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Pay off multiple loans using the Profit First

August 9, 2018

How to pay off multiple loans and other forms of debt using the Profit First method

Pay the minimum balances due out of your Operating Expenses account. These should be considered "regular" bill payments. Then, use any money you have left in Operating Expenses after paying your other "regular" bills to make an additional payment to your smallest debt.  

No matter what, keep allocating to your Profit account on the 10th and 25th. This may sound crazy since you have debt to pay, but you MUST build up that habit of always taking your Profit first.  

When you do your quarterly profit distribution, take 95% to 99% of that distribution money and use it to make an additional payment to your smallest debt. The goal is to pay off your smallest debt as quickly as possible.

The remainder of your quarterly profit distribution (5% to 1%) is used for you to celebrate. This process has you constantly chipping away at debt (from Operating Expenses) and then quarterly hitting that debt really hard. It is kind of like boxing... jab, jab, jab, then a massive right hook.

How Exigo can help!

Made up of Profit First Professionals and QuickBooks ProAdvisors, our team is here to provide your business with accurate, easy to read numbers that will help you make smart business decisions. We know how hard it is to run a business. Start focusing on the aspects you love about your business by letting us do what we love- accounting, bookkeeping, and coaching.

Want to know more about Profit First?

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Profit First Strategies helps business owners experience profit.

Profit First Strategies

Profit First is a system that helps you produce profits in your business the first month and always. Using this approach to running a small business you can make profit a habit and not a remote possibility. The Profit First approach starts by rewriting the usual bookkeeping formula so that profit is taken and put in the bank with every bookkeeping cycle. The system follows through by instilling discipline in your budgeting and cash flow management. Read our articles to learn the basics of Profit First and Profit First Strategies that you can use this approach to make you business more successful and your business life more efficient and easier.
Profit First helps you experience profit.

Ronald B. Allen
CEO, Profit First Professional, Fix This Next Founding Advisor
Principle of an accounting firm that’s committed to educating business owners on their financial health, providing a trans-formative strategy and helping them experience their profit!