How to keep your personal and business finances separate


Setting up and running a business can hamper your personal life and strain relationships. Getting to bed late, missed dinners and extended business trips are all par for the course. It can sometimes be hard to separate the two parts of your life so that both run smoothly. However, one thing that you absolutely must keep separate is your personal and business finances. If they do become entangled, then it can mean seriously bad news for both aspects of your life. Here is how you can prevent them becoming intertwined.

Set up a business bank account

Your first step is to set up a separate bank account for your business finances. If you use the same bank account for both parts of your life you will soon find that money is being used on things that it isn’t meant to. Even worse is if you have a joint bank account with your partner – that means there will be three hands dipping into the account, yours, your partner’s and your business’. In order to make sure that your business has the funds that it needs to operate, you must give it its own bank account where revenues are paid into directly and business costs come out of.

Get a business credit card

Business expenses should not be taken out of your personal credit allowance. Getting a business credit card will help ensure that you keep things separate. If you use a business credit card then anything that goes awry with your business expenses will only affect your business credit rating, not your personal credit rating. The opposite situation, where your personal credit card use affects your business credit rating, can also be prevented with a business credit card. Any sort of credit card debt you incur can be kept safely separate from the other part of your finances. There are good sites that offer if you need it.

Become a limited company

Being a limited company means that you will have . That means that you are only responsible for the amount of capital you invested into the business, so your personal finances beyond this amount will not be sucked into the business should things go badly. Your business will be regarded by the law as being a distinctive entity which is why it is crucial that you keep the finances separate.

Pay yourself a salary

In order to make your business seem more like a business and less like a side gig, you should definitely be . Rather than just dipping into the company account when you want to spend some money, a salary will put you into the right mindset while keeping things separate.


As the saying goes, you should never mix business with pleasure. By following the steps outlined above you will manage to keep your personal and business finances strictly separate.