Pay off multiple loans using the Profit First method

Posted on
January 17, 2019
in
Profit First Methodology
Posted by
Ronald B. Allen

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?

Want to learn more about how Profit First will maximize your profits? Click Here to get the first 2 Chapters of the book Profit First for FREE. Provide your name and email on that same page and get the first 5 chapters for FREE instead!

Profit First Methodology

Should Your Accounts be Checking or Savings?

by
Ronald B. Allen
|
July 3, 2018

Learn what accounts are needed when using the Profit First method. Also find out which of those accounts should be a savings and which should be a checking. Set up your accounts now and start maximizing your profits!

Profit First Methodology

Top Accounting Firm in the Kansas City Area

by
Ronald B. Allen
|
January 5, 2019

Exigo Business Solutions is the top accounting firm in the Kansas City area. Use our knowledge to gain actionable insights into your budgeting and cash flow.

Profit First Methodology

Maximize Your Profit in 2019

by
Ronald B. Allen
|
January 4, 2019

Could your business have performed better in 2018? Take a look at the Profit First Method if you want to cut costs and maximize your profit in 2019.