While it might be tempting to blur the lines between personal and business expenses, keeping a line of separation between the two is essential to your business’s long-term success. Don’t know where to start with separating out your personal and business finances? Let’s look at some easy ways to do it.
Open a business checking account.
If you’re serious about keeping your personal and business finances separate, opening a checking account strictly for your business is a no-brainer. Not only is having two accounts tax-smart, it will also improve your organization.
Get a business credit card.
Opening a business credit card allows you to stop using personal credit cards for business transactions, and it’s an easy way to draw a clear line between personal and business expenses. You can also protect your personal credit.
Make it official.
If you haven’t already, establish a separate legal entity for your business, such as an LLC, C Corp, or S Corp, it might be time to do so. Establishing a separate legal entity for your business has many advantages, including the ability to protect your personal assets from business debts, losses, and lawsuits.
Keeping your business and personal life separate is extremely helpful. It’s easy to do. It merely requires a little housekeeping to set things up properly, and then to follow through.