10 Ways Working From Home Can Save (And Cost) You Big


For several years, I had a full-time job that allowed me to work from home. But then I switched to a job that required me to be in an office. So I've experienced life on both sides, and can tell you that each job had its own impact on not just my lifestyle, but my personal finances.

Working from home allowed me to wear pajama pants in the middle of the day or take afternoon naps without guilt. And in many ways, it allowed me to save some money. But there were some drawbacks on the financial side as well. (See also: 4 Best Jobs for Work Life Balance)

Here are some of the ways that working from home can impact your finances, both positively and negatively.

The Good

Working from home has some pretty amazing financial perks.

1. Zero Commuting Costs

When I worked from home, I put very few miles on my car. My trek to work consisted of a stroll from my bedroom to my home office 100 feet away. Now, I spend more than $150 monthly on public transit costs. My colleagues who drive spend a similar amount in gas and parking. Working from home = no commute = money saved.

2. The Eating Out Temptation Is Eliminated

When you work in an office, you might tell yourself that you'll pack your lunch every day. But that's hard when there are 10 great restaurants and coffee shops around the corner, not to mention all the places on the way to and from the office. You may have colleagues who invite you to lunch or happy hour, and you'll feel tempted to run out to Starbucks for that afternoon caffeine run. When you work from home, going out to eat is less probable.

3. Wardrobe Flexibility

Most office environments have some sort of dress code, and that's going to lead to some expense on your part. Even a casual office environment means you'll have to invest in a few decent shirts, dresses, or slacks. If you work from home, your comfort is your only guide.

4. Taxes

This really only applies to people who are salaried employees who work from home. If you fit that bill, you may be able to save on taxes by getting deductions for things like computer equipment or building a home office. If you can prove that you use a certain percentage of your home for work purposes, you can get a tax deduction based on that percentage of your utility bills. Even some automotive costs could be tax deductible.

5. You Can Argue for a Raise Based on Money Saved

There's a lot of evidence that telework policies save companies money, particularly on real estate costs. Fewer workers in an office means less demand for space. At your next performance review, raise this point when discussing the potential for a raise in pay.

6. You Can Be More Productive

If you were spending an hour commuting in the past, but now work from home, that's an hour that you can give to your employer. Working from home also frees you from various distractions, like co-workers popping in. (But be careful, as working from home can come with distractions of its own.)

7. No Relocation Needed

Many companies have found that it's cheaper to allow employees to work from home rather than spend tens of thousands of dollars to help them relocate to new cities. And imagine the money — not to mention the stress and hassle — saved by the worker who doesn't have to worry about uprooting his or her life. I personally know some employees who live in communities with low cost of living, but are paid based on the salaries of those near the company's offices in a more expensive part of the country. Score! (Of course, be warned that this could also work in reverse.)

The Bad

Despite the perks, there are still ways to burn through money while working from home.

8. Utility Costs Increase

One of the nice things about heading to an office is that you're not using up electricity, heat, or air conditioning during the day at home. Working from home can cause those bills to shoot way up.

9. Home Office Costs Add Up

When I worked from home, I was expected to keep a professional workspace, but was not given any funds to build it. So any costs associated with constructing a home office fell to me. Some of these costs were tax-deductible, but the deduction did not cover the full cost of things like a desk, a decent chair, lamps, and even some office supplies. These expenses can add up.

10. No Networking

Working from home can be socially isolating, but that isolation can also hurt your wallet. If you are removed from an office, you will get less face time with the boss, and may also miss out on office gossip and interactions that might be helpful to you and your career. It's harder to impress your employer if they never see you. If this sounds like you, make an effort to drop by the office for meetings on a regular basis, or even pop in to take a colleague out to lunch. Global Workplace Analytics reported that "teleworkers who maintain regular communications with traditional co-workers and managers find career impact is not an issue."

Do you work from home? What other costs do you incur? Share with us!

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