While Kristen is away hugging orphans, we’re going to make her proud and get some work done. I’ll be the cool substitute teacher that lets you watch movies and chew gum if you do your work.
Ready?
If your personal and business finances are still together, it’s time to break them up!
This is one of the easiest ways to get organized and relieve stress or overwhelm in your business.
For most people, talking or thinking about money makes them cringe. We would rather pretend like it doesn’t exist and hope that it magically works itself out at the end of the year.
You did not start your business so you could be an expert on taxes, business expenses, and income streams.
You are an artist and you just want to do what you’re good at.
I get it. But finances aren’t going anywhere because you ignore them.
If you’re at a place in your business where you can afford to hire a bookkeeper, hire it out!
If you’re like most and doing it all on your own, I’m going to make it easy for you in these four steps.
Step One: Remember, you are NOT your business.
It’s not that I don’t love you, it’s just not working anymore.
You are not your business, so your business and personal money don’t belong in the same account.
Get your calendar and block out a two-hour window where you can head to the bank and open a business checking account and a business savings account (and a retirement account if you want brownie points. It’s really easy. I promise.).
You can also use an online bank depending on what you’re comfortable with and what’s best for your business. Research it.
You’ll need a few things (this varies state to state so double check before you go):
- Tax id number or Social Security number
- Proof that your business is registered
If for some reason you don’t have the required documentation, just open a regular account and treat it as your separate “business” account.
Step Two: List out recurring monthly/yearly business expenses.
Hey, I let you chew gum, so don’t go staring out the window during this part! If you had any monthly charges taken out of your personal account, switch them to your business account.
Anything business related should go in and out of your business checking account.
The only thing that should go into your personal account is your big, fat paychecks that will be transferred from your business account. Transfer any recurring expenses from being taken out of your personal account to being taken out of your business account.
That’s it! Tell me one thing you’re going to do today to help your business break up with your personal money in the comments, would you please?
Psst! Karie wrote a bio to include here, but I scratched it to include something personal. This woman, a Financial Freedom Coach, helped me to organize my personal finances (business? Easy! Personal? Um, there’s money in the bank so let’s spend it, woohoo!) in an incredibly short amount of time with supreme amounts of care and humor. Years of dragging my feet were cleared up in a few phone calls.
Karie Hill is amazing, which is why I recommend you go and download her free Woman’s Guide to Financial Freedom at Kariehill.com. You will heart heart heart her. And she’ll be back next Thursday, hooray!
