Can You Afford to Work at Home? - Work at Home Series Part 2
When you first think about working at home, the question of affordability is usually what first comes to mind. Can you afford it, how much income will you lose, etc. Most people assume they can’t afford it, and they are usually wrong. Working at home can actually result in more money to go around even if your paychecks are much smaller.
I have discovered that if I went back to work today, it would cost me about $100 a week. Yes, I would be paying to work even though my paychecks would be about 3 times what they are now. I think this may be the case for a lot of people when you really add it all up.
Costs you need to consider:
1. Child Care Costs
How much do you pay for child care each pay period? Include any costs you incur for transportation, and extras like field trips or “bring food for the entire class” days.
2. Commuting Costs
How much do you spend commuting? Include fuel costs, bus passes, tolls, parking fees, etc. Also, include vehicle maintenance and wear and tear, along with insurance.
I went from 25K miles a year to less than 10K miles a year when I quit working. That saves me roughly $200 a year on maintenance alone and I saved another $200 a year on my insurance because I switched to an “I barely drive” policy. And, here’s the big one: using today’s fuel costs ($3.30 per gallon) I save about $3,000 each year on fuel-yes that is how much those extra 15K miles each year would cost me in fuel.
If I went back to work a 9-5 today, I would pay an extra $3400 just to drive to and from work. No thanks.
3. Health Care Costs
Like it or not, those people in the office have lots of germs. The kids in the child care with your children have germs. This means more frequent sicknesses and visits to the doctor. At $25 per co-pay and $25 per prescription; one round of sickness would cost our family $250 if we all got sick. Then, there is the fact that you have to take off from work when your kids are sick, then you get sick and take some more time off work and it ends up costing you even more. I know this isn’t the easiest of costs to calculate, but it is definitely something worth taking into consideration, especially if your insurance is very expensive or you don’t have any insurance to begin with.
4. Clothing and Uniform Costs
Business suits and fancy shoes, uniforms and nametags all cost money. Regardless of how you dress for work, you can probably eliminate most of the costs. I’m not saying you need to run around in your sweats all day, but the power suits can go. At home, it’s casual Friday every day.
5. Professional Fees and Club Dues
If you’re paying any fees or dues to any professional organizations, you can most likely cut those expenses out. If you are planning to re-enter the 9-5 world fairly soon, maybe not; however, it is something to consider.
6. Business “Extras”
$50 lunch meetings, after work drinks, and gifts for coworkers can really drain your wallet. They all add up and simply eliminating those few costs can save you a ton of money.
7. Taxes
You’ll still pay taxes like everyone else, but they will be a lot less. There are lots of deductions and tax breaks available to home workers and depending on your situation you could really save a lot of money. Check with your tax professional for details on your tax deductions and benefits.
8. Cell phones, PDA’s, etc.
If your boss isn’t paying the bills, you know they can get pretty high. Count on dropping those monthly costs drastically if you work at home. I went from over $100 a month for my cell phone service to under $60 when I starting working at home.
9. The Things We Never Count:
All those trips to the vending machine and those fun little office betting pools add up. They don’t seem like much and most people never think about them. I figured I spend about $1 a day on vending machine stuff, usually a Diet Coke and Twizzlers. So, add up that $1 each day throughout the year and subtract 2 weeks for vacation and I wasted $250 a year on something I never though about. Ouch. How much do you spend on the little things at work? It’s probably the costing you more than you think.
10. Emotional Costs
These were probably the major deciding factor for most of the women I know who decided to work at home. You have the guilt of being away from your children and the guilt of thinking about your family when you should be working. You have the worries that if you take one more day off for a family “issue”, like a sick kid you will get fired and the worry that your children are/are not being properly cared for during the day. You have the stress of trying to please everyone-your boss, your spouse, your kids, your coworkers-and that stress can really add up. Whatever the emotional costs are for you-weigh them out and make sure you give your emotions the same if not more stake in your decisions than money.
What do you think? Can you afford to work at home?I’d love to hear from you!
More Reading:
Work at Home Series Part 1-Is working at home for Everyone?
Topics: Make Money |
April 10th, 2008
The points you brought up were very good. When I was working I used to eat out every day for lunch. It was just another part of my day. Work clothes are a much bigger expense then people think about it. What really helped me with my decision was the cost of childcare. Over 50% of my pay went to pay for daycare. That is when I realized I had to make a change. And that change was to make staying at home work.
April 11th, 2008
1stopmom-
Most of the costs associated with work feel like just “part” of work, but they are really just extra money we are spending on things we don’t really need. So lunches out and snacks in the office can add up to a lot of money really fast.
As far as child care goes-it is EXPENSIVE and I really don’t understand how people can afford it…I would rather work at home for less money than try to figure out how to pay child care costs!
April 13th, 2008
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