Mar 11, 2021
Welcome back to the Scale Your Small Business Podcast with your host, Jillian Flodstrom.This week, we’re going to talk about quarterly distributions. Everyone’s favorite question for their accountant is “how much money do I get to spend?” When the answer isn’t what you want to hear, it can be frustrating. But, there is a way to see the money you earned and spend it how you want. Let’s talk about it.
In Mike Michalowicz’s book Profit First, he talks about moving your money into different accounts every month to budget and keep track of your money, but he also talks about celebrating successfully managing and saving money, paid for with money they’ve been able to save by using this process. So, how do we get there?
The account we’re talking about today is the profits account. This is where you’re going to be looking every month. First, you’re going to pay off any debt or any outstanding balances you need to pay. Additionally, you’re going to pull from this account to save for a purchase for yourself, your business, pleasure, whatever you want. That’s the beauty of this technique.
As this distribution to your accounts is quarterly, you’re going to be moving this money four times a year. You do have to be, of course, disciplined in transferring the money over every paycheck. Start small, but make sure that you are upping those percentages as much as possible--monthly, quarterly, yearly, up to you!
The point is that your motivation for saving, budgeting, and managing your money is that you can spend YOUR profit how YOU want. By taking that money out of the profit account, you get to spend it wherever you want, whether that is a really expensive handbag or a fancy car, or just something small. It really could be anything that you want. It's your money to spend throughout the year.
Key Takeaways
- Pull from your profits account. You’re going to be moving money from your paychecks to your Profit Account. From there, pay off any debt or any outstanding balances. Additionally, you’re going to pull from this account to save for a purchase for yourself, your business, pleasure, whatever you want. That’s the beauty of this technique.
- Be disciplined. Start small, but make sure that you are upping those percentages as much as possible--monthly, quarterly, yearly, up to you!
Spend YOUR profit how YOU want. By taking that money out of the profit account, you get to spend it on whenever you want, whether that is a really expensive handbag or a fancy car, or just something small. It really could be anything that you want. It's your money to spend throughout the year.