Here Are the States Whose Residents Are Really Best at Managing Their Money
As recently reported by CreditCards.com, the state whose residents are best at managing their money...
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COVID-19 has forced a lot of people to be off of work. And of those who are still working, a lot are now working from home for the first time. Whether you like it or not, this could be the way of the future.
Working from home takes some time to get used to. It can be easy to get distracted, it can be tough to stay focused, and not being around coworkers (that you like) can be a bummer.
But there are lots of positives too. You don’t have to worry about being stuck in traffic, you can wear your PJ’s all day, and you don’t have to be around coworkers (you don’t like). You’re like your own boss or manager. It’s up to you to keep yourself working and productive because there is no one to look over your shoulder unless maybe you have a cat or a dog (an employee of the month candidate?).
One of the biggest advantages of working from home can be the one on your bank account. Let’s look at three areas I think people can really benefit from by working from home.
Working from home can cut out a lot of necessary and unnecessary expenses that are common in everyday life.
The big one coming to my mind is transportation. Since working from home my car barely moves from the driveway, a lot different than my old 25 minute each way commute five days a week. If you’re using your car less, you’ll save on maintenance costs and gas. I don’t think I’ve filled my car in a month and it’s still at half a tank. If you’re not using your vehicle for work, you can consider changing your insurance to pleasure, which could save you some money. You can also consider the number of vehicles your family needs. If you and your spouse each own a vehicle, maybe you could sell one. You could earn some money from the sale and eliminate the loan payments, insurance premiums, and maintenance costs associated with owning a vehicle.
When you’re out working every day, it’s easy to go out for lunch or pick up dinner on the way home. In general, it’s easier to spend money. I’ll admit, I’ve gotten tired of making breakfast, lunch, and dinner every day for myself, but it’s good on my bank account. Spending money on food adds up quickly, especially if you don’t always eat it all and end up throwing out leftovers. The average Canadian drinks almost 3 cups of coffee a day. If you can save those costs alone that is significant.
You might also be able to save on clothes, accessories, and makeup. The stuff you already have won’t get worn as quickly, so it’ll probably last you longer. You’ll be able to save money by not having to spend money on things you otherwise would. It might seem like a small thing, but if you add a lot of small things up, you end up with a big thing.
Let’s say your daily commute is an hour in total, you work for 8 hours a day, you have to take a 1 hour unpaid lunch (even though you eat your lunch in 15 minutes), and it takes you an hour in total to get ready and unready for the day. Your 8 hour workday turns into an 11 hour adventure (you could watch all of the Lord of the Rings extended version in that time). Chances are your commute is longer or it takes you longer to get ready and unready.
If all you had to do was wake up, go into another room to start work for 8 hours with a 15 minute lunch in there, you’d have an extra 2 hours and 45 minutes in your day. It creates a ton of time for you and keeps work time reasonable. Let’s say you had to work an extra hour or two to finish a project or you had to start late because of an appointment or obligation. You still have time to complete the extra work before you’d be home if you had to go into the office like a regular workday.
You can spend more time pursuing your hobbies, spending time with your family, doing projects around the house, taking a course you’ve had your eye on, or building up that side hustle you’ve been too tired to really push. No matter how you spend that time, the truth is we could all use a little bit of extra time in our days.
Along with the fact that you’re not spending as much money on things, you might be able to deduct expenses.
When you work from home, you can usually deduct a portion of your bills that relate to living in your house or apartment. Take the space you use for your home office, divided by the total space that you live in. If your home office makes up 10% of your house, you could deduct 10% of your bills. This could include mortgage principal, heating, electricity, property taxes, house insurance, etc. It’s best to consult with a tax professional when filing your taxes or taking the time to understand what you qualify for.
Deducting at home expenses counts against your earned income. If you earn $50,000 in a year and have $2,000 of deductible expenses, the after expense income is $48,000. If you’re paying taxes throughout the year, deductions could result in getting money back.
Not only are you spending less, but are able to deduct at home expenses. It feels like you’re getting a double dose of a good thing.
A thing that will be interesting to watch is if salaries change?
If people are working from home, there are less expenses for people – meaning people should be able to provide the same quality of living with less money. In a sense, by working from home we could lower the rate of inflation.
On the other hand, with less employees working out of the office, companies are in a position to reduce their overhead. They might be able to get away with a smaller (less expensive) office space or no office space at all. It also reduces utility bills, office equipment, parking lot fees, etc. Commercial real estate could face a storm of uncertainty, but there should be lots of opportunity for new business once the economy is booming once again.
On top of the economical benefits for employers, you also have to consider the environmental benefits. Everyone is looking to be the ‘greenest’ they can in order to do things in a sustainable way. Since the COVID-19 outbreak, pollution around the world has been dissipating. There’s such a push to create a more environmentally-friendly world, but until now the world hasn’t been forced to act. If companies can encourage employees to work from home, they can effectively help fight climate change in arguably the best way we’ve ever seen.
These are interesting and unprecedented times we are living in. I know it is easy to criticize decisions as they are happening, but we really don’t have a blueprint or a reference on how to handle this pandemic. We are writing the blueprint as we are going through it day by day. We will really only know the right way to handle this, once it’s all over. I’d encourage you to take it in stride. Be patient, be understanding, and try to make the best of it.
This could be the 21st century’s assembly line, something that changes how the world does business.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.