Don’t Let Your Personal and Gig Income Touch

Uber, DoorDash, Lyft, and really all gig apps offer their own “bank” or debit card that allows you to get your income right away and separates your gig income from your personal income.

Regardless of whether you use those or not, it’s a good idea to keep your gig or business income separate from your personal income.

Why does it make sense to keep your finances separate?

How can you do it?

And how can you get “business income” into your personal account to pay “real” bills?

Why Separate Your Gig Income From Personal

The important thing to realize is that though this may be a side hustle or something you’re doing for now, it still means that you are a business owner.

As such, you need to treat it as a business with your expenses and income.

Budget Your Business Expenses Better

As a business, you need to be a profitable one or you won’t be in business long. You’re expenses are maintenance on your car, gas, and anything else that you use for work.

So, spend your business income on that before you pay yourself.

This will give you an amount you can spend on gas, maintenance, etc., but also do something else that most of us probably don’t think about.

Test to See If Your Really Profitable

Are you actually making money with gig work?

If you use the business income to pay expenses first, including saving for taxes and maintenance, and there is money left in the account to use for personal expenses, that means you’re business is actually making money.

This is not a way to tell how much profit you’ve made, how much you make per hour, or if it’s worth it to continue to drive the way you are; it simply tells you if you are in the red or black when it comes to making money.

Protects You Legally, Kinda

The final benefit is that it can potentially protect you legally and come tax time.

I’m not a legal or tax expert, but I’ve spoken to both and have been told that keeping your business expenses separate allows you to take certain deductions and protections.

As a gig worker, it’s unlikely that you will have any legal issues. However, in that rare instance when it does arise, you’ll be so very glad you spent a little bit of time to keep things separate.

How to Keep Your Gig And Personal Finances From Touching

Put very, very simply, the way to keep your gig and personal income separate is to have two different accounts.

Though you could have more than one account, or even follow the Profit First accounting method and have five or more, having at least one for business helps with all the things we’ve already talked about.

Set Up Another Personal Account

The easiest way to have a separate account is to use one of the banks that Uber or DoorDash. You could also use a bank like Ally, a credit union, or anywhere else.

It does not have to be a business account, it could be a personal account, as long as you aren’t using it for personal expenses.

Get a Business Checking Account

The other option is to get an actual business account. This will require that you have your business actually registered with an LLC, S Corp, or similar.

These accounts come with additional options, like business funding, or even some networking options if you are trying to do more than gig work in the long term.

How To Get Your Money

At the end of the day, the main purpose of anything we do is for us to pay our bills.

Regardless if that’s rent, groceries, paying down debt, or saving for that vacation, we need to have a way to turn business money into personal money.

So, how can we do that?

Write Yourself a Check

Depending on the type of account you have, there are several ways you can do it. First, you can write yourself a check from the business to yourself.

This would be like when an employer pays you an income from the work you’ve done the last week or two.

Most of us have direct deposit set up now.

To have what feels like that, you can use Apple Pay, Google Pay, Venmo, Zelle, etc., with your pay.

That is the same as writing a check to yourself, but you get the money a lot fast,er most of the time, and don’t even have to leave your house.

Is It Worth It?

This is more work than just mixing your income like you normally would. And for most people, it’s probably fine to mix their income, they will never run into an issue.

Once you have it set up, it isn’t that much more complicated and could potentially save you a lot of issues down the road.

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