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Leaving your full-time job and starting to work for yourself from home is a big decision to make. You probably have several reasons for wanting to do it. Maybe you want to be your own boss. Maybe you want to spend more time at home with your family. Or maybe you’re just sick of the rat race.
There will be lots factors to consider when making this decision. One of the big ones will be can you afford it. Giving up your day job to work from home on your own business will probably lead to a decrease in your income. At least at first.
It’s important to think about the knock-on effects this will have on your budget.
Before you chicken out though, it’s not all negative. You will be able to make lots of savings by working from home as well!
Let me break down some of the costs and savings of working from home so you can weigh up the pros and cons and make an informed decision.
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Costs of working from home
Let’s start with the costs and get them out of the way.
If you’re starting your own business or even working remotely for another company, you may have to buy your own equipment. It’s likely that you’ll already have some of these items, but eventually, they will have to be replaced.
Some items you might need to purchase include
- Hardware: Laptop, printer, office furniture, etc.
- Software: You might need particular software to do your job. Examples include Microsoft Word and Adobe products (Photoshop, Acrobat Pro, or InDesign), etc.
- Stationery: No more stealing pens from the office! You’ll have to buy your own from now on. Luckily these can be picked up cheaply enough at your local dollar store or on Amazon.
Increased utility bills
If you go from being out of the house for 10 hours a day to being there 24 hours a day, you are bound to have higher electricity and heating costs. You will be able to offset some of the cost of these bills against your taxes. However, there are plenty of things you can do to save money on utility bills.
The cost of being lonely
You will no longer see your former colleagues on a daily basis. This will be a huge change for you, and you might struggle with it more than you expected to. If you’re home alone all day, there will be literally no one to talk to. Even if you’re home with your kids, you might miss adult company.
To alleviate this feeling, you’ll be tempted to go out and meet friends for lunches and coffees. This isn’t a bad thing. We all need to connect with other people. But the costs of all these lunches and coffees will start to add up.
Try to find ways to reduce this cost. You could invite your friends to your house for lunch. You could also pack a picnic and meet them in a local park.
Perks of the job
Your day job might come with some nice perks that save you money. You might have free access to the company gym. You could have unlimited access to free tea and coffee. My sister even has all her meals for free in her workplace.
If that’s the case for you, you will have to cover these costs yourself from now on.
Here are some ways you can save on these costs:
- Set up a home gym. This can be done very affordably with a few workout DVDs, a mat, and some dumbbells.
- Invest in a coffee machine so that you’re not tempted to go to a café for fancy coffees.
- Meal plan so that you have access to healthy meals and avoid wasting food.
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On the more serious side, your employer might have been contributing to your pension on your behalf. This is one cost that you will have to prioritize to make sure that you have enough money for retirement.
Some of your main reasons for working from home might be to spend more time with your children and save on childcare costs. It’s likely that you will save money from doing this. But if you want to build up a freelance or small business, you will need to invest time in it. As a result, you might still have some childcare costs. You shouldn’t feel guilty about this. It’s hard to do both jobs full time without making some sacrifices!
Savings of working from home
Ok, so I know you might be taking a pay cut for the privilege of working from home. But often working from home can save you quite a bit of money, which means that you don’t need to earn as much to keep the same standard of living.
Here are some things you might save money on by working from home:
Once you ditch your office job, you won’t need to buy formal workwear anymore. Jeans and T-shirts are perfectly acceptable work from home attire and are less likely to need dry cleaning. So that’s two savings: formal workwear and dry cleaning.
The cost of eating out will vary from person to person. Some of you might buy breakfast and lunch on the go every week from Monday to Friday. Some of you might be more frugal and only do this a couple of times a week.
It’s very tempting to eat out every day when you work outside the home. It can be hard to turn down invitations to head out for lunch with your colleagues.
Of course, there’s less temptation when you’re at home. Instead of picking up something on the way to work, you can cook a nice breakfast of bacon and eggs or avocado toast for a fraction of the cost. You can meal prep each week and make sure you have leftovers for lunches.
You will have to buy extra food to ensure that you have enough on hand for lunch, but it will cost much less than eating out would.
As well as eating out, it’s also tempting to grab a quick coffee on your way to work to wake you up in the morning. If you don’t fancy instant coffee at home, you can invest in a coffee machine. The cost per cup will be much less than if you bought it in a coffee shop.
Lucky you! You will have no transport costs when you work from home – roll out of bed, and there you are!
You can save on the cost of public transport. This can add up to quite a bit. For example, the cost of a monthly TTC pass in Toronto is CA$146.25. In Dublin, the cost of a monthly bus pass is €134.
If you drive to work, you can save on the cost of gas and parking as well as lower the cost of wear and tear on your vehicle. If you’re a two-car household, you might be able to get rid of one of the cars. Just make sure you don’t end up isolated.
In many large cities, the cost of childcare is astronomical! Being able to cut this cost by being home every day with your kids will cut a huge chunk out of your expenses. As I mentioned above though, you might still need to pay for childcare a couple of mornings a week to work on your business.
Looking for a way to start your work-at-home dream life? Check this out!
Dog walker costs
If you have a fur baby, you don’t have to pay the dog walker anymore. Now you can spend your lunch break out walking with your dog. Heaven!
You will be much less likely to make impulse purchases when you work from home because you won’t be passing by the shops as much. This used to be a dangerous one for me when I had to walk up and down Grafton Street in Dublin every day on the way to and from work!
Now you’ll be more likely to plan your trips to the shops and just get what you need.
I mentioned that your bills might increase when you work from home because your usage will be higher. One benefit of being self-employed is that you can offset some of these expenses against your income. You might be able to offset the cost of your rent or mortgage as a result of your office being in your home; the cost of utility bills like heat, light, water, internet, telephone, etc.; and even the cost of buying a new laptop. You should contact a qualified accountant to check which costs you can offset.
Some savings you make will be priceless. You might be much less stressed as you no longer need to commute for three hours a day or deal with difficult coworkers. Less stress could lead to lower medical bills, but also better physical and mental health in general.
Saving several hours a day on your commute will also give you so much more time to work on your business or just enjoy your life.
I hope this blog post has given you some food for thought when it comes to deciding if you should quit your day job and work from home. Did I forget any important costs or savings of working from home?
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