Working the same office job from home can save you up to $5,000 a year by eliminating the commuting costs, wardrobe expenses, work lunches, and entitling you to some tax breaks.
The pandemic opened the door to working from home.
Companies that have never offered hybrid or remote working adhered to the new normal. However, as things got back to regular, companies decided to get back to the office.
In a survey conducted by FlexJobs, 36% of the employees working from home said they would quit their jobs if they had to go back to the office.
While not everyone is a fan of remote working, many have reaped some great benefits.
Saving a chunk of money is the most significant advantage of working from home.
Working from home has made employees more engaging and effective too.
Over 50% said they had adopted a healthier work-life balance while working from home. So should you say no when the employers ask you to get back to the office?
If you’re looking to save money, then yes.
How you save money working from home
How do you save money by working from home? Despite the logical expense of not commuting and working in sweats, some hidden benefits help you save money.
This is the number one reason that people choose to work from home.
Commuting is a hassle, whether you’re using public transport, carpooling, or driving to work.
Over 30% of the workforce in America commutes up to 30 minutes one way to or from work, 17% commute for up to an hour.
Of course, you have to do this back and forth 5 times a week, which accumulates to 10 hours a week spent commuting.
When working from home, you can spend those hours to finish work earlier or work overtime for some extra payment.
2. Car maintainance, gas and amortization
Commuting comes at a high price. With gas prices rising, car maintenance, and insurance, the average person spends $2,000 to $5,000 on commuting, car maintenance, gas, and motor oil.
If your workplace is just 15 miles from your house, you’re making a 30-mile roundtrip each day.
We’ll take a 2017 medium-sized sedan as an example.
Your total mileage for the month is 600 miles.
With a good miles per gallon ratio of 50, you’ll need 12 gallons.
At a gas price of $4.20 per gallon of regular fuel, that totals $50.40.
Supposed you’ve paid out the car and have no monthly payments, you’ll need around $100 for maintenance and $5 a month for new tires.
A daily commute of 30 miles with a 2017 sedan will cost you $152.40 a month, or $1,828.80 a year.
Even without a specific dress code, working in an office requires you to spend money on clothes and dry cleaning.
Although, if you have a uniform you can only wear at the office and not as an everyday outfit, you can deduct it from your taxes.
However, if you work without a uniform, you’re not entitled to compensation.
The business casual clothing requires a few pairs of pants, shirts, and blazers.
Keeping your work clothes tidy and repurchasing new ones can cost you over $100 a month.
The average person spends $160 a month on apparel and related costs. Just drycleaning a 2 piece suit will cost you at least $10.
The apparel market suffered a loss of 12.3% as soon as the pandemic hit and people started working from home.
You can easily spend the day in your sweats if you don’t have any meetings when working from home.
4. Less happy hours and take outs
Socialization can eat up your budget.
The office is a dangerous place if you’re looking to stick to your budget.
While some of us have a great time saying no to invites repeatedly, others are not that strong-willed.
Going for cocktails or a beer after work can cost you $3,000 a year, according to Alcohol.org.
And, to be honest, sometimes you’d rather go out with your friends or partner instead of your colleagues.
5. Tax breaks
Here’s something you probably didn’t know until you started working from home.
As a remote worker, you can enjoy some tax breaks.
Despite the basic furnishing and equipping a home office, you can also write off rent for your home office.
Since 2019 you can deduct $5 per square foot up to 300 square feet. However, this is limited to freelancers and self-employed people only.
If you work for a company, you’re entitled to a home office budget for a desk, computer, laptop, chair, etc.
6. Coffee runs
Coffee runs are an excellent way to escape the office for a few minutes or lift yourself up before spending the whole day on your work desk.
This doesn’t necessarily mean you’re craving coffee, but it still costs you a good portion of your daily budget.
Working from home allows you to brew your own coffee, which can be better, tastier, and fresh, for a fraction of the price.
In addition, when working from home, you can escape your office and cuddle your pets instead of running to get coffee.
7. More time for self development
Cutting the hours for commuting or aimlessly sitting in your office even if your job is done results in more free time.
You can finally enroll in the course you’ve always wanted or practice another hobby.
You open the path to a better position or promotion by upgrading yourself.
A happy employee is more productive and engaging.
8. No need of a dog sitter
Taking care of a pet with a full-time job is not easy.
Doggy daycares, dog walkers, and sitters are a must if you spend 10 hours a day working and commuting.
However, these luxuries add up to a hefty amount. By working from home, you’re free to walk your dog before work and during your breaks.
Plus, you’re getting a free workout!
Calculate the cost of working from home
A recent National Bureau of Economic research claimed that working from home actually costs the employees more.
Compared to the housing costs of people returning to the office, remote workers had higher rent or more expensive houses.
Even the money saved from working remotely didn’t cover the difference.
Working from home requires some comfort, depending on your profession. When you set off every morning to work and come home for dinner, it’s hard to reflect on your home’s size and comfort.
But when you spend most of your days at home, you’re not willing to eat, work and sleep in the same room.
Overall, the research shows that higher-income employees tend to splurge on bigger suburban houses.
The prices of these houses have gone up by 20% in the last year only.
Working from home will save you money as long as you adhere to a modest work spot in your current home.
Home vs. Real Office
Is working from home worth a pay cut?
Around 60% of the remote workers said they’re willing to keep working from home for a 10% pay cut even during the current inflation rate.
Another 29% declared they would be leaving their jobs if their employer obligates them to go back to the office.
More and more companies adapted to the hybrid work model due to the high demand for remote work.
This allows the employees to visit the office on their own terms, 2 to 3 days a week, and work remotely the remaining days.
How does working from home save time?
You save time spent commuting, grabbing lunch, and getting ready for work by working from home.
You can save 40 hours or one full work week in just one month.
Do you really save money working from home?
A single person can save $5,000 to $6,000 a year by working from home.
This is done by cutting the money spent commuting, buying work clothes, indulging in happy hours, and ordering lunches at work.
However, working from home might cost you more if you decide to upgrade your home to have a more spacious office.
Do companies save money with remote employees?
Companies save $22,000 per employee working from home full time.
Working from home 50% of the time saves the employer $11,000.
Even with providing the employees with an allowance for home office furnishing, companies still save a lot.
We’re aware that working from home is not a new model, but it got popular during the last 2 years.
As a result, many employees reaped the benefits for the first time and saw the difference, leading to a mass need for a hybrid work model.
The average person saves up to $500 a month by cutting the work-related expenses, which is a significant part of the family budget.
In addition, you get to use your extra free hours for your family or pets.
If you’re unsure of how working from home will affect you, you can try the hybrid model and work remotely 2 or more days a week.
Do you work from home? What would you choose when given the chance?