This transcript was generated from the episode audio and may contain minor errors.
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Hey, what's up? Chris Guillebeau here, your host of Side Hustle School. Thanks for tuning in today. Got a listener call from sunny Orlando, Florida. We're gonna hear from Alex.
Alex has recently embarked on a personal training side hustle offering both in-person and virtual sessions as he begins to acquire clients and process payments. He's trying to figure out the tricky waters of financial management. Now specifically, he wants to understand how to separate his personal and business finances. That's important. What the tax implications might be, also important.
And whether he should formally register his hustle as a business. Okay, these are good questions, topics many side hustlers should consider. So let's delve into it in a few short action packed minutes, hopefully getting you something helpful and allow you to be set up for financial success. Personal trainer finances. That's what we're talking about today in just 30 seconds.
[Music]
What's up guys? I'm Alex from Orlando. I've recently started a side hustle as a personal trainer offering both in-person and virtual sessions. I've got clients starting to come in and payments to process. But I'm unsure how to manage my finances, especially how do I keep my personal and business finances separate.
So I was wondering about tax implications and whether I should actually register my side hustle as an official business. So do let me know if you have any advice for me and thanks for your time. [Music]
Hello Alex. It's great that you're considering this early on. Managing your finances is definitely a critical aspect of running a side hustle.
At the same time, I also like to keep it as simple as possible so that you can focus on other things, much more important in the long-term to think about how can you get clients? How can you build that business? How can you add other services to your offerings and such? But nevertheless, the best way to separate your personal and business finances recommendation for pretty much everybody is to open a separate business bank account for that side hustle. It just makes it so much easier to track your business income and expenses.
It's gonna be super invaluable when tax season comes around. So definitely a different account. And then for taxes, at a certain point, you do wanna consult with a tax professional just because your jurisdiction, your area is gonna be different. Your field, your industry is gonna be different. So for now, maybe just remember that your side hustle income is taxable.
So it's good to set aside, let's say 30% or so of whatever income you're taking in so you'll have that money when taxes come due. Again, talk to a professional at some point. And the same goes for registering your hustle as an official business. Lots of side hustlers do register as an LLC or another form. And of course, it's different in different areas, different countries and such.
But doing that costs at least a couple hundred dollars. So for lots of people, they just operate as a sole proprietor sometimes for quite a while. And again, depending on your industry, personal training is certainly one of them in which it could be totally fine. The other recommendation, again, with the idea of keeping things simple is use some kind of bookkeeping software that is connected to that business bank account you open. This software can track your income and expenses.
There are a lot of different options. QuickBooks, FreshBooks, Wave, Zero. Zero's with an X, X-E-R-O. No affiliation with any of them. They're really all good options.
What you wanna find is something that works for you, something that you are comfortable using so that it's not too much of a hassle, but instead it simplifies your life. Again, that's what you want. You want to do something that takes your mind off this stuff so that it's taken care of, and you can focus then on signing up those clients for the personal training hustle. So Alex, good luck. Do this now.
It'll help you later. Listeners, if you have a question, sidehustleschool.com/questions. New episode every day, of course. I'm excited to help you and encourage you along the way toward your money-making venture. My name's Chris Guillebeau.
You're listening to Side Hustle School. [Music]
From the Onward Project.
