Save yourself the trouble. Set up a bank account for your blog or podcast early on in the process. The accounting mess of managing the finances within your personal account isn’t worth the trouble. This is especially true when there are online business banks that make the process smooth.
I did it for about two years. My blog hosting and domain expenses were coming out of my personal checking account. It was a hobby and it made sense to me that a hobby should be a personal expense. Why would you set up a business account for every hobby you enjoy? (That would be a lot of accounts in my case.)
The problem was that I intended to earn an income from my blog someday. And although I knew it would be a long time coming, I was aware of the need to start writing and let it grow. I was also aware that I would have many expenses going out before I had any decent revenue coming in. But I knew it was something I would do long-term and to which I wanted to make a commitment.
The trouble started when I earned my first few dollars. They went into my personal account as well. Where else would they go?
You see the issue, right? As soon as my first dollar of revenue existed, I wanted to start tracking how much profit I was making. But to do that, I needed to sort through personal transactions and business transactions to pull it together.
And although this is something you can do, it’s messy. And it creates quite a bit of extra work, which is the last thing you want with a passion project.
So I set up a business checking account at my local bank. But that meant registering an LLC with the state and setting up an Assumed Name since I was the sole operator. Once I had those documents, filled out all the paperwork (real paper by the way), and confirmed I wouldn’t be collecting money through an ATM, I received approval for the account.
About two weeks later I received the account numbers and a card. And then I was ready to begin transactions in my new business checking account. It felt amazing!
But here’s the thing: I put off setting up an account for almost a year.
It was too much work to do and I knew it would be before I ever started. And it seemed unnecessary given the small amount of money I was working with at the time.
Since then, I’ve switched to an online-only business bank. I found that I never went into the local bank and when I did it was because they couldn’t understand why I was transferring money to contractors around the world and I needed to spend an hour explaining it to them. So I decided to say good-bye and move to a group that understands the world of online transactions, Novo.
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In the beginning, you only need a card, account numbers, and the ability to connect your bank to a couple of key services. And you don’t necessarily need to set up an LLC right away. But that all depends on what you’re doing. (Seek advice on this one. I’m no lawyer.)
Your expenses are likely limited to website hosting and a domain. You might have one or two other services you use to host podcast files and such, but that’s it. So you want it to be super simple to set up an account.
That’s where Novo comes in. You get a business checking account without the need for official business documents. It has all the FDIC Insurance, ATM fee refunds, and mobile apps that I would expect in an online bank. But the part that I’ve come to love about it is that it just works. I don’t have the headaches that come with my local bank not understanding online business.
I have to admit that I’m quite jealous of anyone starting a new blog or podcast right now. From a purely financial stance, it’s a lot easier to keep things clean and organized. If it had been this easy to set up a business account when I was starting out, I would have done it immediately.
And that’s my recommendation to you. If you are just starting and you intend to earn money from your passion project, go set up an account at Novo at the beginning. It’ll make your life significantly easier in the long run.
Did I mention their cards look sharp, too?