Working from Home: Tips for Your Personal Finance
Updated: May 16
Does working from home affect your personal finance? Yes, it does.
More organizations, companies, and businesses are adopting flexible working policies and encouraging employees to work from home every year – and it's especially prevalent during the pandemic. According to Flexjobs, employees report an increase in job satisfaction as a result, while companies notice an increase in productivity. But there might be a question on your mind: what impact will the new normal have on your finances?
The prevailing assumption is that working remotely means spending less. This is true for the majority of the workforce – however, it may not apply to you. In fact, working from home could end in higher utility bills and even encourage bad spending habits. Plus, it may result in a pay cut, which would affect your financial standing.
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How does working from home affect your personal finance?
The change towards remote working has numerous benefits for both employers and employees:
A more flexible work schedule
No time-consuming commute
Fewer office distractions
A chance to create a custom environment
Lower (or none!) office expenses like rent or utilities
However, it's not all roses: working from home has both advantages and disadvantages. Let's break those down, shall we?
1. You cut on commuting costs
Business Insider states that commuting to and from work daily in the US can cost you anywhere from $2,000 a year to $5,000 a year on average. Without the daily commute, you can save this amount up! Moreover, you do not have to worry about traffic jams, car repairs, or permanently overcrowded buses.
2. You spend less on take-out and coffee
Do you always need a coffee boost on your way to work? Or have to eat out because you forgot to pack lunch? The money spent on coffee and lunch sandwiches eats up a significant chunk of your paycheck. Working from home means you can brew your own coffee and make your own meals – which is typically not just cheaper but also way healthier.
3. Spend less on childcare costs
Of course, working full-time with kids running around the house isn't easy. But once you get the system going, you can do your work and save on childcare costs. Even if you need help while working from home, you can limit the number of hours or days your nanny works and save a few dollars.
Working from home can help you save a significant amount of money. However, it can affect your personal finance in a negative way too.
1. Higher utility bills and equipment costs
Your finances will be affected by the increase in household costs. This includes extra money spent on heating, water, electricity, and much more. Additionally, you may have to spend money on a new desk or faster Internet just to keep up with your work.
2. Negative spending habits
Working from home means spending more time on the Internet... which could plunge you right into an online shopping frenzy. Spending time on your favorite shopping websites makes it easier to convince yourself that you need a reward for all your efforts.
Working From Home: Personal Finance Tips
1. Save and invest
Working in your pajamas could give you a false sense of security and comfort – don't forget that you still have personal finance goals! Since you are ultimately saving on certain costs, you can put the money into a savings account or build an emergency fund. Additionally, due to a non-existant commute, you have more time on your hands: use it to research various investment options, and start earning extra money!
If you want to learn more about how you can improve your personal finances, you might be interested in the FIRE movement. Luckily, we have a whole article about it!
2. Make smart passive income with Honeygain
Working from home means you have more time to focus on other aspects of your life. Focus your energy on creating multiple passive income streams – for example, look into the opportunity to earn extra money by running the Honeygain app.
Honeygain uses your Internet connection as a communication point to collect publicly available information from the web, while keeping your private data completely safe. The information is then used by companies and businesses to:
Improve ad ranking
Protect their brands and copyrights
Prevent ad fraud
...and a lot more!
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3. Claim tax relief
If you work from home regularly, some countries allow you to claim tax relief for additional household costs. These can include heating, water bills, home insurance, new broadband connection, or new equipment (e.g., laptop or chair). Note that you cannot claim tax relief on expenses that aren't affected by changes in your work location, such as your mortgage or rent!
4. Put extra money in a fixed deposit
You could save yourself the temptation of spending your money by putting it into a fixed deposit account. A fixed deposit is the sum of money you keep with a bank as a deposit for a fixed period against which the bank pays you a fixed rate of interest. It's a great way of making some smart passive income: you won't make a fortune... but you also won't do anything.
5. Take on additional online jobs
If your job is not very demanding, you could take up an online job. You could use freelance websites and e-commerce sites to supplement your income. You can do anything from blogging or running an online store to becoming a virtual assistant. See more tips on how to earn money online as you work from home in this blog post!
6. Check your spending habits
It is easy to convince yourself that you are saving more than you spend when working from home... However, it's not always the case. It's better to stay safe than sorry: try tracking the increases in your utility bills and compare them to the amount you save by staying home. Ensure you track all online purchases, and create a spending cap if you need to.
Working from home will ultimately affect your personal finances, but it doesn’t have to be a bad thing. With proper planning, you can limit your expenses, grow your savings, and make some smart passive income.
If you want to join millions of people working from home and making extra money effortlessly on the side, become a Honeygainer – and don't forget to enter the 'sweetmoney' coupon code as you register to get $5 into your Honeygain account straight away!👇