How to Separate Business and Personal Expenses (Even if You’re a Solo Consultant)

When you're a solo consultant, your personal and professional lives tend to blend together—client meetings at coffee shops, late-night brainstorming sessions at your kitchen table, and receipts in every pocket. But when it comes to your finances, mixing business and personal expenses can create confusion, headaches, and even IRS red flags.

Fortunately, you don’t need a team or a finance degree to draw a clear line between the two. Here’s how to keep your business expenses clean, organized, and totally separate.

1. Open a Dedicated Business Bank Account

Even if you're a sole proprietor, opening a business checking account is a game-changer. Run all income and expenses for your consulting work through this account.

Why it matters:

• It creates a clear audit trail

• It saves time during tax season

• It helps you see how your business is actually performing

Bonus tip: Open a separate business savings account, too. Use it to stash away money for taxes or bigger business investments.

2. Get a Business Credit Card (and Use It!)

Apply for a credit card that you’ll use only for business purchases. Even something simple—like a low-limit card with rewards—can make a big difference.

Use this card for:

• Software subscriptions (like Canva or Zoom)

• Travel for client work

• Office supplies and equipment

• Courses or training related to your services

3. Avoid “Just This Once” Purchases

Buying printer paper while grocery shopping? Think twice. When you start mixing business expenses with personal errands, it muddies the waters.

Instead:

• Use your business card for business purchases—even if it’s less convenient in the moment.

• Keep personal cards for personal purchases only.

That habit alone can prevent a pile of confusion at tax time.

4. Label and Categorize Everything in Your Bookkeeping Software

If you use QuickBooks, Wave, FreshBooks, Sage, or another tool, make sure you're categorizing each expense properly. Set up rules that automatically assign recurring charges to the right categories.

For example:

• Zoom → Software Subscriptions

• Canva → Marketing

• Dropbox → Office/Cloud Storage

You can also add notes to transactions for extra clarity.

5. Pay Yourself the Right Way

Don’t treat your business like an ATM. Instead, make a habit of transferring a set amount (your "owner’s draw" or salary) from your business account to your personal account on a regular schedule.

This makes it clear:

• What the business earned

• What you took home

• What the business can afford to reinvest

6. Hire a Bookkeeper (If You're Too Busy to Keep Up)

If you’re only checking in on your finances once a month (or less), you might find yourself staring at a confusing dashboard, unsure what’s what.

Bookkeepers like me are in these systems daily. We keep everything clean, categorized, and ready for taxes—so you can focus on growing your consulting work, not decoding last month’s expenses.

Final Thought

You don’t need to be a financial wizard to get this right. By setting up just a few good habits, you can protect your business, prep for tax season with ease, and finally know where your money’s going.

Need help untangling your finances? Let’s make it simple together—book your free discovery call today.