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Working from Home and Your Budget: 7 Things to Consider

When you think about working from home and the impact it could be having on your finances, chances are you’re coming up with a lot of ways you’ve cut back and saved money. But have you thought about any of the ways it might be costing you money? Working from home isn’t always as cheap as you might think it is.

In March, when the COVID-19 crisis forced businesses across the country to close and millions of American workers to start working from home, it may have seemed nice at first. No commute. Huge savings on gas and auto expenses. Going to work in your pajamas.

But there are costs that you may not have considered – on your checkbook and on your psyche. If you’ve transitioned to working remotely recently, either temporarily, partially or permanently, there are a few expenses you should be aware of. Has your relationship with money changed?


Going through a financial transition? Contact the financial advisors at Foran Financial Group. We’re here to help.


Technology and Office Supplies

When you thought you’d just be working from home for a few weeks back in March and April, you could have gotten away with setting up your work laptop and a few folders at the dining room table or on the corner of your couch, but if working from home appears to becoming more of a long-term or even permanent solution (and you have seemingly taken over the entire dining room table), it may be time to consider setting up a more official office space.

Unless you’re able to retrieve your office supplies from work, you’ll probably have to set up and outfit your own home office: Desk, chair, lighting, office supplies, printer, ink, paper – the list can get long. You may even need to purchase software licenses or upgrade your computer equipment.

Internet, Cell Phone and Utilities

If you are working from home, you’re almost certainly using bandwidth of the high-speed Internet you pay for, the phone service you pay for, and the water, sewer, electricity and utilities you pay for. In some cases, your bills may go up due to the increased usage. In others, like with the Internet, you may find that you need to upgrade or expand your service to accommodate the extra traffic, especially if you have kids who are continuing their distant learning in the fall!


Skipping your morning Starbucks and eating lunch at home every day is probably a net-cost savings over the daily take-out or dining in a restaurant you may have become used to when you were going in to the office every day. But you may find you’re spending more on other things like bottled water, soap to wash dishes, toilet paper, paper towels and cleaning supplies. Janitorial services, the office watercooler and sponsored lunches are something you won’t be able to take advantage of working from home.


If you’re a working parent, you know how hard it can be to strike a good balance between work life and home life. But now that school is out, many daycares and summer camps are closed, and youth sports are not yet starting back up, you may find yourself parenting full-time and working full-time.

To help carve out some quite time from your day to return calls or concentrate on a project, some families have decided to hire a nanny or pay a babysitter to watch the kids for a few hours. These costs may seem insignificant when you consider them on a daily basis but they can start to add up quickly over time, especially if schools and daycares remain closed in the fall and you continue to work from home.

(Read our 5 financial planning tips every new parent should know.)

Real Estate

Prior to the Coronavirus pandemic, it was estimated that employers netted about $10,000 a year for each employee working from home, the bulk of which would have covered real estate expenses. Now that businesses are asking employees to work from home, these costs are falling on the employees.

It may not be a financial cost, as you’re still paying the same in mortgage or rent, but you may be giving up some of your private living space. Has the play room been taken away? Did you have to set up shop in a guest room? Is the family room or even your bedroom off limits between 8 a.m. to 5 p.m. while you or your spouse is “at work”?

Physical Activity

Working from home means no walk to and from the parking lot, no taking the stairs, no lunchtime gym session. This may sound insignificant, but if the most exercise you’ve been getting is back and forth from your desk to the fridge, you may need to find creative ways to work some physical activity back into your day, whether it’s purchasing a treadmill and free weights to set up in your basement or subscribing to a new work-out app or videos.

Tax Deductions

Here’s the good financial news about working from home: You may be able to deduct many of the above expenses from your taxes when you file next year. Talk to your financial advisor and accountant about the possibility of writing off the purchase of home office furniture, computer equipment, office supplies, professional development costs and travel expenses. You might even be able to deduct a portion of your Internet, electricity and other utility bills, as well as a certain amount of square footage of your home, based on the size of your home office.

The Bottom Line

There are many benefits to working from home, and ways working from home might save you money, from commuting costs to your dry cleaning and business lunches. But it’s important to remember that there are also costs associated with it – working from home isn’t free. It’s important to review your budget to accommodate these new costs – and savings!

If working remotely becomes a permanent solution, have a conversation with your employer about ways you can be reimbursed or compensated for some of these work-from-home expenses. Discussing your situation with a certified financial group can also be a huge benefit whenever a big life change happens. It’s wise to discuss any changes in your income, your expenses, your goals and your relationship with money.

If you’re going through a transitional period and are looking for a financial advisor in New Jersey, or if you are ready for a second opinion from a new financial group, contact me directly. I specialize in helping people navigate life’s major transitions – in fact, it’s my passion. Schedule a no-obligation conversation and see how I can help you too.

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