Balancing Your Personal and Business Financials l CompareCredit
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Business or Pleasure? How to Manage Finances & Credit Cards for Both.


Reviewed by Tanza Loudenback

When you’re starting a new business, it’s always a balancing act. You might still have a full-time job, or you might be splitting time between your new venture and a part-time consulting gig. Either way, you have to figure out what business expenses are absolutely necessary to get started while still making sure you can pay your personal monthly bills. In any case, one of the most important things to do is to decide where your personal expenses end, and your business expenses begin. 

Depending on the size of your business - and how fast it’s growing - you might want to apply for a business credit card. In other cases, if you’re mostly focused on your business expenses as a side hustle, a personal credit card can work. Here are three things that you should consider when trying to manage finances and find the right credit card for business expenses while still juggling personal expenses:

Standardize How You Calculate Your Expenses.

If you’ve just started a business, you’ve probably thought about your business plan. But what about your personal expenses? Most people don’t exactly crack out the spreadsheet to keep track of how they’re spending things in their personal lives.

But if you already have a way to calculate and track your business expenses, it’s smart to do the same thing for your personal expenses - especially if you’re withdrawing from the same bank. There are both apps and spreadsheet templates that can help you get started here. Once you’re using the system to calculate both personal and business expenses, you can at least have a clearer view of how much money you have coming in and out of your bank each month.

This should start with your essentials, like rent, utilities, groceries, and any loan or debt payments. Then, use the spreadsheet to distribute your business and personal expenses accordingly.

Make Your Credit Card Work for You.

Business credit cards, like personal credit cards, offer rewards that can help you get cash back on big purchases. However, if you value points for things like groceries and travel, then you should research which options work best for your business plan and your personal lifestyle overall.

Dividing expenses by different cards can be an easy way to keep track of exactly how much you’re spending, but it can also dilute the rewards you get. By researching the benefits of different personal and business credit cards, you can find the perfect ones for your goal.

Low-interest and no-fee business credit cards are key here, especially if you’re boot-strapping your business.

Set Your Personal & Business Goals.

Are you saving up to buy a house? Want to hit a thousand sales by the end of the year?

With a budget in place and the right business credit card, the next step is to clearly outline both your personal and business goals right where you can see them. This is crucial, because you want to make sure that you have a line of sight from where you are today and where you want to be in the next year.

Make sure to think through the roadmap and set milestones that you want to achieve for your goals. If you’re keeping track of everything in one place, then you can easily see your progress throughout the year both for your business and your personal milestones.

The Balancing Act for Business & Personal

Your personal and business expenses can benefit from the right credit card, but it’s up to you to take a holistic look at what you really need. If you’ve got a lot of upfront investments for your business coming up, then a business credit card with low or no interest for the first year can keep your personal expenses balanced as you launch your business. If you’d rather keep your personal credit card and use it for the necessities, there’s also an option to split your expenses right down the middle.

Whatever you choose, make sure that you’re constantly updating your budget and your expenses. When you can clearly see how both your personal lifestyle and business plan are working together - or not working together - you can be sure to reach your goals for both.

Thomas Donaldson is CompareCredit.com's credit card expert. His work has been featured by USA Today, NBC News, Business Insider and many more.

Tanza Loudenback is a CFP® certificant, writer, and editor. From 2015 to 2021, she was a top-read author and editor at Business Insider. Her work focuses on helping people make smart decisions with their money and is published by a variety of online publications. Full Bio

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