As the events of the COVID-19 pandemic unfolded throughout 2020, businesses around the globe had to learn how to shift from working in office spaces to working remotely from employees’ homes. The worst of the pandemic is behind us, but many people fell in love with the comfort and convenience that comes from working at home.
Although the crisis initially hit businesses hard, many of them ultimately reaped the benefits of cost savings by eliminating office spaces while their employees worked from home. However, does working from home also save individuals money? Let’s take a look at the legitimate financial benefits that come from working at home.
Why Work from Home?
Even though remote jobs were already increasing in popularity prior to 2020 due to technological advances and restructuring businesses, the ability to work from home became essential for many people throughout 2020 and 2021. For many professions, such as teachers and retail sales associates, the return to normal, in-person working conditions was not only welcomed but also very much desired.
However, for many other professionals who did not work remotely prior to COVID-19 but whose jobs easily converted to working remotely, the feeling at the end of the pandemic was quite different. These employees had spent a lot of time enjoying the real benefits of working from home, and many did not want to return to work in a more traditional workplace.
While these individuals may recognize that working in an office environment can have some benefits — break room conversations and co-worker camaraderie, catered lunches, company-provided office supplies, easier consultations with superiors and co-workers, etc. — they do not believe that the perks outweigh the comfort and convenience of working from home. As a result, many people worked out deals with their employers to continue working remotely.
Many people who have the option to choose may find themselves stuck in the middle. For them, considering another potential advantage of working from home — namely, the savings — may help them decide. So, how much money can you save by working from home? Or do you actually save anything at all?
To evaluate the advantages of remote working, let’s take a detailed look at some of the most common cost savings enjoyed by work-from-home employees. Keep in mind that these savings will vary based on your income, profession, and location. They may also relate to more than just the advantages of working from home. Understanding how you spend your money when you have a job, whether it’s at home or at an office, is an important step in learning how to save money and stay within a budget.
Working from Home May Mean Dining Out Less
Picking up a cup of coffee on your way to work, ordering lunch, or going out for a bite after work with a colleague may feel harmless and affordable, but the costs add up rather quickly if you do these things frequently. If this is one of your habits during the work week, working from home can save you money by leading you to spend less on different types of takeout.
Coffee Costs
Grabbing your favorite brew on the way to work can save you time, especially with the growing availability of mobile ordering, but it certainly does not save you money, and the cost can add up fast. In fact, the average American spends about $12 per visit at coffee chains like Starbucks. By making coffee at home or even just grabbing a cup to-go once a week instead of daily, you could save more than $50 a week.
Lunch Costs
Like coffee, grabbing your own takeout lunch or joining the office takeout order is common among working people. When you’re at home, however, your own refrigerator and pantry are never too far away. Even if you’re too busy to cook a noon meal for yourself while working from home, you can still grab quick snacks like cheese and crackers or hummus and veggies and nibble while you work.
Dishing out personal servings left over from last night’s dinner — rather than buying single-serve containers or getting takeout — is another quick and easy way to enjoy huge savings over time. If you typically only cook for one, buying single-serve items in bulk or cooking in volume to make numerous smaller servings typically costs about half as much as purchasing individual single-serve options.
After-Hours Costs
In addition to the everyday costs of food and coffee, many office workers also find themselves tempted by the appeal of after-hours meals and drinks with colleagues a bit more often than necessary. In addition, when factoring in the daily commute home after working a full day at the office, the temptation to pick up takeout for dinner only increases. Working from home makes it less likely that you will grab a $6 beer or $10 cocktail after hours, and it allows you to take advantage of the food you already have at home rather than spend more money on takeout.
Working from Home May Come with Tax Breaks
Freelancers, self-employed contractors, and full-time employees can often benefit from a variety of tax breaks related to working out of a home office, as long as they meet eligibility requirements. It’s important to note that a full-time employee who is allowed to work from home by their employer may not be eligible for all the same tax breaks as a freelancer who receives no employment benefits from their clients.
Potential tax breaks include:
- Retirement contributions
- Home office deduction
- Healthcare expenses
- Depreciation of equipment (computers, phones, etc.)
Filing taxes can be tricky and complicated, especially if you are in the early stages of working from home. It’s vital to work with a tax professional, to ensure your tax return is accurate and includes all the tax breaks that you are entitled to receive.
Working from Home Can Save Money on Clothing
Closets filled with costly clothing are common for those who work in an office environment, especially if the dress code leans to the more formal side of business attire rather than business casual. Regardless, these clothes get dirty and wear out, which requires trips to the dry cleaners and occasional replacement.
Working from home saves you money on clothing costs, in general. Except for clothing you may need to wear for video conferences, you can wear any clothes you want while you work. This reduces the need to own as many professional pieces, and the clothing should last much longer. In addition, working from home also means spending less — possibly even nothing at all — at the dry cleaners.
Working from Home Reduces Transportation Costs
One of the most obvious benefits of working from home is that it allows employees to save valuable time and money by eliminating commuting. Time has a clear value (more on that later), but the real transportation savings associated with work-from-home life are undeniable and quite appealing. In 2023, the average American is expected to spend $8,466 on commuting costs, regardless of their method of transit. Let’s break those costs down a bit more.
No Gas or Bus Pass
Regardless of the mode of transportation you use to get anywhere — car, bus, subway, ride share — the bottom line is that the less often you do it, the less it costs. Working from home means you won’t have to allocate funds from your budget to pay for commuting fuel or a bus or subway pass. Only paying for personal fuel use means you will spend significantly less on gas.
Car Maintenance Costs
Another benefit of working from home for car-based commuters is reducing the amount necessary to perform regular, mile-based maintenance on your car. Driving less often means more time in between oil changes, tire replacements, and tire rotations. Other car systems, such as your brakes and transmission, will also last longer if you drive less.
Car Insurance Costs
Many people may not realize it, but working from home can have a positive effect on your car insurance cost. Most car insurance rates are based, at least in part, on the total number of miles you drive each year and the total number of miles you commute to work or school each day. Without a commute, you can reduce that number significantly, which may lower your car insurance premiums.
Working from Home Can Reduce the Need for Child and Pet Care
As a working parent (or pet parent), ensuring that your little ones have reliable care while you work is essential. As the pandemic clearly taught us, it is challenging to be both good parents and good workers at the exact same time. While having a young child on your lap while working from home is not productive, some people with older children who are just not old enough to leave alone could save on childcare costs by transitioning to a work-from-home arrangement.
Dog owners who pay for a dog walking service usually pay between $20 to $30 for a 30-minute session, and working from home could eliminate that bill completely. For parents who pay hourly for childcare, working from home could reduce those hours and your weekly rate. Regardless of the monetary savings, the time savings that grow out of working from home means more time spent with the little ones you love.
Bottom Line: Working from Home Means Making More “Real” Money
While it’s tempting to think about working from home as a way to “save” money, the truth is a bit more nuanced. The whole point of working is to “make” money, so it may be helpful to think of working from home as a way to keep more “real” money from your current salary.
Previous expenses for food, clothing, transportation, and child and or pet care are likely to decrease, and you get the bonus of extra time, thanks to the convenience of working out of a home office. Time spent getting ready in the morning, packing lunch, driving to work, and driving home are all part of your “workday” that are uncompensated. When you make the switch to working at home, you not only get more money in the bank, but you get more time back in your day to do the things you enjoy — a very valuable benefit, indeed.
HRCCU Can Help You Meet Your Work-from-Home Financial Goals
If you are thinking about making the switch to working from home, you are not alone. The financial professionals at Hudson River Community Credit Union (HRCCU) are here to help you consider all the financial benefits that you gain as well as help you use those benefits for the future, such as building up your savings account for a rainy day or a large purchase like a car or a home.
Call or stop by one of our branches today to learn more about our online and mobile banking solutions as well as the programs we offer to help set up workers for success at home or at the office.
