There are several financial benefits of working from home. And not just for the employee. The employer can benefit too.
I’ve been working from home for several years now since I quit my day job. And my team of three employees is entirely remote. I’ve loved it.
If you’re interested in testing this out for yourself, stick around. I feel like I can give some honest feedback about the financial benefits of working from home (wfh).
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Financial Benefits of Working from Home [for Workers]
1. Lower Car Insurance
That’s right. One of the first things I did once I no longer had a commute was to call my car insurance company and tell them my commute had changed.
With fewer estimated annual miles on your car, they’ll likely lower your premium. This didn’t save a great deal for me. I saved around $10 on my monthly premium payment. My commute wasn’t bad before. But it’s a small savings I’ll gladly take towards more affordable auto insurance.
How much can you save? That depends on how many commuting miles you currently have and how your insurance company responds. Insurance companies are taking notice of the higher number of wfh workers and changing their marketing/pricing.
Here’s a nice insurance article that explains the cost savings of moving to Allstate’s Milewise program, which basically charges you a per-mile rate.
2. Lower Fuel Costs
If you aren’t commuting to an office each day, you can save a lot of money on gas/fuel.
With gas at $3 per gallon, if your car gets 20 miles per gallon and you’re commuting 20 miles a day, you’re spending $3 per day on gas. That’s $15 per week / $780 per year on fuel costs, just for commuting. And I would argue this is a very conservative estimate.
3. Less Wear and Tear
My fuel expense has dropped dramatically but more importantly at the end of the year, I’ll simply have fewer miles of annual use on my car. Since my car is paid off it feels like I could keep it forever now with minimal upkeep.
Fewer tire replacements, repairs, etc.
4. Opportunity to Move to One Car
Because I’m working from home and my wife is at home as well, we could actually consider becoming a one-car family at some point. It would require some sacrifice and planning, but it could be done. Even in “spread-out” Texas.
For some people, this would be a no-brainer to go to one car once they drop the commute. You could simply use one car and pair it with the occasional Uber ride, bike, or public transport.
5. Less Lunch Dining Out Expenses
This is where I’ve noticed the biggest difference. I don’t dine out for lunch anymore. Not necessarily because I don’t want to. I’m just lazy. Going to the kitchen is easier than heading out to eat.
At my old job, I didn’t have my kitchen down the hall. I would have to prepare in advance and bring a meal from home. I was too lazy for that too. So I ended up dining out for lunch a lot.
Now, it’s just not that big of a weekly expense. I maybe do one lunch a week outside the house. I usually pair that with the days I find some free office space at a local restaurant.
6. Fewer Clothing-Related Expenses
Since there’s no formal dress code at home, I haven’t had to purchase any new clothes or spend money on dry cleaning. That’s nice. I always dreaded spending money on clothes. No more khaki pants!
And for women, they’d experience huge savings not having to buy so much make-up, hair product, etc.
6. Tax Deductions
Finally, come tax time next year, I’ll be able to deduct my home office expenses because it’s where I work. There are plenty of other tax deductions for freelancers I’ll be able to take advantage of as well.
7. Other Potential Savings
There are many other potential financial benefits of working from home. One’s we didn’t even mention: not having to pay for childcare or a pet sitter, not having to pay for a commute (such as tolls or parking fees), and how about not having to pay any speeding tickets or fines.
Note: It isn’t all money-saving fun. You can expect some costs to actually go up – utilities, Internet usage, and increased cost associated with having a home office (furniture, etc).
Financial Benefits of Working from Home [for Employers]
As an employer, you can save money too when you’re team is remote. Here are some of the ways we’ve saved.
1. No Office Rent
My team tried having an office space for a while. It was nice having a shared location. But eventually the one employee who was there with me decided to move.
Once she left I tried some less-expensive office locations, but I eventually decided it wasn’t worth. Now we all work from our homes and we have no office rent expense. This saves us $500-$1,500 a month.
2. Less Spending on Perks
Because we aren’t sharing an office I don’t feel any pressure to treat my employees to lunch (either catered or dining out). I also don’t have to worry about the random expenses like coffee or supplies.
3. Access Better Talent for Less
Since we are a remote team now we are not bound by the limits of local talent. We can hire anyone from anywhere. That means we can theoretically tap into better talent for our business.
4. More Productivity
Lastly, and more importantly, employees that work from home are simply more productive (the studies show). They get more done, they are happier, the have fewer absenses, and they stick around longer. Employees are my biggest expense. So if I can have the right team members and keep them happy and working on the business as much and as long as possible, we’ll win as a business.
So those are some of the best financial benefits of working from home that I can think of. I’m sure you have more you could share in the comments.