9 Ways Working from Home Saves You Money

by Salary.com Staff - Original publish date: April 22, 2013

The Hidden Savings of Working from Home

A recent comparison of the salaries of in-office jobs and work-at-home jobs found that working from home typically comes with a slight pay cut. But that’s not quite the end of the salary debate when it comes to telecommuting jobs versus in-office jobs.

While telecommuting jobs may pay slightly less than the same job done from a traditional office, there are a number of cost-savings associated with working from home that more than make up the difference.
Here are 10 ways that working from home saves you money, including the obvious costs and some that you may not have considered before.

9. Gas

SAVINGS: $1,120 per year

If you work from home full-time, you immediately eliminate any costs associated with your commute, whether they be from driving to work or taking public transportation. Even if you’re walking or biking to work, you’ll wind up with lower bike maintenance costs and fewer pairs of sneakers to buy.

But in all seriousness, the average U.S. worker commutes 30 miles and 60 minutes round-trip every day, according to the U.S. Census Bureau and the Department of Labor. If the average gallon of gas costs $3.59, according to AAA, and you average 25 MPG, by not commuting to work, you will save $1,120 on gas every year.

8. Car Maintenance

Consumer Reports estimates the median cost of annual car maintenance is $312, which only includes maintenance and repairs. If you factor in lowered insurance costs and slower depreciation from driving your vehicle less, that savings can rise significantly.

It may not seem like much, but every little bit helps when you're potentially taking a decreased salary to work at home.

7. Dry Cleaning & Laundering

SAVINGS: $600 - $1,000 per year

If you’re working from home, you don’t have to worry about maintaining a professional wardrobe which often has to be dry cleaned.

The average professional spends between $600 and $1,000 each year on dry cleaning, but you can eliminate this entirely by telecommuting because your clothes will be decidedly more casual and less delicate. Let's face it, no one ever went broke dry cleaning their flannel pajamas.

6. Lunches & Coffee

SAVINGS: $832 per year

Eating out on a regular basis is costly.

Let’s assume you’re a fairly thrifty person and you have lunch out with coworkers twice each week at $5 a pop. Throw in a morning coffee twice a week for $3 each, and you’re spending $16 each week, or $832 each year eating out while working in a regular office. Telecommuting makes it much easier to make lunches and coffee at home, which won’t eliminate your food and coffee expenses entirely, but will certainly bring them down.

5. Professional Wardrobe

SAVINGS: $590 per year

The U.S. Department of Labor released some interesting statistics about where U.S. consumers spend their paychecks each year.

Clothing and apparel accounts for $1,881 of our spending every year, so if we assume that even half of that is spent on our professional wardrobe (because we’ll still need those casual clothes...), that’s an instant savings of $590 when you work from home. And if your office job requires to wear a suit to work every day, your cost savings will probably be much higher.

4. Tax Breaks

SAVINGS: $750 per year

If you work from home, you may be able to claim several home office deductions that office-bound workers can’t touch.

These include deductions for your home office space, property taxes, office decor, and maintenance and business expenses. Even if you’re a full-time employee (and not a freelancer or contractor), you can still claim these deductions and expenses as a telecommuter. Depending on your home office set-up, these deductions can vary widely, but the IRS estimates that the average home office deduction is $3,000 which lowers a typical tax obligation by $750.

3. Vacation Time & "Real" Salary

SAVINGS: $5,553 per year

If the average U.S. worker commutes almost 30 minutes each way to work, it adds up to an extra 60 minutes daily that we spend for the purpose of work, but don’t actually get paid for. By saving that 60 minutes every day, the average full-time telecommuter will work 260 fewer hours, or 32.5 fewer eight-hour work days (11 24-hour days) each year. Not having to commute to work equals a LOT more free time throughout the year.

When you take those hours and add them all up, it really makes a difference in terms of salary. If you’re making $50,000 a year but commuting to the office, you’re making $21.37 per hour (because you’re working an eight-hour work day plus a one-hour commute for a total of nine hours daily). If you aren’t commuting, your $50,000 salary becomes $24.04 per hour because your eight-hour work day is really eight hours. Add that up throughout the year, and it’s like you’re making $5,553 more annually.

2. Time

SAVINGS: Intangible

Those extra 260 hours annually the average telecommuter finds by ditching their daily commute can lend themselves to a variety of tasks that we’d otherwise put off, some of which can save us money.

With all those extra hours you can donate your time rather than your money to charity (as 89% of working parents say they'll do in their kids' schools), you can cook more at home and spend less on take-out for dinner, you’ll have time to DIY rather than hire a pro for minor home repairs, and so on. Not to mention much more time with your family or friends -- something that cannot have a price tag placed on it. Needless to say there are countless ways that having more time will save you more money.

1. Better Health

SAVINGS: Intangible

Though a much less tangible cost, lowering your overall daily stress level can really add up to big savings over time. Commuting to and from work stresses most people out, whether you’re dealing with heavy traffic, packed trains, or all sorts of weather conditions. This daily stress can really add up, leading to higher medical and therapeutic bills over your lifetime.

It’s not easy to calculate the average savings that someone might experience by ditching the stress of their daily commute, but it’s foolish to ignore the possibilities.

It All Adds Up

TOTAL SAVINGS FROM WORKING AT HOME: minimum of $4,172 per year

If we go conservative and just tally up the actual, tangible savings of working from home, the average telecommuter can save at least $4,172 each year! This doesn’t even include the cost savings from more vacation time, time overall, lowered stress, and the higher “real” salary mentioned above.

So, the next time you consider the salary difference between an in-office job and a telecommuting job, be sure to take into consideration all the different ways working from home can save you money. Opting for a smaller salary to be able to work from home might be the smarter choice after all.

Let Salary.com Help You

Whether it makes more sense for you to work at home or in the office, you need to make sure you negotiate what's best for you. And Salary.com can help.

The first thing you should do is research, so you're able to come to the table armed with the knowledge of what your job is worth. Use our free Salary Wizard below to find out what's a fair salary for your position. You can enter your location, education level, years of experience and more to find out an appropriate salary range before you negotiate.

Good luck.