How to Adjust Your Budget for Permanent Work From Home

Working From Home

Have you made the switch to permanently working from home? If so, you're not alone. The remote work millions of Americans tried out during the pandemic is becoming an ongoing option at companies like Facebook, Slack and Nationwide, among others.

"Our best estimate is that 25% to 30% of the workforce will be working from home multiple days a week by the end of 2021," said Kate Lister, president of research and consulting firm Global Workplace Analytics, in a recent forecast of work-from-home trends after COVID-19.

Working from home can change both your home life and your work life. It can also change your budget. Say goodbye to costly commuting, workwear and 3 o'clock trips to Starbucks. Say hello to buying your own office furniture, stocking your own snack cabinet and ponying up for a premium internet connection. Here's how to adjust your budget if you've made the leap to permanently working from home.

How Working From Home Can Change Your Spending

According to the Global Workplace Analytics Telework Savings Calculator, if employees who are eager and equipped to work at home did so just half of the time, the economic benefit in the U.S. would total over $700 billion a year. Employers would save on real estate, utilities, janitorial services, security, maintenance, paper goods and more. Meanwhile, workers could save between $2,000 and $7,000 a year in transportation and work-related costs.

Money isn't the only potential gain: The average remote worker in this scenario would gain back the equivalent of two to three weeks' worth of free time per year, simply by skipping the daily commute. Workday flexibility could also change the way workers approach child care, eldercare and even pet sitting.

Every person's situation is unique, but to put the shift into perspective, think about these common ways work-from-home employees may save and spend.

Work From Home: Saving vs. Spending
You may save on…You may spend on…
Car maintenance, repairs, parking and gasFast internet and mobile data
Work wardrobe, makeup and dry cleaningOutfitting your home office
Lunches, coffee and happy hoursUtilities—air conditioning, heating and electricity
Child carePrinter ink and office supplies
Groceries, takeout and restaurant delivery


If you continue to work as a full-time employee, your home office expenses will not be tax-deductible. But if you become an independent contractor, you may be able to deduct some of your expenses. Switching to contract work will have additional impacts on your taxes and monthly expenses, though, so you may want to consult an accountant before taking this step.

How to Create a Work-From-Home Budget

Working from home is a significant lifestyle change, and your home economics will inevitably change with it. Creating a permanent work-from-home budget doesn't have to be about documenting the differences between your pre- and post-pandemic spending. Instead, focus on where you're spending now and what changes you can make to improve efficiency—and productivity.

  1. Track your expenses. Saving money on commuting is nice in theory, but you may already be compensating with higher-than-usual spending in other areas. The only way to know where you stand is to look at the actual numbers. Use a spreadsheet, app or pen and paper to keep track of all your expenses and see how much more you're saving (or spending) each month.
  2. Look for new saving opportunities. Some of the best savings may not be automatic. For example, eliminating your daily commute may save you money on gas, car repairs and maintenance. But the reduced mileage may also qualify you for a discount on your car insurance, provided you think to ask your insurance company. One step further: Now that you don't need to drive to work, can you sell your car and get by without it?
  3. Evaluate pandemic spending. When COVID-19 restrictions were in full swing, maybe you felt you needed to stockpile groceries, order frequent takeout and subscribe to multiple streaming services. Now is a great time to re-evaluate your expenses and weed out unnecessary costs.
  4. Find room for spending that improves your work life. Whether you pine for fast internet, a cleaning service, an ergonomic chair or noise-canceling headphones, some splurges really can make working from home more pleasant and productive. While you may not have the resources for everything you want, try to find funding for significant and affordable improvements.

What to Do With the Money You Save

If you do net a few dollars—or more—in savings with your new budget, what can you do with the money? Here are a few ideas to consider:

  • Shore up your emergency fund: If COVID-19 taught us anything, it's that emergencies happen—and they can wreak havoc on your finances.
  • Add to your retirement.
  • Try your hand at investing.
  • Pay down debt.
  • Polish up your career skills: Develop a new skill set or get a degree or certification that will improve your opportunities going forward.
  • Start a side business. In addition to a little extra money, you may have the time and the flexibility to get a side venture off the ground.
  • Improve your home. Adding solar panels or upgrading to energy-efficient climate control could pay for itself in the years to come. Repairs and upgrades can add to the value of your home.

Should You Consider a Move?

Another benefit of remote work is increased mobility. Without the need to drive to work every day, you might consider moving farther away. Maybe you can find a larger home, reduce expenses, move closer to family or explore a community where you've always wanted to live.

You may save money. Move yourself—and your current salary—to a community with a lower cost of living, and you may be able to upgrade your home and your lifestyle.

Your move can be temporary. You don't have to set down roots permanently—or at all. Try living in another country for a few months or a year. Rent a place in a new town so you can get the lay of the land before you buy a home. If you own your home, you may be able to rent it out instead of selling while you try out another location.

Before you move for good, ask yourself how likely it is that you'll be called back to the workplace. While many companies are enacting permanent work-from-home arrangements, these policies could change. If you're too far from the office, you may have to move back—or find another job. Also, what are your job prospects if you need to change jobs? Moving to a remote area may be appealing—and potentially money-saving—but if your current job falls through, will you be able to find another remote position or a local option?

Moving is a big decision. If you've always wanted to try it, though, now may be your moment. Budgeting for your big move—and your life once your move is complete—is the key to a smooth transition.

Budgeting Helps You Map Out Success

Working from home can bring about lasting gains, both in terms of your lifestyle and your finances. Just make sure you're realizing those gains and still working toward your long-term financial goals. Creating and adapting a budget can help you visualize your options, work through potential challenges and ultimately map out a plan for long-term success. Welcome home.