Whether you’re running your own business out of your house, or are allowed by an employer to telecommute, there are a number of key advantages and perks that come with working from home – with cost savings near the top of the list.
4 Ways You Save Money Working From Home
Working from home used to be something that was strange and uncommon. In fact, the notion of working from home came with an air of illegitimacy in many industries. However, times have changed and working from home – whether as a self-employed individual or W-2 employee – is now quite normal. It has benefits for everyone involved.
As Fundera explains, “Full-time telecommuters save more than $4,000 each year by spending less on a variety of costs: commuting costs (gas, public transit passes, tolls, parking, car upkeep, and so on), food costs (buying coffee and lunches out of the office), tax breaks, and professional clothing upkeep.”
Let’s dig a little deeper and highlight some of the specific ways you may save money by working from home.
1. Gas
One of the more obvious savings comes in the form of gas. Working from home means no daily commute back and forth to the office, which can represent a serious chunk of change for some people.
Let’s say, for example, that you generally drive 12 miles to work per day (24 miles round trip) in a vehicle that gets 30 miles per gallon. That comes out to roughly 6,000 miles per year after accounting for some days off. With an average gas price of $2.50, that would come out to $500 per year in gas. When gas prices are higher, that figure can become significantly higher.
2. Car Maintenance
Putting an extra 6,000 miles of wear and tear on your car per year also increases the amount of maintenance you need. Not only does it force you to change your oil and fluids more frequently, but it also decreases the amount of time between tire replacements, speeds up vehicle depreciation, and could possibly increase insurance prices.
3. Eating Out
When you work outside of the home, the most convenient option for lunch is usually to grab something from a fast food restaurant. While inexpensive on any given day, the costs can add up significantly over the course of a year. Even eating one $6 meal per day will cost around $1,400 per year.
When you work from home, you have the opportunity to eat leftovers, make an inexpensive sandwich, or prepare cheap meals in bulk. While this isn’t free, it is significantly cheaper than eating out every single day.
4. Home Office Deduction
When working from home, you may have the opportunity to claim a home office deduction on your taxes. There are a couple of different methods for calculating this deduction. The regular method involves a lot of complicated math in which you calculate what percentage of various home utilities are used on work-related activities. The simplified method just takes the square footage of the office and multiples it by $5. So for a 10’x10’ office, the deduction would be $500.
Balancing the Pros and Cons
While this article has certainly focused on the financial benefits of working from home, don’t make your decision to work remotely based on these factors alone. There are lots of pros and cons associated with such a work setup and you would be wise to take them all into account before determining whether it’s right for you.
Many people find that it’s best to spend some time working from home and some time working in a traditional office setup.
