Working From Home Saves Me Thousands Every Year (10 Ways You Save Money When Working From Home)


There are numerous benefits of working from home, from higher productivity to lower commuting time. But there is some other very important benefit, that often is overlooked: How much money you can save every year by working from home?

Working from home saves me thousands every year. There are numerously hidden and obvious costs regarding working in an office and commuting. Working from home helps you to save thousands on transportation (gas, car maintenance, public transport pass), coffee, lunch, professional attire (including dry cleaning), child care, and even reducing the cost of free time.

If you are allowed to work remotely or you are a freelancer, working from home can help you in eliminating all of the unnecessary expenses, and at the same time improve your wellbeing and health. On the other hand, you might have some additional expenses while working from home, that have not been there before.

According to different researches, the statistic shows that the typical telecommuter by working from home can save from $2.000 to $7.000 per year, depending on their location and mileage they have to travel.  

When working in an office, beside the expenses for gas (which can be really high, if you are having a long drive to work), additional expenses like buying coffee for several times a week, buying lunch or going to lunch with your colleagues can present pretty high monthly cost.

Also, a lot of companies have a certain dress code for which you need to buy business casual clothes, and if you are taking those clothes to dry cleaning, there is an additional expense on your budget.

Ultimately, while working from home you can save money on all additional services like lawn maintenance, house cleaning or even grocery deliveries. Most of the people are willing to pay for these types of services so they can have some free time.  (We have written a related article – How To Be Happy Working From Home (12 Tips to Improving Your Happiness When Working From Home)Opens in a new tab.)

Ten Ways You Save When Working From Home

Here is a break down of the common costs that occur while working in an office, and how much you can save by working from home.

1. Money Spent on Food and Coffee

Traditional workers usually buy at least two or three lunches per week, which is a lot more if they worked from home. Multiple studies show that American workers are spending around $1000 per year on coffee and around $2000 per year on food. Especially, if they have a stressful week, chances are that they will most likely spend more on a few drinks at a happy hour.

Very few percents of the workers are packing their lunch from home. However, people who are working from home don’t have the risk of forgetting their lunch box at home or being invited by their colleagues out for lunch.

Remote workers are less likely to grab lunch from a fast food’s drive-through, visit a restaurant, have a lunch delivery or go to a coffee shop on their break. Obviously, they still need to eat, so instead, they are making their lunches at home and drink coffee or tea that was bought before from a grocery store which still it’s much cheaper. This allows them to buy more expensive coffee, have a nice smelling home office and still pay less than $30 per month for a coffee.

When you are working from home, you will be more motivated in making your own healthy and budget-friendly meal, which will be much appreciated by your body and wallet.

To calculate your average costs on food and coffee, while commuting, you can multiply the average expenses per week for your dining and caffeine habits by 52, and you will see how much money you are spending on food and coffee per year. Of course, you can’t eliminate all these costs by working from home, but you can save pretty high percent.

2. Money Spent on Commuting

Average commute time for American workers is around 30 minutes one way. That is around one hour of driving the car or using different public transport. Also, there is a high percentage of workers that spend 2-3 hours daily on commuting.

Obviously, this presents a lot of expenses, whether you are traveling by car, bus, or rail. If you are using public transport or travel with other people, you will be able to save some money.  For example, a monthly pass for the New York metro is $121, which is $1500 per year. While working from home is commuting- free and it doesn’t cost anything.

Instead of buying an annual or monthly pass for public transport, you can buy a day or a weekly pass, depending on how many days a week you need to travel for client meetings. This way you don’t pay for travel passes you don’t use, which surely will pile up over time, and in case your contract ends, you will not have unnecessary expenses.

If you work from home, you will still need to spend on gas for driving around. But those expenses including car maintenance, insurance, etc., will be a lot lower. Especially if you and your partner have two cars, you will be able to sell the second car.

The average American worker with a full-time job will save around $444 in gas per years, and accordingly, those who have a half-time job will save $222 per year. The cost for gas mainly varies on  where you live, and how much you need to travel.

Additional commuting costs while using a car are bridge and road tolls, insurance for the car, parking, repairs, and annual overall car maintenance and upkeep.

Even if you use some different type of commuting way, and if it cost you nothing, you will still spend your free time for commuting. People who are working from home full-time or part-time save a high number of free hours per year.

3. Money Spent on Business Clothes and Dry-Cleaning

Usually, Americans who are working in traditional offices are likely to spend around $1800 per year on professional attire and accessories, since they need to have more than one outfit option and between $500 and $1500 on dry-cleaning. Even if you work in an office that has casual dress codes, you might still spend up to $300.

Although, sometimes can be difficult to calculate how much you have spent on clothing in a certain year, because you may buy clothes on sale, or maybe you will buy expensive brand names.

While working from home, can be in comfortable yoga-pants, T-shirts, and pajamas, and can lower your expenses in the long run. And if you have to participate in a meeting, you don’t have to be dressed up in appropriate work clothes all day.

4. Money spent on Makeup

Some women are using high-end face makeup every work day, and the cost of that makeup can be huge. For example, if a woman uses an $8 makeup on her face every day, if she doesn’t use it for at least one day a week, she can potentially save up to $400 per year. And these savings don’t include the potential savings on hair products.

5. Money Spent on Childcare

The average cost of a full-time childcare per year can range between $4.000 and $15.000. These costs vary according to the age of the child, especially if it’s an infant (the most expensive childcare), where you live, part-time of full-time childcare and the type of care you want.

Working from home can reduce the costs for childcare or totally eliminate them. Although it is hard to have a full-time job and do the parenting full-time, especially if your child is at an age where isn’t enough independent. There are several cases in which you can save a fortune on childcare.

  • – Paying for childcare for 2-3 days per week;

  • – Paying for part-time childcare;

  • – Working from home while the children are at school, is eliminating the costs of childcare or after-school care altogether;

  • – Hiring someone (high-school or college student) to watch over your children, during your work hours. This way you’ll be still around the house if they need something, and since they won’t have too many responsibilities, you can pay lower hourly rates.

6. Cost of Lost Time

Average commuters will gain free time of one to three hours per day or two to three weeks by working from home. Since you won’t receive additional vacation days, why not use this free time.

The time saved from not commuting can be used in different ways, make you happier and more productive, and would mean saving money in the long run. By having more than 5 hours of free time per week, amongst other things you can:

  • – Plan your meals and cook at home, even clip coupons to save money on food;

  • – You can do all yard work and housework, which you hired contractors for;

  • – Making DIY renovations;

  • – Possibility for a side business for bringing in extra cash;

  • – Taking classes for improving our skills or studying for a degree to raise your income.

Working from home allows you to live in a less expensive area, without paying high rents or mortgages.

According to few studies, commuting workers with an average salary of $50.000, (if they are working 8 hours per day, plus around one hour of commuting) will be making $4.500 – $5.000 per year by simply telecommuting and using the hours for commuting into something more productive.

7. Additional Expenses at the Office

When working in a traditional office, there are multiple ways of spending money unwillingly. For example, some coworker is getting married, so you need to give money for a gift, someone’s kid is having a fundraiser at school for some charity, or everybody is giving $5 for buying cake and pizza for some other coworker’s birthday. Even if you don’t want to take part in any of these giveaways, still you don’t want to be the one who refuses to join in.

When you are working from home, you don’t have these unnecessary expenses, since your coworkers will be your family and pets.

8. Healthcare Costs

Stressful jobs lead to different types of diseases, such as heart disease, diabetes, and obesity. People usually forget that they need to take care of themselves. Not having personal time can lead to buying unhealthy food and poor diet, instead of preparing healthy meals at home.

Not having to commute every day, can free up your time to prepare those healthy meals, and in the long run, you will save thousands on healthcare costs, which will come out of your pocket later in life.

Bear in mind that if you decide on leaving your traditional office job, you will lose the healthcare coverage by your employer, you will have to pick up all the expenses, or use the insurance of your partner.

However, if you are self-employed, you can claim some tax deductions on your own insurance.

9. Tax Deductions

Freelancers or self-employed workers who work from home can write off several things, such as internet services (if they are used mainly for business purposes), parts of your home used as a home office, gas mileage (if you need to meet a client for work), health insurance (if it comes out of your own pocket), parts of your phone bill, business furniture and equipment, heating etc.

Just make sure to keep all receipts so you can make the claim for the expenses of the business only, and keep separate the personal expenses.

Bear in mind that being a self-employed worker means that you will pay more taxes, than when you worked for a company. This is because you will be the employer and employee at the same time. Make a calculation on how working from home will affect your budget. You can consult a CPA on any arising questions.

10. Business Expenses

Working from home doesn’t mean that you won’t have any costs whatsoever. Starting from upgrading your computer software, paying for any repairs, installing an internet with higher speed, installing additional devices like, scanner, printer, webcam, etc. Also, buying your own office supplies, printer toner, paper, which can be done through your company or at retail prices.

On the positive side, you can deduct some of these expenses on your taxes, but still, you will need to pay while purchasing them.

How working from home can save money from an employers perspective?

Employers can also benefit and take advantage of having a policy for remote working. Few of the obvious benefits are:

  • – When a high percentage of the workers are working remotely and only a few of them are present in the office, then there is no need for large offices and paying high rents;

  • – Reducement of all costs regarding computer equipment, electricity, air conditioning, and heating, phones, office supplies and all other essential utilities for a smooth office operating;

  • – Increased access to vast talent pool from other locations and states, at lower hourly rates, and potentially increased employees’ productivity. All interviews, meetings, and training can be done through video calls in a virtual setting, so there are some serious cuttings on the expenses regarding travel.

In a big company, by letting at least one employee work from home, the company can save up to $10.000 per year on expenses.

Related Questions

What is work from home benefits?  Working from home is a perfect way of staying in the workforce and advancing in the career while enjoying in the comfortable setting of the home. Here are some main benefits of working from home:

  • – Flexible schedule and hours – Work in the time frame that suits you the best, and is the most productive for you;

  • – There aren’t unnecessary debates regarding different topics and interruptions from your coworkers;

  • – There is no wasting time in commuting – having lower stress for not being stuck in traffic, or overcrowded tube at rush hour which otherwise can be quite counterproductive;

  • – Comfortable environment – You can set up your home office, however, fit your need the best, even set the noise level around you;

  • – Wearing comfortable clothes – You can wear whatever you want from sweatpants to yoga pants, and nobody can judge you if your shirt is not ironed properly;

  • – Spending more time with your family – Especially if you have children, taking care of a sick child would be of utmost importance to you, attending family parties and dinners;

  • – You can do all your phone and conference calls, without worrying that you won’t find an available conference room.

How much money should I save to have a comfortable retirement?  The common statistics show that you need from $1 million to $1.5 millions for comfortable living. To calculate how much money you will need to save each month to reach your target nest egg, you need to consider the following factors: current earning, current age, what is your intended age of retirement, according to your health, your life expectancy, what is the amount of your current savings, what will be your source of income during the retirement, return/risk of portfolio investments, inflation, how much cash outflows will be during the retirement.

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