Working from home can lead to a host of cost-saving benefits, such as no commuting costs, fewer takeaway coffees, less eating lunch out, and less need for expensive office clothes. However, if we’re not careful, we can see other costs spiralling, such as energy bills and online purchases, which can that mean overall we don’t save money working from home.
In this article, we’ll cover the ways that you can ensure that working from home frees up money that you can use to pay off debt, create an emergency fund, or start investing with.
Disclaimer: This article may contain affiliate links. If you decide to use them, my blog may earn a small commission at no additional cost to you, which helps to fund more helpful articles for you to enjoy. Find out more in my Affiliate Disclosure. Nothing in this article constitutes financial, or other, advice. These are my views and the results of years of research, testing and learning.
Claim any tax relief that you are due
Depending on which country you live in and your local taxation system, you may be able to claim an allowance for working from home, or some tax relief.
For example, in the UK, at the time of writing this article, UK taxpayers can claim tax relief if they are forced to work from home due to coronavirus, which could amount to £60 or £125. Despite this new scheme, UK home workers have always been able to claim for the costs they occur when working from home in the following ways:
- Employers can give you a £6 a week allowance towards the extra expenses.
- You can claim tax relief on £6 per week.
Due to coronavirus you can claim for the whole year for 2020 in one go. UK readers can find out more on the UK Government website section at claim tax relief for your job expenses.
If you do not live in the UK, do some googling to see if a similar scheme exists in your country.
Speak to Your Employer About What the Company Will Expense
If your employer asks you to work from home and you don’t have the necessary equipment, you can speak to them about what, if any, expenses the company is willing to cover. It’s normal for your company to pay for a designated laptop and mobile phone for work purposes, but you may have to make your own arrangements for any office furniture that you need.
Check the tax scheme in your country to see if you can get any form of tax relief on these expenses. You can also save money by buying second hand, or even seeing if someone in your community is getting rid of the furniture you need, for free.
Use an Automatic Energy Switching Service
You can make significant savings on your energy bills by using a price comparison site whenever you can switch. However, this can become a pain for consumers, so now automatic tariff switching providers are appearing such as Look After My Bills, Flipper and WeFlip in the UK.
Some studies have found that you could get a better deal if you use comparison sites for each renewal, however, if you are time-poor and unlikely to do this, then an automatic switching service is generally a better option than staying with the same provider.
Choose a Jumper Over More Heating
You’ll naturally feel the cold more when you are sat at a desk working away. It can be tempting to push up the heating, which will increase your energy bills. Instead, consider wearing a jumper and some slippers to keep you comfortable.
Standing up and taking frequent breaks away from your desk will also help to improve your circulation.
Fill The Kettle For One Cup or Mug Only
All those cups of tea and coffee can mount up over the weeks and months. You’ll save a little bit of electricity each time you only put the water you need in the kettle.
Stop Using Standby Mode
Your appliances, such as a laptop or mobile phone, will continue to use electricity if you leave them plugged in. Make an effort to switch off your work, and other equipment, overnight.
Quit The Gym
If you don’t have the time constraints of a commute, you potentially have some more time to invest in your health and fitness. While it could be tempting to join a gym closer to home, you could save money by exercising for free outdoors, which has a range of other health benefits. Alternatively, you could find free exercise channels on YouTube.
This point can be a little controversial as many people appreciate getting a break from their house when working from home. You’ll need to decide if the mental health benefits of socialising with other people at the gym outweigh the financial benefits of exercising from home.
Automatically Put Your Savings to Work
Working from home will save you money on travel, shop-bought coffee and lunches, and potentially clothing. If you leave this money in your bank account, it’s easy to start spending it. Instead put it automatically to good use.
If you are not sure what is the best use of the money, then you can take inspiration from Dave Ramsey’s seven baby steps, which give you a step-by-step financial plan to follow. The steps are as follows, and Dave recommends that you do steps 4,5 and 6 together:
1. Save $1,000 (let’s say £1,000 in the UK) in an emergency fund that is separate to the rest of your money, but instantly accessible.
3. Save three to six months of expenses to boost your emergency fund to prepare for situations such as ill-health or a job loss.
4. Invest 15% of your income for your retirement – whether that’s in a company-provided pension scheme or another retirement saving account.
5. Save for your child’s university education – if you have kids. The UK student loan system is less expensive than the US system, so UK citizens may decide to skip this step.
6. Repay your mortgage early.
7. Build your wealth through investments and give generously.
Keep Temptation at Bay
Working from home can expose us to more of a boredom factor as there are fewer distractions in the office.
If you are prone to unnecessary online shopping when you’re bored, then you may benefit from taking a few actions to reduce the temptations:
- Unsubscribe from email lists from brands that encourage you to spend
- Lock away your credit card, so you are not tempted to use it
- Delete any apps that encourage you to overspend
- Force yourself to sleep on any purchase decisions.
Ban Buying Lunch and Batch Cook
By lunchtime you may be climbing the walls to get out of the house. You can turn this craving into a money-saving and health-building experience by batch cooking yourself some lunches and then having one of these each workday.
You could then take yourself on an outdoor walk to get a break from your home office, raise your heartbeat and get some fresh air.
Start a Side Hustle
If you find that working from home gives you some extra time during the day, you can put that productive use by starting a side hustle that generates some additional cash to put towards your financial plan.
You can find some ideas for ways to make money from home in the following articles:
Stay Away From Scams
Online and other scams are on the rise, especially as more people are looking for ways to boost their income due to the effects of coronavirus. A scam is a surefire way to lose money, while also damaging your self-confidence.
Take the time to learn the signs of a scam and keep well away from them. The following resources may help you:
How Do You Save Money Working From Home?
Do you work from home?
What are your best money-saving hacks for home working?
How do you avoid spending temptation?
If you enjoyed this article and want to some more inspiration for making savings, you might enjoy: