top of page
  • Writer's pictureJorge Diaz

Applying the Profit First System in Personal Finances

Updated: Apr 22, 2021

I want to share my experience using the Profit First (PF) system on my personal finances. I have used it both for my business and family banking for a while now and I love it.

The System

As conceived/presented by Mike Michalowicz, PF is basically the same thing as the old "envelope" approach, but more from a banking POV. Nowadays, most transactions are digital, so cashing out and putting the money aside is not a good idea. The PF system works as follows:

  • All earned income (salary, self-employment, non-reg dividends...) goes into a single "income" account and then gets distributed under pre-defined % across different accounts.

  • Allocation percentages % vary with time to optimize the budgeting towards increasing savings and reducing unnecessary expenses.

  • Once everything is distributed, all non-operational funds get transferred to a separate bank account to make it harder to use.

  • Distributions should be done once or twice a month to reduce transaction fees.

That is roughly overall, for those who want to get more into detail, just Google for Profit First, it is a crazy top-selling book at Amazon since it was published in 2017. It is originally conceived for businesses, but I started to apply it on my personal side in 2019.

How I set it Up with TD & Tangerine

I had a TD Chequing account with two more savings where I used to put all my funds with a specific "purpose." Now, this is how I labeled these:

TD Canada Trust

  • Regular Chequing Account - TD MINIMUM CHEQUING ACCOUNT (12 free transactions per month - $3.95 monthly fee): LABEL - OPEX (65%)

  • Mid-term Savings - TD EVERY DAY SAVINGS ACCOUNT (1 free transaction per month): LABEL - MIDSAV (15%)

  • Long-term Savings - TD EVERY DAY SAVINGS ACCOUNT (1 free transaction per month): LABEL - INVEST (20%)


  • LABEL - OPEX 65% setup in a TANGERINE REGULAR CHEQUING ACCOUNT (Unlimited Transactions). I do not transfer the 65% of Opex funds here as I operate everything from the TD Account.

  • LABEL - MIDSAV 15% setup in a TANGERINE SAVINGS ACCOUNT (Unlimited Transactions)

  • LABEL - INVEST 20% setup in a TANGERINE SAVINGS ACCOUNT (Unlimited Transactions)

Each TD account has a Tangerine match, but funds move between the two SAVINGS, indeed. I manually "disappear" all savings from my sight at the TD account once a month and leave only the 65% target I defined at the beginning of 2019.

Results after one year.

  • The first "indirect" result is how it shaped my mindset. Each time a single dollar lands into my chequing, I do a split across the different accounts. Although the system is known as Profit First, I would call my use of it now to be more "Investment/Retirement/Savings First" and it damn works.

  • I'm impressed with how much available funds I had for my TFSA and RRSP after doing this. From Tangerine, I use to fund the respective Questrade accounts.

  • Next year I intend to move 10% from the 65 to the 20 of the Long term Savings. 2020 allowances of TFSA (6000) and RRSP (18% on my 2019 income) combined would be at that level and I'm young enough to top these up with this change.

  • I feel I have more control of my budgeting and my income. After all my investments and savings are distributed, I focus on living the month with a friendly budget.I operate every month with a tight but enough budget on my TD account, avoiding the temptation of having (and seeing) more funds every day sitting there. If somehow a transaction seems scary, I double-think everything before making any decision.

  • I manage this "kind of like" my investment portfolio (doing 90% stock / 10% bonds). I now top up as much as I can from the registered accounts and, in the next few years, would probably allocate more for the mid-term/travel/leisure account.

I hope it helps and I could get some feedback to optimize it!


2,020 views0 comments

Recent Posts

See All


Don't Go Alone

About seven every ten new businesses fail during the first year of operations, and only 9 in 100 make it to five years.


Launching and growing a business isn't rocket science, but neither a matter of luck. It takes dedication, rhythm, and guidance.

bottom of page