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6 Good Reasons to Separate your Personal and Professional Finances

<p>Do you have a dedicated bank account for your freelance finances?</p> <p>Chances are you don’t. It is pretty standard (yet inconvenient) for a freelancer to use a single personal bank account for everything, mixing groceries and house-related transactions with business lunches and travel expenses.</p> <p>It can get quite tricky (read time-consuming) to review bank statements with hundreds of miscellaneous transactions. Your accountant won’t give you any high five if they have to spend half of their time tracing the history of cryptic purchases.</p> <p>Here are 6 reasons to properly separate your personal and professional finances, ignore them at your own risks.</p> <ol> <li>Having two (or more) banks accounts allows for a clear portrait of your micro-business financial health. It is hard to have a quick glimpse at the viability of your business when there are a lot of noisy transactions.</li> <li>It diminishes the anxiety related to spending money, since you don’t feel like you’re using your personal money for business related expenses.</li> <li>It makes it easier to properly determine what is a proper salary for you.</li> <li>It also makes it easier to know if you have the financial means for certain expenses (a shiny Macbook Pro, a new SSD, a trip to an international business event, etc.)</li> <li>Having a separate bank account for your business activities is also practical when it comes to your tax payments. You can easily know if you have enough money to pay your taxes, without the anxiety-provoking thought you’re spending money you owe to the government for personal activities.</li> <li>If you get audited by the government, it will make things much much much simpler if you have different bank accounts. You probably won’t remember some of the transactions from 11 months ago.</li> </ol> <p>Banks often offer different packages for business accounts, take a couple minutes to contact them.</p> <p>Happy billing</p>

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