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Working from Home: Tips for Your Personal Finance

Does working from home affect your personal finance? Yes, it does. Organizations, companies, and businesses are adopting flexible working policies and encouraging employees to work from home. As a result, employees have reported an increase in job satisfaction while companies have seen an increase in productivity (flexjobs, Remote jobs statistics). Perhaps the question you would like answered is, what impact the new normal will have on your finances?

The prevailing assumption is that working remotely means spending less. While this is true for the majority of the workforce, it may not apply to you. In fact, working from home could encourage bad spending habits. Plus, it may result in a pay cut, which would affect your financial standing.

Let's take a look at:

How does working from home affect your personal finance?

The change towards remote working has had numerous benefits for both employers and employees.

  • It offers you a more flexible work schedule.

  • There are fewer office distractions.

  • It allows you to create a custom environment.

  • Employers spend less on a rented workspace and salary costs.

But aside from all that, working from home offers a bit of financial reprieve. How?

The pros

1. You cut on commuting costs.

Commuting to and from work daily in the US can cost you on average between $2,000 or as high as $5,000 annually (Businessinsider, Average spending on commute). Without the daily commute, you can save this amount. Additionally, you do not have to worry about traffic jams, the cost of car repairs, and the cost of gas.

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 takes a significant chunk of your paycheck. Working from home means you can brew your own coffee and make your own meals.

3. Spend less on childcare costs

Working full-time with kids running around the house isn't easy. But once you get a system going, you can do your work and save on child care 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.

The cons

Working from home can help you save a significant amount of money. However, it can affect your personal finance.

1. Higher utility bills and equipment costs

Your finances may 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. This could plunge you right into the 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: Tips for Your Personal Finance

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 your emergency fund. Additionally, you have more time on your hands 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 FIRE movement.

2. Make smart passive income with Honeygain.

Working from home means that you have more time to focus on other aspects of your life. You can focus your energy on creating multiple passive income streams. Likewise, to earn extra money is by downloading our Honeygain app. You get to share your internet connection for extra income.

Honeygain app uses your internet connection as a communication point to collect information from the web. The information is then used by companies and businesses:

  • To improve ad ranking,

  • To test applications

  • To protect their brands and copyright

  • To make price comparisons,

  • And prevent ad fraud

Start generating smart passive income:

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3. Claim tax relief

If you work from home regularly, you can claim tax relief for additional household costs. These can include heating, water bills, home insurance, new broadband connection, and new equipment (laptop or chair). Note that you cannot claim tax relief on items that would have stayed the same regardless of where you worked from e.g. your mortgage or rent.

4. Put your extra money in a fixed deposit.

You could save yourself the temptation of spending by putting money 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.

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 for blogging, running an online store, or becoming a virtual assistant. See more tips to earn money online as you work from home.

6. Check your spending habits.

It is easy to convince yourself that you are saving more than you spend when working from home. As a measure, you should track any increases in utilities and compare them to the amount you save by staying home. Ensure you track all online purchases and even create a spending cap if you need to.

Working from home will ultimately affect your personal finance, 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, become a Honeygainer!

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