Don’t Mix Personal and Business Bank Accounts
A lot of early realtors will just start cashing their commission checks or depositing them into their personal bank account. And then they’ll pay all of their licensing fees, and broker fees, and advertising costs out of their personal bank account. So everything is running through one account.
That’s problematic, because from the very first day you started operating as a real estate agent, you started running a real estate business, and that business needs to have its finances and its funds separated from your personal funds. So, for example, if you’ve ever worked a W-2 job, you don’t have access to that business’s cash. The cash that belongs to the business belongs to the business, and you, as an employee, it doesn’t belong to you. So you can’t just go borrow $50 out of the business’s cash to go buy groceries! You have to wait until you get paid. When you have your own business, even if you’re just getting started, you need to have that same separation between the two.
Separate your business from personal, go open a new checking account. It doesn’t have to be what the bank calls a “business checking account”. Banks have a whole suite of products that they put together for small businesses, and one of them is a “business checking account”.
Some banks will charge extra service costs for a business checking account. In that case, I really strongly recommend against opening that business checking account or really even doing business with that bank, because any bank that’s charging a service cost just for the privilege of opening a business checking account is not a good bank. It doesn’t have to be a “business checking account”, at least what the bank calls that, but you need to have a separate bank account that you know is the business’s account. And your commission checks need to go into that account, and your advertising expenses need to come out of that account, and you need to transfer money from that business account into your personal account, for your personal expenses.
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