Working from home has a lot of benefits and it can certainly save us money. Today at the Desired Desk, we’ll explore many practical ways to maximize our work from home lifestyle and hold onto those hard-earned dollars.
Changing the “normal” way we do things can have a significant impact on our cashflow. By organizing our lives in the right way, we can accomplish our goals, find financial freedom, and enjoy the journey more.
Save Money on Transportation
Expenditures that go into transportation may outweigh nearly every other category we discuss. There are car repairs, tire rotations, normal wear & tear maintenance, oil changes, and a whole myriad of other commuting costs.
Similarly there are car payments, fuel costs, tolls, parking fees, tag fees, tickets, auto insurance, and the like.
Now that many of us are driving a lot less, we can minimize or even eliminate many these costly spending habits. Some people are finding that they may even have lower car insurance premiums now that they work from home. Be sure to call your insurance provider to see if you qualify.
If your household has two or more vehicles, there may exist the option to eliminate one of those vehicles, if at least one person works from home.
Couples can down-size to only one car and eliminate an extra car payment. If you live in a city with good public transportation, you may be able sell all your vehicles and save even more money.
On average, people can spend $10,000 – $20,000 a year on vehicle ownership.
Getting rid of extra vehicles doesn’t sound so crazy now, right?! What if you could entirely forgo multiple large car payments?! How much money would you save? What would you do with all that extra cash?
Save Money on Lunch
One of the best things about working from home is that we may spend less on lunch and we tend to eat out less. We are also avoiding the extra spending we used to do while commuting to and from the corporate office.
While working at home we avoid costly purchases, especially around lunch time, because we have everything we need at home. When we do go out it may be more deliberate and intentional.
At home, we are not as tempted to eat junk food on the go or indulge in stress eating purchases based upon time constraints. At home, we simply have more time to eat well.
When we work in the corporate office it’s easy to spend north of $15 – $25 per day on coffees, on-the-go lunches, snacks, and other comforting impulse buys; purchases we used to make in order to cope with the stress of the corporate environment.
Now that we work from home we can lower that to about $5 per day if we plan our lunch meals economically. Saving money at lunch-time can easily put $400 back into our pocket, per month.
Save Money on Shopping and Household Expenses
What is the real cost of working in a corporate office? When we work at the office we have to look and dress our best. Professional attire can be expensive and costly to maintain.
There is dry cleaning, shoe repair, increased laundry costs, work bag and briefcase replacements, cosmetics purchases, and the like.
It’s not hard to end up spending hundreds if not thousands of dollars on a professional business class wardrobe.
- Cosmetics: $500 per year
- Shoes: $200 per year or more
- Dry Cleaning, Maintenance, and Repair: $1,080 or more per year
- New Purchases: $400 or more per year
A professional wardrobe can cost around $2,180 annually.
Now that we work from home it is easy to put the business suits away, reserve them for client meetings, and enjoy comfy house pants, the rest of the time.
Plus, now that we’re not washing clothes all the time, we will save on water utilities and detergent costs as well.
Other Miscellaneous Savings
Hired Help: Another way to save money in is the daycare arena. It’s easy to rack up $400 – $600 per child, per month. Yikes! Not to mention pet daycare.
Health: Now that we are at home and hopefully more active, we should see an improvement in our overall health. We can be more active and take more frequent breaks.
Medical: We should be able to see a reduction in medical bills, medication usage, and other health-related expenditures.
Commute: After all, we are gaining an extra ten hours from commute time, per week on average. That’s two fewer hours of being sedentary per day.
Plus the likelihood of car accidents, inclement weather hazards, and other road-related dangers is significantly reduced in probability.
Basically, when it’s dangerous outside, we can stay in & work from home.
Employees Vs Freelancers and Entrepreneurs
Employees will see some savings, but not as much as those that work for themselves.
Since 2018 employees are no longer allowed to have work-related tax deductions.
On the bright side however, some employees may receive extra reimbursement in addition to their regular wage. Many employers provide reimbursements to offset any home office-related expenses.
This can include free computers and other office related tools needed to work remotely.
In your home office, there may be extra costs like ink, extra bandwidth, and office supplies, so it’s nice that some companies are reimbursing their employees.
Save Money on Your Taxes While Working at Home
In addition to everything we mentioned above, there may be significant tax breaks available for those who work from home, as freelancers and small business owners. Outlined below are just some of the things you may be able to deduct.
- Phone & Internet
- Car Repairs, Mileage, and Gas
- Lunch with Clients
- Business Meetings
- Education & Seminars
- Mortgage & Real Estate Taxes
- Interest on Business Related Loans
- Retirement Plans
- Business Insurance
- Office Supplies
- Administrative Fees
- Business Related Downloads – Stock Photos, Fonts, etc.
- Payment Processing Fees
- Home Repairs
- Subscriptions – MS Office, Adobe Design Programs, Photo Editing, and Other Business Software
- Business Marketing & Advertising: Business cards, flyers, ad campaigns, etc.
- Employee Pay
Talk with your tax person about some of the deductions you may be eligible for.
Sometimes the whole or part of an expense may be deductible. Individuals that work for themselves can write off these extra expenses as the cost of doing business. As always, consult with your tax professional for more details.
The Greatest Savings of All
One of the best reasons to work from home is all the savings you will accrue. Those that make a living from their small home office can expect to save anywhere from $4,000 – $30,000 per year.
The biggest perk and truest savings of all are that we get the extra time. We have more time for our family and our loved ones. There is time to exercise more and prepare nutritious food. We even get to have more time for ourselves.