How Much Really Save By Working at Home?

The decision to work at home, especially online, is touted as a way to save money. No more professional wardrobe. No more dry cleaning bills. Less driving, which cuts down on maintenance, gas and other costs for your car. Less eating out. No childcare costs. It sounds like a pretty good deal. You might be surprised, however, at how some of the costs stick around. Childcare is the big one, depending on the type of work you do from home, the age of your kids and the flexibility of your hours. Sometimes you can’t completely cut the cost of childcare out by working at home. You may still need it in order to work enough hours. This is mostly an issue when the kids are too young to be sent off to play on their own. Little ones need a lot of attention. You need to make a decision if you can deal with your children fairly as you work, or if you need help still. It can be worth it financially if you’re earning more than the cost of the childcare. You get time to work and the kids get time with other children. It’s not a bad thing at all once you find the right childcare facilities. Some costs go up when you’re working at home. Being home more means you will use more electricity. More heat in the winter, more air conditioning in the summer. There may be equipment costs as you start up, as well as old equipment goes bad or needs repair. A computer is pretty much a minimum for most work at home positions. So is a high speed internet connection, although you may have that already. If you’re running your own business, there will be business expenses. Business cards, a domain name and website hosting, advertising expenses, it all adds up. Thank goodness these are less than if you had to rent a brick and mortar location for an offline business. Then there’s the last big expense. Taxes. Taxes are a tricky one. If you’re earning less, your basic taxes may be lower, but you have to pay your full social security tax, which is split between you and your employer if you have a regular job. This may increase your overall tax costs. You really need to be aware of your tax situation. Many work at home jobs are actually a form of a home business. If you’re considered an independent contractor rather than an employee, your taxes are your problem. Your employer won’t be paying them for you or withholding them from your paycheck. If you need to be paying your own taxes, know that from the start so you don’t get a nasty surprise come tax time, and do your quarterly payments as needed. Overall, you should get some savings versus working outside the home, and that’s an advantage as you try to bring your income up by working at home. Don’t expect more savings than you can realistically make. You need to be prepared to deal with your real financial situation, no matter what it may be.