In this short tip, Ryan Vaughn introduces the "Eat Veggies First" principle from the Profit First budgeting system. He uses a personal anecdote about being picky with vegetables to create a metaphor: just as eating vegetables first leads to healthier eating habits, allocating cash to the "vegetables" of a business—profit, owner's pay, and tax accounts—should happen before any other expenses. He recommends a bi‑monthly allocation schedule, typically on the 10th and 15th of each month, where the first transfers are to profit, owner’s compensation, and tax reserves. The remaining cash is then distributed to operating expenses. This ordering forces business owners to see when expenses exceed available cash, prompting them to cut or de‑commit unnecessary costs. The video ends with a call to share the tip, subscribe to the channel, and continue helping others improve their financial health.
Chapters
In this tip today, I wanted to go over a Profit First principle we call Eat Veggies First. Now, I get teased a lot because while I like food, I'm very picky and the list of foods that I like is very small. So generally, when I start some sort of nutrition plan, the nutritionist can sometimes become frustrated with me because, well— I'm not going to eat that. There aren't very many vegetables that I like. And for what it's worth, I'm sorry to all you nutritionists out there. I know they're good for you. And that's what this principle is about. You eat your veggies first because it's typically the healthiest thing on your plate. And studies show that if you eat your veggies first, you actually eat less of the potentially not as healthy items like your carbs, Or in my case, the desserts, because hopefully you're full. What does this have anything to do with your money? What would you think of when I say, you know, veggies first? What's, what's the vegetable for your money? What's the equivalent? Well, it's paying yourself. That's the veggies of your business cash flow. Paying yourself Making sure the business pays your tax burden, making sure there's enough money to give you profit distributions once a quarter, those types of things. Those are the vegetables. And so when you sit down and allocate your money, hopefully twice a month, that's our recommendation. If you're not sure when to do it, 10th and the 15th are the best days, are common days that we like a lot. When you sit down on your days to allocate the cash to smaller plates, to different purposes, the first thing you do is transfer money to your profit, your owner's pay, and your tax account, because those are your veggies. Right. Then, with the money that's left over, you use that and allocate it to the different things. By doing this, it allows you to see One, how much in expenses you maybe shouldn't have, like how short you are when it comes to, this is the cash I need and this is the cash I have available. Crap, I'm short. It's a way for your business to tell you that it, that it can't afford the expenses you've committed to. And so now we need to decommit to some of those expenses. That's why we eat our veggies first. So hopefully if you like this tip, Share it with a friend, subscribe to our YouTube channel. We're super grateful for the opportunity to serve you, and we hope that you have the further ability to continue changing the lives of others by giving them more health. Thank you. Have a good day. Thank you.
