Profit First with Debt: How to Pay Yourself and Still Pay It Down

Can I Still Use Profit First If I Have Debt?

If you’ve ever asked yourself, “Can I do Profit First with debt?” — the answer is yes. Profit First may be one of the best systems to use when you’re carrying debt.

Why? Because it gives your cash flow structure and helps you:

  • Prioritize payments without panic
  • Pay yourself (yes, really!)
  • Make progress without derailing your business

Let’s break it down.

Should I Pay Off Debt Before Starting the Profit First Method?

Nope. Waiting until you’re “debt-free” before you start Profit First is like waiting to get in shape before you go to the gym.

Debt doesn’t disqualify you. It just adds context.

Profit First is designed to help you create boundaries, regain control, and build healthy financial habits — even while you’re still paying down balances.

How Profit First Helps You Pay Down Debt with Intention

Here’s what Profit First changes for business owners in debt:

  • Separate your money so you’re not guessing
  • Assign every dollar a job, including debt payments
  • Avoid overpaying debt and then scrambling for taxes or rent

You’re not just “winging it” anymore. You’re creating a plan — one that includes you getting paid.

Add a Debt Paydown Account (Yes, Literally)

Here’s a smart move I make with clients: add a 6th bank account just for debt payments.

Step-by-step:

  1. Open an account labeled “Debt Paydown”
  2. Allocate a small percentage, like 2–10%, of your real revenue each month
  3. Pick one debt to focus on first
  4. Make payments from this account monthly

This structure fosters consistency — and helps you avoid guilt-driven overpayments that disrupt your cash flow.

Real-World Example: Meet Tony

Tony, a video production business owner, came to me with $47,000 in debt. He was paying big chunks toward his loans but skipping his salary and saving nothing for taxes.

We set up Profit First, including a Debt Paydown account at 5%, reduced his OPEX from 60% to 48%, and increased his Owner’s Pay over 90 days.

Result?

  • He pays himself every month.
  • He’s making progress on debt.
  • And he hasn’t missed a tax payment in over 8 months

What If I’m in Deep Debt?

Start small:

  • 1% to Profit
  • 1% to Owner’s Pay
  • 2% to Debt Paydown

You don’t need perfection. You need motion. You’re building the habit and proving that your business can support you and your debt obligations at the same time.

Venus’ Bottom Line

Profit First isn’t just for the debt-free. It’s for anyone ready to reclaim their cash flow and stop feeling behind.

You can pay yourself.

You can pay off debt.

You need a plan that works with your numbers — not against them.

Want Help Applying Profit First with Debt?

I’m Venus Michael — Profit First Certified Bookkeeper at One21Accountability. I help creative entrepreneurs, consultants, and service providers build systems that support both growth and debt repayment — without losing sleep.

👉 Ready to breathe again? Book a Discovery Call or explore our free tools to start reclaiming your cash flow.

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