5 Financial Benefits of Working From Home
About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area, that works with clients virtually across the country. Lamar's work with his clients focuses on budgeting, employee benefits, paying down debt, buying their first home, and investing. Lamar is the Founder of Dream Financial Planning, a virtual financial planning firm specifically designed to help young professionals and minorities take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the The DREAM Financial Planning Process ™ to help our clients achieve their goals.
With companies opting to conduct business remotely in light of COVID-19, it turns out that remote work has its advantages. More than half of employees would prefer to continue working remotely, even after the pandemic is over.1
Yet, what is there to be gained by a remote work schedule other than comfortability? Are there any actual financial advantages? The answer is a resounding yes - and these are just five of the ways in which remote work may actually give you more financial freedom.
Benefit #1: Less Work Expenses
You probably don’t realize how much money you tend to spend when working away from home. Just cutting your commute can save you thousands of dollars each year on gas, or more depending on how far you travel.2
You’ll also spend less money eating out or buying coffee, which quickly adds up when you do it most days a week. For example, say you buy a $4.00 cup of coffee just three days a week. In a year, that could add up to over $600.
You can save, too, on some unforeseen expenses: clothing and dry cleaning, for example.
Benefit #2: Tax Deductions
Many traditional employees will not be able to take advantage of home office tax deductions. However, those that fit the qualifications can. These individuals need to prove:
- Regular and exclusive use of a portion of your home for business
- Your home must be the principal location where you conduct business
The home office deduction caters best to any self-employed individuals, small business owners and independent contractors. If you don’t fit in these categories, you may qualify for a deduction from your state income tax instead.
Benefit #3: Flexible Hours
Working from home, even if you’re working as an employee for another company, often gives you more flexibility to “be your own boss.” 57 percent of employers are offering employees who work at home more flexibility in work hours.3
If you’re working an hourly wage, this means you can get more of a say about when you work and how much you’re making. If you choose to work less, that means you have more time open to earn money in other ways, such as through freelance work.
Benefit #4: Time for Other Business Ventures
Working remotely, as mentioned above, typically provides you with more flexibility. You can earn some extra cash - without sacrificing too much time - by exploring other earning methods.
Consider starting your own small business venture on the side or offering freelance services, both of which you can design according to your new schedule. Making the most of this extra time you’re given can be the key to becoming a higher earner.
Benefit #5: Possibly Cheaper Insurance
Some car insurance companies will cheapen your insurance if your commute has changed. If you typically commute regularly, call your insurance company, let them know your commute has changed, and they may offer you a discount on your current insurance plan.
Many workers favor remote work for the flexibility and capability to carve their own schedule. If you’re considering keeping your work remote, these 5 financial advantages are compelling reasons to do so.
Dream Financial Planning Process ™
Whether you're managing student loan debt, starting a business, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals is their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. If you're looking for guidance on: Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments we can help.
With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio feel free to send me an e-mail.
On the first Thursday of every month I send out a monthly newsletter with tips and tricks to help you manage your Finances. In the September Newsletter I discuss 9 common insurance mistakes to avoid. Before you buy Insurance, make sure you're working with a Fiduciary and ask about the agent's fees and commissions, which are often very high or hidden for Whole Life Insurance products and Annuities. How do you know if this is what they're trying to sell you? Look out for terms like cash value, guaranteed return, no risk, or tax-free growth.
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