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StitcherYou’re in for a frugal fiesta in this special Frugal Friends episode! Jen and Jill revisit their 2021 Frugal Living Summit interview with Poised Finance Lifestyle’s millennial Latina mom, Sahirenys Pierce, who shares her High-5 Banking Strategy that simplifies your savings. Give yourself a high-5 today!
We all need an emergency fund. We all need to have a little bit of money saved up, just in case life doesn't go to plan.
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Sahirenys runs the Poised Lifestyle blog and you can find her @poisedfinancelifestyle on Instagram. She and her husband recently finished paying off $99,000 of debt in five years living in one of the highest cost of living cities in America with their two young children and she has created the high-five banking strategy to help you simplify your savings.
The Basics of the High-5 Banking Method
Jen asks Sahirenys what the high-5 banking method is, and Sahirenys shares that it is a simple, realistic way to organize finances that doesn’t feel overwhelming and where you can see why you’re spending and saving, ultimately getting ready to invest and build up a legacy for yourself and your family. It’s the structure on which your financial future is built, organized into 5 accounts: 2 checking accounts for mandatory needs and lifestyle spending, then 3 savings accounts for emergency funds, short-term goals, and long-term goals. Once you have all five accounts, you can give your finances a high-5!
Explaining the 2-Checking Accounts Rule
Sahirenys advises prioritizing your income towards your bills. The first checking account is for mandatory needs, and if we don’t have these necessities, it’s difficult for us to start thinking about our future. Calculate your minimum cost of living to know how much you need for your checking account.
Once you’ve got the bills taken care of, give yourself a realistic budget for your lifestyle. These are the monthly things you want to do without guilt, and this way, you can easily keep track of how much you’re actually spending by choice. Jen loves the boundary between needs budgeting and lifestyle spending.
Simplifying Savings With 3-Savings Accounts
Exact amounts are more realistic than percentages, Sahirenys believes. It’s important to know how much money is needed to save for short-term and long-term goals and what those goals are, then break it down from there. Short-term goals are less than 12 months, and long-term goals can take 1-5 years.
Sahirenys gives a unique approach to emergency funds: they should only include your minimum monthly cost of living, equal to the monthly budget of your mandatory needs checking account. Once you get to that first emergency fund month, continue to your 3-months and 6-months. Starting a business? Go up to your 12-month fund.
Jen appreciates Sahirenys’ inclusion of aspiring business owners in this strategy. Jill also enjoys the freedom that the high-5 banking method comes with.
Frugal Future: A More Inclusive Banking Experience
Sahirenys advocates for more accessible opportunities for the underbanked. There are communities without access to banks, resulting in a lack of personal finance structure in these communities. One such solution is making sure there are ATMs available everywhere without being charged extra fees.
Jen agrees, and Jill says one of the ways we can show banks that we won’t tolerate them taking advantage of low-income customers is by leaving banks that charge high fees and switching to online banks and credit unions catering to the underbanked.
Get more from Author
Bill of The Week
Thank you Sahirenys for sharing your bill about less plastic and sustainability, inspired by BILL Nye, the science guy!
Thanks so Much for Listening!
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The Radical Middle
I love the thoughtful and balanced conversations on this podcast. It is so rare to find people who can acknowledge that life is complicated, there is no one size fits all approach to finance, and ultimately the right choice for most of us will be somewhere in the middle.
The fact that these ladies are also funny and entertaining is the icing on the cake.
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