Private account comparison and the 2-account method
If you were the owner of a store, you would never think of taking money from the store cash register to buy a new sweater. The money in the cash register belongs to your store, and you buy the new sweater with your own money.
But that is exactly what we musicians do all the time. Most of them simply have an account where the various salaries (often several music schools and salaries from projects with several orchestras) are paid into. And from this money you pay for your food, your clothes, Christmas presents for your loved ones, etc., but also your music sheets, the repairs or revisions of your instrument, the strings, reeds and so on.
It is almost impossible to determine whether you had a good “business year” or whether you saved a lot in your private life. You hardly have an overview of your finances.
Therefore we recommend that you have two different accounts. One for business and one for private. We have selected the most favorable account offers for you here. Usually the cheapest offers are the so-called “private accounts/salary accounts”. In most fee schedules, the fees for business accounts are much higher than for private accounts. However, as a sole proprietorship or self-employed person, you are usually allowed to have a “private account/salary account” for your business income and expenses, as long as the bank’s terms and conditions do not explicitly exclude business use of the account. In addition, you can always set up another “private account/salary account” for your private purposes. You could then transfer you a fixed salary to this account.
PRIVATE ACCOUNT COMPARISON
Not in our comparison: Special offers for young people/students as well as cantonal banks and Raiffeisen, because the offers can vary depending on the location. Furthermore, UBS and CLER had not answered us, the listed conditions correspond to the information available online.
ADVANTAGES OF THE 2-ACCOUNT METHOD:
- Better overview of your finances (private and business)
- Clean separation between private and business payment transactions (income and expenses)
- You can set a fixed salary and pay out the same amount every month to your private account (just like most “normal” people have).
- The sorting of the documents and your accounting is much clearer, and filling your tax forms is much easier
- The risk of inadvertently touching reserves for private or business expenses is significantly lower
- You can finally save on your private account, e.g. for a vacation
- You can finally “make a profit” with your business, for example if you had many projects
- You can build business assets. To do so, the fixed salary you pay out to yourself must be significantly lower than your average income. Why does it make sense for your business to build up business assets and invest reserves? If three students suddenly drop out in one semester or you suddenly have few concerts because a strange virus turns everything upside down, you might be able to continue to pay you the same salary during those few months when your business earns less.
This newsletter only contains general information and should not be used for specific questions. In particular, the information provided is not intended to replace professional advice. We do not assume any liability for the correctness of the contents listed here. Although the information is checked for accuracy and timeliness, to the extent permitted by law, we disclaim all liability for any undesirable consequences arising from the use of this information.