Mike Michalowicz compares a single bank account to a bowl of Cheerios that gets emptied without thinking. His Profit First system splits money into six containers: Income, Needs, Wants, Dreams, Fixes/Future, and Emergency. Each dollar goes to a specific container, so you see exactly what you can spend.
Here is the problem in personal finances. If you have one bank account, you got a big Cheerio bowl. And what our human behavior is, is here's the serving of cash, we consume it. No matter how much money you've made in your life. And I bet you make more money today than maybe you did 5 years ago. I bet you if you lived check by check 5 years ago, you may still live check by check today. The portion doesn't matter, it's the container. We want to set up 6 containers at your bank. First account is called income, needs, wants, dreams, fixes/future, and the last one's emergency. We're going to allocate the money to these different plates so we know what's available.
