Why you need a business savings account

Greetings, Training for Translators subscribers! Here’s what’s up from T4T this week! 

This month’s classes are open for registration

• Free webinar next Tuesday (November 11), Getting Started as a Freelance Interpreter, focusing on business skills for interpreters, and how to get started with interpreting if you’re interested 
• There are a few spots left in the upcoming session of Direct client research lab
• Breaking Into the Subtitling Market, with guest instructor Molly Yurick, a four-week version of Molly’s popular webinar on the same topic, kicks off on November 24! 

This week’s topic: Why you need a business savings account

I have a few hot-button topics when it comes to freelance money management (here’s a blog post on that topic in general), and two of the biggies are:

• Completely separating your business and personal finances 
• Establishing a business savings account 

The business savings account serves so many purposes:

• You should never be caught short on money to pay your self-employment tax
• You can use the savings fund to jump on a good opportunity (I did this for my Master of Conference Interpreting tuition in 2020-2021)
• It can serve as a paid vacation fund, allowing you to take time off so that you don’t burn out 

And, the business savings account can really bail you out when you have a catastrophic computer failure. Danielle, a T4T newsletter reader, sent me a message that exemplifies how the business savings account can, well, save you. Here’s Danielle’s message, included here with her permission:

“You know how you advise everyone to have a business savings account? I started one last year. Well, on Tuesday, I opened my laptop and heard a crunching sound. A hinge had broken, which made the monitor frame start to detach from the screen. I can’t close the lid anymore or parts will start falling off. Since I had the business savings, I had a new computer ordered 20 minutes later, and it’s arriving today. If you need to convince anyone to start a savings plan, feel free to use this story! ” 

I often say, in life in general and certainly in our freelance businesses, money doesn’t buy you happiness, but money sure buys you options. This catastrophic computer failure, which is far from a rare event in a freelancer’s life (I had a computer go Blue Screen of Death a number of years ago), could have been a true disaster in Danielle’s business. If your computer dies and you can’t afford a new one, you have to either put your business on hold, or put the new computer on a credit card without having the money to pay for it (which brings up another finance truth: for many people, their credit card is the emergency fund). But because Danielle started a business savings account a year ago, she simply ordered a new computer, had it shipped as fast as possible, and moved on with her work. 

I love this story because it exemplifies good freelance financial planning, and the end result: good financial planning keeps you from going into panic mode when something goes wrong, because you have the money to pay for it. Thanks to Danielle for sharing this story, and if you don’t have a business savings account, start one today; even if you start with $25 out of every project, it will add up!

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