Working From Home – Is it a Money Saver or Money Loser?

Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!

The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog, Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. You can also follow her on Twitter and Facebook.

Whether you’re thinking of starting your own business or asking your current boss if you can telecommute, there are plenty of things to weigh when considering working from home, such as how well you can work without direct supervision and whether you have the discipline to keep yourself motivated with all your newfound freedom.

But there are also the financial considerations. If you’re seriously considering making the switch to working from home, you’ve (hopefully) already thought about the big things like salary differences and how you’ll get health insurance. (If not, stop right here and do those things, immediately.)

But, as someone who juggles a part-time office job and a part-time freelance business, I can tell you that there’s more to the financial balance sheet than that. 

Here’s a quick list of the ways you may not have considered that working from home can both save you and cost you in the budget department:


Commuting costs. If you take public transit to get to and from work, that’s one level of savings.  But if you drive?  You’ll save in lots of areas: gas, tolls, parking, even the repairs that come as a result of the added wear and tear being put on your car. And if you can get rid of a second car altogether by working from home, you’re also saving on car payments and insurance and registration fees. It can add up quickly!

Food and drinks. How many times do you grab a coffee on the way in to work or go out for lunch because you haven’t had time to make anything at home? How often have you felt pressured to eat out to escape a stressful office or an annoying coworker? And (admit it!) how many times have you guiltily raided the vending machines for a pick-me-up?

When you work from home, you can be more careful about your food spending. You have time to reheat leftovers, make salads and sandwiches from scratch, and keep a pot of Joe warm for whenever you need a lift.

Wardrobe and toiletries. While it’s not recommended that you stay in the same pair of sweats for several days straight, working from home does give you a little more leeway in how you can dress. You’ll still want to have a good outfit or two in the event that you need to do a video conference call or have a face-to-face client meeting—but for the most part, you can wear whatever you want while you’re writing your monthly report, and no one will be any the wiser. So keep a few timeless staples like a suit and a nice button-down shirt with slacks, and you no longer need to worry about continually updating your wardrobe to keep up with the trends. (You’ll also save on dry cleaning costs.)

And ladies? No need to straighten/curl/style your hair and do the full makeup routine every morning, which means you’re spending less on beauty products, too. (It’s up to you if you want to put on a little mascara and lip gloss in case the UPS guy comes to the door, but it’s still minimal compared to your usual routine.)

Child care. If your kids are of the age where they don’t need constant supervision (or you’re a master at getting work done during nap times), you have the potential to save quite a bit on child care costs. If you still need some alone time to concentrate on your work, you might be able to reduce the number of days you pay for child care, only having the kids home some of the time. Even a day or two a week can equal big savings.


Utilities. Now that you’re home all day, no more setting the thermostat program to kick down 10 degrees when you’re at work. (Unless you enjoy working in fingerless gloves and a hat, which is certainly your prerogative.) You’ll also be using more electricity, water, you name it.

The good news is that if you have a dedicated home office—a room (or even just a desk) used for work and only for work—you can claim a percentage of your utility expenses when you file taxes. (You’d calculate the percent of your home’s square footage made up by your office, then calculate that percent of your year’s utility bills.) Still, on a month-to-month basis, be ready for an up tick in this area of your budget.

Equipment costs. If you’ve already got all the tech gear you need to work from home, you’re golden. However, chances are you’re going to need something extra once you start working from home full-time. You may need to upgrade your PC, buy a multifunction printer, or invest in a mic and web cam for video conferencing.

Again, these upgrades can be claimed as deductions as long as the equipment is used used for business—or, if you’re a remote worker for a company, your company may offer you reimbursement options. But you’re still potentially shelling quite a bit out pocket initially.

Taxes. Speaking of taxes, if you’re working from home as a freelancer, business owner, consultant, or any other work that qualifies as self-employment, get ready for your relationship with Uncle Sam to change drastically.

For me personally, as I’ve transitioned from full-time to part-time at my office job, I’ve had to make an extra $1.33 freelancing for every dollar I’ve lost as a corporate employee. This is because the IRS hits me twice on my freelance income, taxing me both as an employer (self employment tax) and an employee (income tax / estimated taxes throughout the year). So every dollar I make freelancing? One-third of it has to be put aside for tax payments. Things can get tricky when you’re first navigating the waters of self-employment, so I’d highly recommend finding a good CPA to walk you through the basics.

How about you all? Do you work from home? What other savings/costs have you noticed that a regular employee wouldn’t experience?

Share your experiences by commenting below!

    ***Photo courtesy of


    1. I'm currently deciding what I want to do. I do think working from home will have it's advantages when it comes to saving money, but I'm just not sure by how much (we don't have kids and my work is currently already pretty close).

      • CordeliaCallsIt says:

        Are you thinking of working from home as a remote worker for your company? In that case, you may not save a ton of money given your circumstances, but can you save time/boost efficiency by being able to work on your own terms rather than dealing with the interruptions, useless meetings, and red tape of being in an office?

        If you're thinking of working from home to work on your own business, can the extra time you have to market yourself and reach out to new clients ultimately translate to more money?

        This particular post focuses on the financial pros and cons of working from home, but don't forget there are countless intangible benefits in terms of productivity, freedom, and scheduling flexibility that you should also consider.
        My recent post Progress Report: Commencing Countdown…

    2. MyFIJourney says:

      We have the option to work from home a couple of days a week. I prefer to stay in the office even if I have to pay for the commute. I think it's better to be seen and I'm usually more productive at work than I am at home.
      My recent post Microsoft (MSFT) Dividend Stock Analysis

      • CordeliaCallsIt says:

        And you're certainly welcome to make that choice. You're lucky to have the option to decide what works bets for you!
        My recent post Progress Report: Commencing Countdown…

    3. moneybeagle says:

      I can work from home occasionally and I am able to stay productive. The biggest reason that I choose not to do so more regularly is because it's difficult with my wife and two young kids around. I find that I'm drawn into what's going on, even if I go somewhere else in the house, especially now that the kids are old enough to know that I'm around and wanting to come find me.
      My recent post Don’t Ever Ask An NFL General Manager For Money Advice

      • CordeliaCallsIt says:

        I can understand that. I have issues, when I work from home, with people wondering why I can't meet them for coffee, come out to lunch, run some errands since I'm “just at home.” (I'm not just at home–I'm working even harder than I do in the office!)

        Like the above commenter, it's definitely a matter of personal preference when it comes down to where you're able to work the most efficiently. Just be thankful that you have the choice to make!
        My recent post Progress Report: Commencing Countdown…

      • Same here, I work from home from time to time and it's great, except for the fact that even a a couple of afternoons or a couple of full days a month can push me over our internet cap. Damn you crappy NZ telecoms!

    4. FrugalRules says:

      We run our own business from our house and you can save a good little amount of money over time. One big savings for us is gas money. We used to fill up our main car once a week and that is down to averaging 1 1/2 times per month. There are a lot of extra costs, but a lot of those do have some nice tax advantages.
      My recent post Is it Time to Get Out of the Stock Market?

      • CordeliaCallsIt says:

        Cars are definitely one of the big savings. I'm actually planning on selling mine when I make the leap to freelancing full-time…I won't need it since I only drive it to work and back right now, and that extra cash would make a nice fall-back fund for the slow months that are bound to occur when I first start out.
        My recent post Progress Report: Commencing Countdown…

    5. I've always managed a team of people, so I have never had the option to work from home permanently. I like the idea, but am afraid I would not be as productive. On the other hand, I can plow through email so much quicker at home than I do in the office because of people dropping by my desk or other issues coming up.

      I think I have come to the conclusion that I have “grass is greener” syndrome on this topic. The few times I work from home, I get bored with no face to face interaction, but during my commute and getting ready in the morning, I wish I could just roll out of bed and start work.

    6. says:

      I'm able to work from home 1-2 days a week. I value the freedom and time saved in not commuting to the office. I don't I would do any more than 2 days per week from home, because I fear my productivity would suffer, but having the option of 1 day per week makes a huge impact on general level of stress and comfort.
      My recent post How to Maximize Dividend Reinvestment

    Speak Your Mind


    CommentLuv badge