Segregate Biz & Personal Finances

When you are a business owner, especially when you are Solo, the lines between business and personal expenses can sometimes become blurred. I totally understand wanting to turn every possible expense into a tax deduction on the business side, and you should definitely take whatever you are eligible for, but make sure that everything you are doing is justifiable.

The #1 thing you can do to start relieving the stress is to Un-blur the Lines between business finances and your personal life and get those finances separate, especially the expense side of your finances.

Creating that separation will bring your personal finances into much sharper focus.

That clear focus on your personal finances defines the expense side of your Personal Cash Flow.

We will cover segregating your business revenue from your personal income shortly (in Mistake #2), but one big key beyond knowing which expenses are business vs. personal and understanding your Personal Cash Flow is maintaining separate bank accounts, separate credit cards, and separate accounting/record keeping to keep your business and personal finances independent from each other.

You will have a better understanding of what all your personal expenses really are. When you know what your personal expenses are, then you will also knows when bills are due monthly/regularly/recurring, as well as what bills are coming down the pike that have a less regular schedule as well as the at the moment buying decisions you make every day.

And the legal liabilities of commingling business and personal funds create a whole other ball of wax that I won’t get into here.