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Money Minute
Quick Tips
Keeping Your Business and Personal Finances Separate
Money Minute
Apply your good personal finance practices to your business.
 

If you are an entrepreneur, it’s important to keep your business finances and personal finances separate. This is especially key if you’ve gone through the process of legitimizing your business as a separate entity, because mixing your finances may cancel out any legal protections that result from establishing your business entity.

First and foremost, be sure to open up a separate business checking account. This is a clean way to deposit any revenue and manage ongoing business expenses. You should also have a separate savings account for your business.

Next, just as having an emergency fund for your personal finances is important, it’s also important to have an emergency fund for your business. If you suddenly incur an unexpected expense needed to keep your business running smoothly, and you have to take from your personal emergency fund, you will put yourself in a hard position should a personal emergency suddenly arise.

Additionally, you should get a designated business credit card. As a business owner, it is important for you to have a separate business credit score. Having a business credit card will allow you to build up a credit score, which will prepare you in the event you ever need to use credit to grow your business.

Remember, it’s prudent to apply your good personal finance practices to your business.




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