This transcript was generated from the episode audio and may contain minor errors.
[Music]
What's up everybody? Chris Guillebeau here, your host of Sidus Will School. Thank you so much for listening. Thank you for sharing these moments with me. I have been making this program for, I don't know, more than 1300 days now.
And it just brings me such joy that there are listeners from all over the world who all have similar values. We have a pretty diverse group. I hear from people of all different ages and backgrounds, lots of different countries, but all interested in improving themselves, all interested in, you know, finding a way to create more financial security, not just for the sake of accumulating more money. And let's be clear, there's nothing wrong with making more money. Like that's a primary goal of what I'm trying to help people with, but usually for some greater purpose, because if you have more money, then you have more freedom, you have more options and such.
So let's talk a little bit about money. And this is the, this is kind of the practical, logistical part of money here today. I had a classroom episode a while back called something like, don't listen to this boring episode. It was all about some of the basic questions that I get all the time. One of those questions is about bank accounts.
And I actually wrote about this in the "Side Hustle" book as well. I'm not gonna pretend that it's a sexy topic. Hey everybody, let's just gather around the fire and talk about business bank accounts. But I will say it's important. And one of the very few clear recommendations I have, because, you know, people are different, you have different needs, you know, people are in different countries and regions, states, provinces, et cetera.
But one of the, you know, close to universal recommendations I have is that when you begin to earn income apart from your day job, you really need to have a separate bank account. It just makes things so much easier for tracking in terms of taxes, in terms of record keeping, everything else. But today's listener questions that advice, which is cool, you know, I'm open to being challenged. He wants to know if there is another way. So let's hear what he has to say after this message from our sponsor.
Do I really need to open a business bank account? [Music]
- Hey there, Chris. This is Danny from Bozeman. I've been following your show since episode one, and I am still loving the puns. So in the side hustle book, you mentioned that it's important to have a separate bank account for any business, income and expenses.
But I thought that most banks have a lot of fees, and I really want to avoid that. So can't I just use my personal account, but keep detailed records of what is personal, and what is business. Do I really need a business bank account? Anyways, I look forward to hearing your thoughts. Thank you very much.
- Hey Danny, what's up? Thank you so much for listening from Bozeman. I was in Bozeman many years ago for an event that was actually one of my favorite events for trying to remember which tour it was for. I think it may have actually been for the side hustle book. So who knows, perhaps we got a chance to meet there, and I'm just sorry we didn't talk more about bank accounts.
But this gives us a great chance to talk about it if you're with our other listeners. So yeah, I mean, might there be some exceptions to this rule? Well, of course, like there are always exceptions to the rule. And can you technically just keep really detailed records of all your business expenses and business income, but still have it in the same account? I suppose that's technically possible.
Question is, is that really the best idea? Like might there be a much simpler solution? And I think for most people, a much simpler solution is to open that separate account. It's sometimes opening another account, it seems like you're adding complexity, but in this case, it's actually going to make your life easier. Especially as you've got income coming in, you start spending money on the business as well.
So you have income and expenses. A lot of those expenses can be tax deductible. Also, most of us are not as good at keeping records as we might think. Like I actually already know that I'm not good at keeping records, but I think a lot of people, when they say, "Oh, I'll just kind of keep it, I'll keep track of it." You know, there's a lot of stuff that happens over time. And what if you're looking back, eight months into the past or however long it is when you're working on your taxes, like, do you really remember, are you really able to kind of pull everything out as easily as you think?
So my recommendation is, definitely get that other bank account. It's also motivational, I think. Like once you start making money to like put this money in a different bank account, and you're like, "Oh, that's my business account." 'Cause I've never had a business before, but now I do, it feels good, okay? So overall, yes, I think most people should do it. Now, Denny's main concern is about fees, okay?
So I actually don't think that has to be a big concern, because at least in the US, it's possible to find a business checking account that has no fees, or maybe it's minimal fees. In some cases, you might have to maintain a minimum balance. You might have to put $1,000 into that account or something else. You might have to make a certain number of deposits. There may be some requirement, but it's usually not that difficult.
And as I said, it's a competitive space. There are a lot of different business checking accounts out there. You don't have to go with the one from the bank in your area. Also, there are lots of online banks. I'm working with two online banks right now, and I've never been into one of their branches.
So in short, if you're not happy with your bank or you're concerned about the fees, maybe the answer isn't to combine everything into one account, but to find a new bank. So there you have it, my two cents, deposit it in the right account. And listeners, if you have a question of your own, come to sidehustleschool.com/questions. We're gonna continue to feature them throughout the rest of the year. I've been hearing from so many listeners.
It's so much fun. Let me know what you're working on and what your challenges are. And of course, be sure you're subscribed. You can do that wherever you listen to podcasts. I'll be here.
My name is Chris Guillebeau. This is "Sidistle School." [Music]
from the Onward Project.
