how to rock your finances as a girl boss

How to Rock Your Finances as a Girl Boss

In this episode, I interview Kristen Ricupero, a Profit First coach. Kristen helps small business owners prioritize paying themselves and also create a profit in their business. Kristen paid off over $18k in debt and cash flowed a wedding and began to coach clients on her own. She then realized that the Profit First Method was much like Dave Ramsey’s envelope method, taking each category of expenses into account when creating a budget.

In 18 months, I paid off $18k and was cash flowing a wedding. But it wasn’t as eye opening as owning a business.

– Kristen Ricupero

What is the Profit First Method?

The Profit First Method is a business strategy created by Mike Michaelowicz. Mike’s theory was that if you set aside a percentage of every paycheck towards specific expenses that this will help you create a more sustainable business. This method, however, has some challenges. First, it requires that you set up five business accounts in addition to two accounts outside of your regular bank. Since many people find this process tedious, Kristen specializes in helping small business owners create both accountability and visibility to see what their numbers say about their business.

What’s the benefit of Profit First?

Kristen says that the biggest benefit to the Profit First method is that you get instant clarity on how your business is doing. She says that often people don’t understand how each sale you make is actually much less than you might have anticipated. For example, if you are paid $300, you might only get paid $50. Secondly, she says that it’s very easy for new entrepreneurs to take 100% of every single payment and reinvest it into the business. However, the problem with this mentality is that it is not sustainable.

The biggest benefit to the Profit First method is that it helps pay your most valuable employee – yourself!

Kristen Ricupero

How do you set up Profit First?

Profit First accounts are set up with five different types of accounts:

  • Income account – this is for the account where your payments go into
  • Operating Expenses – this account is for your business expenses
  • Profit – this account is for a small percentage of your sales
  • Owner’s Compensation – this account is to help pay you for your work
  • Tax – this account is for taxes

Two of the accounts are set up at a separate bank to hold extra funds for taxes. 

Where do I set up my accounts?

Kristen stressed the importance of working with banks to find Profit First friendly establishments. Most of the time, she says, that community banks and small town banks will how low fee accounts. She expressed that you’ll need to explain to the bank that the reason for the large amount of accounts is to “keep it for safekeeping.” This clues the bank into the fact that you won’t be leaving those accounts without any funds, but rather, helping you save money. She also mentioned that it’s important to ask if accounts have a minimum balance requirement since the Income account will be depleted every few weeks. 

How much money do I need?

The Profit First Method was developed to better answer this question.  To determine how much money you need in your business, Mike created a list of percentages according to annual revenue in your business. These percentages are known as Target Allocation Percentages. These percentages are basically a way for you to allocate money for each type of category for your business. The less money it takes to run your business, the more take home pay you’ll actually receive. 

How often do I need to distribute money?

Because this method requires you to distribute money based off of a percentage of your income, you’ll need to dedicate a specific amount of time to transfer funds from one account to the other. Kristen says it depends on where you are at financially, but on average, you can expect to distribute money about twice a month although she says some people might need to do this every week. 

Why getting professional help is so important

Kristen says it’s important to get financial professionals involved in the process such as a CPA or an accountant to help you understand and minimize tax liability as well as help you stay on track with your bookeeping. She says it’s far too easy to forget what you spent on your business expenses 3 months down the road, and much easier to do things now. 

Wealthy Mindset Journal


Profit First Book:

Stripe: Get paid for your services

Acuity: Schedule appointments 

Wave: Create invoices and track expenses

Learn more about Kristen:


Remember that each time you get paid is an investment in yourself and not just your business. In order to replace your income, you have to set aside money for yourself and that takes time and dedication. Don’t forget to check out more episodes on the Earn, Save, Thrive podcast. 

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