Q&A: "Help, my bank said I can't open a business account!"

When it comes to money recommendations, I recommend you do a couple things. Don't forget to set aside money for taxes, for example. What else? Oh, keep your business finances separate from your personal accounts!

So how do you do that? Well, ideally you need a separate bank account. This isn't usually that hard and it should be free or close to free. There also isn't usually much red tape or hoop-jumping you need to do to open this account at most banks or credit unions. But a listener has encountered a problem—their bank won't let them!

I thought it would be a good idea to have a separate business account for my side hustle, but I ran into a problem when I went to the bank. After waiting nearly an hour to talk to someone, they said that I didn't qualify because my business wasn't registered properly. I thought you don't need a license for most simple businesses like mine!

Now I'm annoyed at the bank but also a little worried that I've been doing something wrong. Have you heard of this happening before?

Short version of my answer: try again, with a different bank. Obviously the laws can vary depending on your jurisdiction: country, state or province, maybe even county or city, but for most of our listeners in most places, it shouldn't be that difficult. If you do need to be registered with the state or province (that's the most likely), that's typically something that can be done online for less than $100, and sometimes free.

If you really are unable to open a different account at first, use a spreadsheet or bookkeeping software to make sure you keep up with business expenses and sales separate from your personal funds. But if you're like me and not super into bookkeeping, having a separate account will help so much.

Listen to today's episode to learn more...