cash. Some people think cash is easier to spend. I think it’s harder to spend because I can clearly see that’s it’s fine whereas with a card, you just swipe and you think you know but my goodness, if you have enough of those little purchases.

[0:20:36] JH: It adds up.

[0:20:37] SM: Yeah, it really does. So for me, it was never anything big. It was that constant, “Where did that go?”

[0:20:44] JH: Right, right. And it could be even something that, I mean we have already talked about that, coffee and you put it on a card and those things that, “Well, the coffee is gone and I’ve drank it and look how much I’ve been paying on it,” for those type of things.

[0:20:59] SM: Or meals out for me because I do believe that somethings are worth spending on. I have friends who used to tell me like, “You’re trying to help them but you’ll spend $5 on coffee. That makes no sense.” And it’s like, “You don’t see that I’ve packed my lunch, I pack my snacks, I eat dinner at home.”

When I went out to dinner with my friends in my 20’s, I would only buy dessert because I was always one quarter of a price. So we eat dinner and then I would go out with them and have dessert. So you have to allow yourself some things to look forward to and I even had a deal with myself to earn my coffee. I had to do a half hour writing at the coffee shop every morning.

[0:21:34] JH: You are so disciplined.

[0:21:34] SM: If I didn’t wake up in time, then I had to get the dollar coffee from the truck on the way into work, so that was a little deal I struck myself. But you have to allow yourself some things or you will never sustain what you’re trying to do.

[0:21:45] JH: Absolutely, for me it’s a diet. There is the, “Yes, we know that to lose weight, it’s a matter of balancing the calories coming in and then the calories that you’re burning,” right? But if you restrict so much, whether decide.

[0:22:05] SM: You end up eating a pint of ice cream at one night.

[0:22:08] JH: I’m sorry?

[0:22:09] SM: You end up eating a pint of ice cream in one night.

[0:22:11] JH: Exactly. So it’s the same with finances, I think. You’ve got to have to find some balance and maybe finding that balance is going to take you, it all depends on what your priorities are and how your journey is coming along. But I definitely, always relate it to the diet thing because you can say, “I’m going to cut out sugar for the rest of my life,” knowing that you well like chocolate and Starbucks.

[0:22:43] SM: Yeah.

[0:22:43] JH: That’s going to happen sometime so it’s the same with finances. You can’t say you’re not going to spend X amount of money forever. You’ve got to find that balance and treat yourself. It’s okay and not feel guilty about it especially if you plan it and budget it in. So that is beautiful. So do you have any money book that you’ve really enjoyed that you would recommend?

[0:23:08] SM: I don’t really read money books. I know it’s weird because I am a personal finance writer. I’ll read blogs and things but I’ve never actually really felt excited about a money book I’ve read. I will say though that when I was at, well we were both at FinCon and who was that speaker, that one page financial plan?

[0:23:28] JH: Yes.

[0:23:29] SM: Carl Richards, I have his book and I very much am looking forward to reading it because I like that he has a very straight forward approach and he makes things and that same complex very logical and simple. So I imagine that that will be one that I really like.

[0:23:44] JH: Yeah, that is one with the drawings and everything, just keeping it simple. I have not read that one but it is on my list to read for sure.

[0:23:53] SM: And he was so great.

[0:23:55] JH: He was amazing.

[0:23:55] SM: What a great speaker so yeah.

[0:23:58] JH: Yes and I know you listeners, I will link the link to his website so you can check him out and learn more about him. But he is definitely a phenomenal speaker and I believe writer, I haven’t read his book but it looks really…

[0:24:14] SM: And he’s a regular guy, so accomplished but so humble. So that’s part of why I think I want to read his money advice too because I don’t feel like it’s going to come from this place above.

[0:24:26] JH: True, true. Very true, very true and is there any money quotes that sticks out that you would consider your favorite?

[0:24:37] SM: I like “pay yourself first”. I like the idea of if you want to save money, pay to yourself first as soon as you get paid, just like a bill otherwise it won’t happen.

[0:24:49] JH: That is a good one and it’s definitely something great to follow. Well that was awesome Shannon. I know you know this podcast is all about making money simple and taking control of it. So how would you finish this sentence: Her money matters because ____.

[0:25:08] SM: Her money matters because it will enable her to live the life she really wants.

[0:25:14] JH: Perfect. I appreciate that Shannon. Now where would be the best place for people to find you and learn more about you?

[0:25:24] SM: Right now, I would say Twitter.

[0:25:26] JH: Okay, perfect.

[0:25:28] SM: I’m on the fence of starting my own personal finance blog. I have a website where some of my work is linked which is Shannonmcnay.com but yeah, I think Twitter right now is the best until I decided I’m ready to dive into my own blog or not, that is the best place to find me.

[0:25:46] JH: Perfect. Well, I’ll be sure to link those two in the show notes and Shannon, thank you so much for joining me and sharing all that with us today. So I appreciate that and I know you and I will be talking again soon.

[0:26:01] SM: Yes and thank you so much for having me. I’m so honored to be a guest.

[0:26:04] JH: Oh no, thank you for being here.

[END OF INTERVIEW]

[0:26:08] JH: That was so much fun. I always enjoy talking to Shannon, whether it’s on the phone or in person or via text. So I hope that you enjoyed our time with her as much as I enjoyed chatting with her. Now she spoke about a couple of times but I want to make sure that you know more about just in case. So she talked about revolving loans and unsecured loans.

I’ll talk more about that in a bit but before I do that, I wanted to acknowledge one of the members in my Fearless Money Sisterhood Program. Her name is Laura, so Laura has no clue I am going to do this but I’m not going to give out her last name just for confidentiality reasons. But Laura, one word that I would definitely use to describe her is driven, and driven to the core.

She has definitely made a commitment to improve her personal finances and it’s so obvious, her drive, her commitment by her participation in our monthly calls, her questions, her participation in our group and she not only consumes the content, the materials, the tools that are provided within the membership program but she takes it a step further and actually implements and put it into action. I completely love that.

So Laura, I wanted to acknowledge you, your hard work and to tell you to keep it up because you are doing amazing and I know that those goals and aspirations that you are wanting to achieve with your personal finances are going to come to fruition. Just keep up the hard work. Keep up that drive and keep up that action.

Now, let’s talk about those terms. So these fancy words, I call it fancy words that Shannon used in our interview. She talked about revolving loans and she talked about unsecured loans. So let’s talk and define that just in case you heard the fancy words but you don’t know what they mean and once I tell you what they are, you’re like, “Oh yeah, I knew this,” but it’s just good to know because at times, we go into a bank or maybe we don’t go to a bank anymore?

But maybe we are talking to customer service and they have mentioned those fancy words but we don’t know what they are. It’s not that we don’t know, once we find out what they are, we’d understand what they are. So the revolving loans are just basically if you think about, the name involved “revolve”. So in revolving loans, there’s no set specific date to pay it off, you just pay as you go.

Those are your credit cards, those are your lines of credit where they have an interest rate but they might have a minimum payment but the payments could go on forever. It’s not a five year loan or a 10 year loan or a 30 or whatever it is, it just can go on forever. It all depends on how you are paying it. So those are revolving loans.

Now, she also mentioned unsecured loans. Unsecured loans are also known as “signature loans” and these are given out solely on credit worthiness. Okay? So it is a finite term to the loan and there’s also a definite payment so it’s a given that you pay a certain amount every month and you’re going to be paying that amount for X number of years depending on the terms of your loan.

And it is considered high risk so the interest rates tend to be higher but there is also another term and that term is secured loans. So secured loans are your vehicle loans, your mortgage loans because these loans need collateral, which makes the risk in the eyes of the bank lower and the interest rates are lowered but you have collateral.

They can put a lien. You put up something that in case you default on the loan, you have to give that. So in a case of a mortgage, if you default especially for an extended period of time, guess what? You have to give the house back, right? So it’s some sort of collateral that you put and that’s how they give those loans.

So I just wanted to make sure that you know those fancy words even though I’m sure that maybe you already have a mortgage, you’ve used a credit card, maybe you’ve already taken out an unsecured loan but you forgot or weren’t aware of those fancy words so now you know if you didn’t know.

So that is a wrap for today. I wanted to thank Shannon for joining us, for being so real as usual in sharing her story. So you can check out more about her, where to find her at Jenhemphill.com/35, as in Episode 35 and you can also find out more about my Fearless Money Sisterhood Program that Laura is a part of by simply going to the show notes or just Jenhemphill.com/dollar.

So thanks again for joining me today and we’ll catch you next Thursday.

[END]

P.S. THANK YOU for listening!

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2 Responses to HMM 35:  How To Save And Indulge Using This Awesome Coffee Rule With Shannon McNay

  1. kym February 6, 2016 at 6:55 pm #

    I just found your podcast! Great. hahaha I love the part about your guest moving to NYC. I know exactly what you mean about having more opportunities when you live there. I lived in the Lower East Side for years and truly miss it. Although you are right having kids makes a huge difference 😉 We are now in TO.

    • Jen Hemphill February 7, 2016 at 6:29 pm #

      So glad you found my podcast and that you enjoyed this episode Kym! Amen, on the kids it definitely changes the kind of decisions you make :-).

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