How Working From Home Affects Your Budget

working from home budget

With more people working from home due to the COVID-19 pandemic, flexible work policies are more than likely going to be more permanently accepted by companies nationwide.

According to the 2019 National Compensation Survey (NCS) from the federal Bureau of Labor Statistics, only 7% of Americans had the ability to work from their homes. However, as employers see the benefit of letting their employees work from home, it’s highly likely that it could become the norm even after social distancing becomes a thing of the past.

But will working from home help or hurt your personal budget? Let's take a look at where working from home could help you save money and where you might end up spending more.

How working from home can help your budget

Who doesn't want to save some extra money? When you work from the convenience of your home, you also have the opportunity to save a lot of money in specific areas of your budget.

Commuting costs 

Since you don't have to drive to work every day, you won’t have to spend as much money on gas. According to research from CareerBuilder, 47% of those who drive to work spend between $10 and $25 on gas each week, with 30% spending between $25 and $50. That adds up to a savings of $40 to $200 per month!

And if you are driving your car less, chances are you will have fewer maintenance fees on your vehicle. You can also save money on public transportation if you don’t drive but use an alternative method to get to work. Not to mention the money you’ll save on parking and tolls if your commute to work is far.

Clothing and make-up 

If you’re like me, you probably try to avoid video calls and instead opt for audio-only or phone calls. On the off chance I do have to join a video call, I wear a nice shirt but then keep my sweatpants on. After all, if no one at the office is going to see what you wear, then why bother spending all that time in the morning to get fully dressed up?

While you shouldn’t work in your PJs all day, it is true that it’s more comfortable to wear more casual or loungewear when working from home. The upside of working from home and not wearing suits or fancy dresses is that you won’t need to buy as many.

This could save you hundreds, if not thousands of dollars every year. According to the latest data from the Bureau of Labor Statistics Consumer Expenditures report, the average household spends $1,866 a year on apparel and services.

The same goes for makeup. Do you really need to wear all of your makeup? Or will a little blush and lipstick suffice? Working from home means you’re likely to save money on both clothing and make-up.


If you find yourself working from home more it means you aren't commuting as much and that also means you can make fewer coffee shop stops. Did you know that the average American spends $1,100 a year on coffee alone?

Instead, you can save some money in the long-run by investing in a high-quality coffee maker and making coffee at home. You can buy coffee beans that will last up to a month for the price of one latte.

Take out

Working from home could also mean eating out less. That means you can save money in the long-run from not eating those $12 sandwiches every day for lunch. About two-thirds of Americans spend money on lunch during work.

Instead, you can buy the groceries you need to make your own meals at home. This will actually end up costing you less in the end if you budget it out correctly. Look into meal planning and preparing meals ahead of time. After all, if you’re spending less time on the commute to work, chances are you’ll have more time to cook.

Keep in mind that it's ok to treat yourself to take out every now and then, but you don't want to make it a habit.

Child care

You can potentially save a lot of money on child care by working from home. It’s certainly not easy to work full-time at home with your children around. However,  it does save you money especially if your kids are old enough to be independent and work on schoolwork by themselves.

If child care is something you need to have even if you work at home, you can save costs by limiting the number of days per week you use child care. That way you can manage to still work full-time but only have to pay for child care part-time.

Gym costs

Paying for a $50 for a gym membership that you probably don’t even use as often as you'd like? Try working out at home instead. For a few hundred dollars you can create a nice at-home workout station with a stationary bike and some weights. Over the long run, this will be cheaper than your monthly gym membership.

While you might miss the social aspects of going to the gym, you may have more of an incentive to work out by seeing your workout equipment at home and in turn save tons of money.


Another benefit of working from home, especially if you are self-employed, is that you might be able to deduct part of your mortgage, rent, or utilities from your taxes. If you use a room or spot in your house exclusively for work, it might qualify as a business expense.

How working from home can impact your budget

While working from home can save you a ton of money, you may find that costs start to creep up in other categories. Below are some costs that could increase. Be sure to make a plan to accommodate them in your budget.

Higher utility costs

Being at home all the time means you’re also going to use up more energy. You will probably need a faster internet connection to make sure you can connect to your workplace tools and video conferencing services. Your house utilities will also rise, as you use the lights and stove more often. Even your water bill is likely to tick up a bit.


You’re also likely to use up house essentials faster, which means buying them more often. Items like toilet paper, sugar, and milk for coffee and even hand soap are items you’ll most likely use even more. You may also get inspired to try out new recipes since you have extra time from not communicating.

So while you might not eat out as much, your grocery bill is likely to rise as you spend that money on other essentials. That being said, we have some great tips on how to cut your grocery bill in half.

Online shopping temptations

Being online all day also means seeing tons of ads if you browse your favorite websites as a way of taking a break from work. You could be tempted to splurge on that new game or nifty purse you saw was on sale as a way to reward yourself for working from home.

While it’s okay to buy something nice for yourself every once in a while, be careful about going over budget and overspending by spending too much on online shopping.

Technology and office supplies

If you work from home consistently your kitchen table might not cut it long term and you might want to set up a nice workspace. That means spending money on things like a nice desk or a better chair to support your back. You may also need to buy office supplies, like pens and post-it notes.

Be sure to plan accordingly for these expenses before you start getting inspired on Pinterest. Ideas from those pretty pictures can get expensive.

Working from home will change your budget

Working from home will change your budget but it doesn’t have to be a bad thing. With a little bit of planning, you can potentially save thousands of dollars a year!

Use budgeting templates and tools to keep track of your money to ensure that even your budget might change, your financial goals are not impacted.

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