5 ways working from home can save you $6,000 or more annually

Jan18 Retirement Fb

New research from FlexJobs, which specializes in remote work, has found that the average person can save up to $6,000 working from home part time and up to $12,000 per year by working remotely full time!

Cost of living and inflation are top financial pressures for today’s workers. More than half (52%) of Americans reported they are worried about maintaining their standard of living, with a third citing inflation as the top financial problem facing their family. 

Fortunately for remote employees, working from home equals financial savings. To demonstrate how remote working can help cut down on costs, here are five ways working from home can save up to $12,000, and six quick tips for maximizing remote work savings.

5 ways remote workers save thousands of dollars

  1. Commuting

The cost of gas has skyrocketed. The average commuter spends between $3,000 and $15,000 on transportation costs a year, with the average commuter traveling about 39 miles per day and some people commuting much more. If someone works from home even two days a week, they’ll spend $756 a year, saving $432. Driving less than 5,000 miles a year for work could qualify for a lower insurance rate. This will depend on the total annual mileage, but not commuting to work will help lower mileage, which could result in a cheaper insurance rate. Further, in 2019, people who relied on public transportation spent, on average, between $700 and $1,900 annually on transportation costs. While significantly less expensive than commuting via car, public transit still costs money.

  1. Clothes

In 2020, the average household spent $1,434 a year on “apparel and services,” meaning buying clothing and keeping it clean. In 2021, a worker could expect to pay these average amounts for dry cleaning:

  • Suit: $10 to $15;
  • Dress: $10 to $18;
  • Pants: $5 to $8;
  • Skirt: $4 to $14;
  • Coat: $12 to $25; and
  • Shirt: $2 to $4.
  1. Food

In 2021, the average household spent $359 on “food away from home” each month. However, eating at home is usually healthier and cheaper. When working at home, it’s easier to pick the foods you like and avoid the ones you dislike.

  1. Tax breaks

As a freelancer or self-employed worker, there are tax breaks you’re likely eligible for. If a full-time employee works remotely — either all or some of the time — they may also be entitled to some tax breaks, but not necessarily the same as a freelancer would. Tax breaks can include:

  • Home office deduction;
  • Health care expenses;
  • Pass-through deduction;
  • Retirement contributions; and
  • Depreciation of equipment.
  1. “Real salary”

Consider the time spent commuting as part of the total workday. In 2019, the average worker spent 27.6 minutes commuting one way, or 55.2 minutes round trip. By working from home, the average former commuter could spend up to 264 fewer hours annually on a work-related activity, or about 33 fewer eight-hour workdays every year. That’s about $8,700 annually based on national salary averages.

6 tips for maximizing remote work savings

  1. Cut down on clothing budgets — The right clothes can boost productivity. Consider business casual clothing or jeans and a nice shirt for Zoom meetings, which are comfortable and help workers spend less by eliminating costly dry-cleaning bills.
  1. Stock the kitchen— Running out to grab lunch from an office or from home can be costly and often unhealthy. Take advantage of the ability to stock the fridge with nutritious foods and consider making an extra helping of dinner the night before for ready-to-heat leftovers. Don’t forget to furnish home coffee stations to avoid an expensive coffee run.
  1. Furnish your home office thoughtfully— Search local listings and join local groups on social media where members often give away office equipment they no longer want or need. For tech expenses, keep costs down by investing in good equipment that can be used for years — but that won’t break the bank either.
  1. Manage the temperature— Adjust blinds, open and shut windows, wear layered clothing, relocate as needed (hot air rises), and consider a fan or a space heater to regulate the temperature in an individual work area, rather than cooling or heating the whole house.
  1. Get steps in — outside— Instead of spending money on a gym membership, build physical activity into each day. Take a walk around the neighborhood or turn on your favorite yoga channel during scheduled breaks.
  1. Track work-related expenses— Pay attention to the specifics involved in claiming home office deductions and keep receipts for job-related expenses organized. Set reminders to submit expenses on time so they don’t get lost or forgotten, and put receipts in an electronic folder so they’re ready to back up any business expense claims when it comes time to file taxes.

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