SAN DIEGO (KGTV) — Erin Giddens and her husband thought they had their finances under control — until they took a closer look.
"My husband and I really just had one or two savings accounts that we were just dumping money in. There was really no rhyme or reason behind it," Giddens said. "We really didn't have a good grasp of what the money was for. It was kind of just all in one pot."
That's when they discovered the High 5 Banking Method, a money management system that uses a total of five bank accounts — two checking accounts and three savings accounts.
The first checking account is specifically for bills and mandatory expenses. The second is for lifestyle costs, such as eating out, entertainment, and shopping.
The three savings accounts are each designated for a specific purpose:
- Emergency needs
- Short-term goals, such as vacations or holiday shopping
- Long-term goals, such as buying a house or a car
Sahirenys Pierce, an author and financial educator, said the method forces people to get organized and evaluate their expenses.
"A lot of people just save $20 every single paycheck and they have no idea what it's actually for. And that strategy actually turns people into spenders. Why not just spend it? It's there. So instead I want people to start getting more intentional," Pierce said.
Pierce said designating a realistic cash goal for each account — based on what it's for — makes it easier to manage spending and reach financial goals.
For Giddens, the method paid off. She and her husband were able to pay for trips, a car, and other important events without relying on credit cards. The system also proved critical when she was laid off from work.
"So I knew what that number looked like and I'm like, ok, we know how long this is going to last us," Giddens said.
Experts recommend having at least three to six months of expenses saved in an emergency fund — but that's something not many people have.
According to Bankrate.com, only 46% of people have enough money saved to cover that. Pierce said that's why it's important to find a savings system that works for you, so you're financially covered when you need it.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
