As a young Millennial mom, Sahirenys Pierce aspired to reach for her dreams but felt she was carrying baggage she needed to let go of to get there. Juggling student loans and high living expenses while trying to live her best life and start a family were not easy tasks to manage. However, Sahirenys noticed she was not alone in these feelings as so many of her Millennial peers expressed similar sentiments. The reality, Sahirenys found for many Millennials, was that countless were at the beginning of their financial journeys and needed practical financial advice they often hadn’t received from traditional community and educational spaces.
Her recognition of the issue grew stronger when navigating the financial services industry working for organizations such as Merrill Lynch and Ameriprise as an Afro-Latina woman. As her financial knowledge grew, Sahirenys shares that in many conversations with her Millennial friends she felt as though she often was “speaking a foreign language.” She also unearthed that within the financial services industry she didn’t see many people who looked like her or her family receiving the professional financial help they needed. To address this gap, Sahirenys created the Poised Lifestyle, an organization geared to simplifying financial topics and build generational financial knowledge.
Then one day, while discussing banking with her husband, Freddie L. Pierce, Sahirenys came up with the High-5 Banking Method. Sahirenys notes that listening to popular songs like Baby Shark and Finger Family, her children had playing in the background, helped her come up with the idea. Both she and Freddie counted how many accounts they used on their hands and stared in awe.
Sahirenys Pierce: The High-5 Banking Method is based on the old principle of creating accounts for savings, for ne, and for fun. This was something that my husband and I started doing naturally when we joined accounts. I noticed that a lot of people were trying to budget and save money, but would consistently double dip into their savings for bills and lifestyle expenses. I realized they were trying to force their finances into one checking account and one savings account, a method that wasn’t working. I created the High-5 Banking Method to simplify how to manage your finances purposefully with multiple accounts.
Brittany Chambers: Can you walk us through the method’s five key principles?
Bills: Imagine all of your mandatory bills like your thumb. It’s the strongest and biggest finger you have, similarly like your bills, it eats up most of your paycheck when you include housing and debt. With bills also serving as your minimum cost of living, you should protect money allocated to bills in a separate checking account.
Lifestyle: This is your pointer finger, this checking account is all about enjoying now. If you gave yourself a budget to spend $200 on fun then hey when you go out you only have $200! The old saying goes: “when you point your finger, you have three fingers pointing back at you” and for this method, those three fingers serve as your financial goals. If you decided to overdo the pointing, say bye bye to your savings.
Emergency Fund: The middle finger covers emergencies that often carry a range of emotions like anger, frustration, and even sadness. Currently, the average American can’t handle emergencies that cost $1,000. This is why it’s important to plan ahead and save for these unforeseen real-life situations in advance in a separate savings account you use for emergencies only. I would also note to make this savings account one you don’t have easy access to so you won’t get tempted to use it for non-emergencies.
Long-Term Goals: This is your ring finger, full of commitment and long-lasting fulfillment. This is the savings account you want to designate for your dream home, a new car, or any large expenses that will take you longer than 12 months to achieve.
Short-Term Goals: This is your pinky, the smallest finger you have and probably the most dangerous savings account you need to keep an eye on. This is the savings account we usually don’t save for, because we often put these items on credit. These are your vacations, cell phones, and any and every fun thing you want to do this year. You can still do them, just save for them in separate savings account away from your other responsibilities.
Brittany Chambers: For someone who is looking to start budgeting towards each of the high-5 categories, how would you recommend they start?
Sahirenys Pierce: Budget according to your priorities and do a check-up following each category. Meaning, see how much money you have left after each category and find cuts in your lifestyle expenses if need be. At the end of the day, we all have to keep track of our spending and we should only place the amount needed in the appropriate checking and saving accounts to maximize our income.
Brittany Chambers: What should someone practicing the high-5 method keep in mind when setting up each of the five bank accounts? How can they make it seamless and easy to manage?
Sahirenys Pierce: I would say to do your research on how your bank charges fees. I know for me I use more than one bank to manage my finances and I use the Mint app as a reference for all of my accounts. It makes it easy to manage all of my accounts from one place and that includes my retirement accounts. Also, remember that everyone is at different stages in their finance pursuits. Only open the accounts that are appropriate for your situation. For example, if you don’t have long-term goals currently then don’t force that account until you are ready for that step in your journey.
Brittany Chambers: Any best tips for saving?
Sahirenys Pierce: Save with purpose and strive to maximize your results, my go-to recommendation has always been to automate your savings . I would also add to automate these savings in a high-yield online savings account that isn’t with your primary bank. If you think about it this is how most retirement accounts, like 401(k)s, are set up. This strategy is effective because the money is taken out before you see it and placed into an account that you don’t have daily access to. The rationale is that you won’t see it so you won’t touch it. Another reason that I am a big fan of high-yield online savings accounts is that your money can grow at an annual percentage yield (APY) of 2.20%, which means your savings is making money instead of making pennies at your traditional bank.
Brittany Chambers: I recently learned of the 52-week challenge where you save $1 the first week, $2 the second week, $3 the third week, and so forth until you put away $52 at the end of the year on week 52—saving a total of $1,378 in a year. What do you think about this plan? Any others you would recommend?
Sahirenys Pierce: This challenge works if you are a competitive person who likes challenges. The only problem that I see with this method is that people tend to stop saving once the challenge is over or they quit within the first few months. I would recommend setting these types of saving challenges with a purpose like saving for an emergency fund or for a specific goal. This way you don’t get tempted to quite the challenge and it encourages you to continue this method to reach other goals.
Brittany Chambers: Countless studies have illustrated that a large number of Millennials, to date, lag far behind where their parents were financially when they were their ages. What are some alternate routes for wealth building you recommend to help Millennials bridge those financial divides?
Sahirenys Pierce: For the Millennials in my community, this study falls short, since on average many of us still serve as the first generation in our families to have college degrees. Back in the day, a degree was not required for a good job with financial stability, but today a degree is required to attain a good job with the same level of financial stability as the generation before us. Unfortunately, this comes with a massive amount of student loan debt, meaning that we are starting the race to financial freedom behind the starting line. This doesn’t mean we won’t catch up or exceed our parent‘s generation, it just means that we have different hurdles to get over before crossing the finish line. What we can do now is maximize our financial education, which will help us manage our incomes and lead to more balanced financial lifestyles.
Brittany Chambers: A recent article also took the internet by storm on how Millennials may in some instances have become the “burnout generation.” It recommends that this is due to the reinforced feeling of needing to work constantly. Do you have any advice that would support Millennials in leveraging their financial opportunities to prevent burnout?
Sahirenys Pierce: Society’s requirements have gotten so unrealistic that burnout is going to occur when trying to chase the “things” that the previous generations didn’t have to. We are being advised to have a good work-life balance, go on vacation, workout, make a ton of money, buy a home, get out of debt, and the list goes on and on. You can feel constantly attacked for not being perfect. I think we need to slow down with putting so many requirements on Millennials and pushing the need to do certain things by a certain time. You don’t have to outperform and constantly work to be accepted by society, maybe society ne to get your acceptance letter first. On the other hand, a lot of Millennials and older generations are taking full advantage of side gigs that technology now affords like Airbnb and Uber. They are looking for ways to make extra money instead of depending on one income. The burnout might just be temporary to achieve a certain financial goal or related to trust issues with traditional employment processes.
Sahirenys Pierce: Rich Dad Poor Dad, Total Money Makeover, and Think and Grow Rich for Women. Some of these books my Dad read to me when I was a little girl in elementary school. I naturally grew up with these financial classics. I also like the non-traditional financial books that challenge your mindset like Who Moved My Cheese, where you learn how to adapt and adjust to new situations. I believe both the soft and hard skills are invaluable while on your unique financial journey.
Brittany Chambers: For someone looking to make a lasting shift in their views about their finances—including budgeting, saving, and making investments—do you have an inspirational quote you would share?
I love this quote because I want to show my community that finance isn’t just about numbers and spreadsheets, its a new lifestyle. You learn so much during your financial journey that you actually start to wonder who you use to be. You realize that the ultimate sacrifice isn’t money it’s letting go of your old mindset and embracing a new one.
Parts of this interview were edited for clarity and brevity.