Working from home has become more common than ever as a result of the 2020 Coronavirus pandemic. It's also a great way to save time each day by killing your daily commute. But even beyond the pandemic and time saving, one major perk of working remotely is the amount of money you can save. Of course each person's work situation is different but we hope you'll use these numbers for perspective. We used statistics from Census.gov, AAA and the U.S. Bureau of Labor Statistics and found the the average American could save $6,000 per year by working from home. That's equivalent to a 9.4% raise on the average American's salary of $56,516 according the the US Census.
Here's the quick breakdown:
Gas & Car: $1,430
Lunch & Coffee: $1,840
Clothing & Laundry: $1,699
Tax Breaks: $1,050
Total: $6,019 saved
Gas & Car Maintenance
Savings: About $600 per year on gas
According to the U.S. Census Bureau, the average American spends about 52 minutes commuting to and from work, resulting in an average of about 30 miles traveled. The national average gas cost is currently at $1.98 per gallon. Noting the average American car gets about 25 mpg, you can save around $600 worth of gas by working from home.
Savings: About $830 per year on car maintenance
According to a survey by AAA, the average maintenance cost for new vehicles is about $1,186 per year. This includes car parts that need to be replaced regularly — such as tires, brake pads, and headlights. This also includes long-life components like alternators, radiators, strut assemblies, and catalytic converters spread out over the life of the vehicle. You'll use that car for other things so there will still be some maintenance here but for most people, the majority of miles put on a vehicle will be related to work travel.
Lunch & Coffee
Savings: Around $1840 per year
Working from home gives you the advantage of having a flexible schedule, allowing you to cook and eat at home with your family. Homemade meals are not only healthier, but they are also cheaper. Working from home, you no longer have to pay for the average cup of coffee at $2.70 or having to purchase relatively inexpensive lunch for about $15 every so often.
If you buy coffee and lunch at least twice a week at work, you are spending about $35.40 per week. You could save about $1840 per year by eating at home.
Clothing Purchases & Laundry Services
Savings: Around $933 per year on Work Clothes
In the most recent report from the U.S. Bureau of Labor Statistics, the average amount for apparel expenses (purchases, repairs, and rental of clothing and accessories) accounts for $1,866 per individual per year.
Assuming half of your clothing budget is assigned to your professional wardrobe, you could save at least $933 per year. In fact, you are likely to save even more money because casual clothing lasts longer due to its materials and composition.
Savings: From $624 to $1976 per year on Laundry Service
A professional wardrobe is much more expensive to maintain and clean than casual clothing. When working from home, you’ll be able to wear comfortable and less delicate clothing.
According to Statista, the average business professional spends between $12 to $38 in laundry and dry cleaning coin-operated units. If you get your clothes dry cleaned once per week, you could save from $624 to $1976 per year depending on your wardrobe needs.
Tax Breaks for Your Home Office
Savings: Around $900 to $1200 on home office tax deductions
If you meet the IRS home office qualifications, working from home as a self-employed freelancer allows you to deduct $5 per square foot of your office space at home. The maximum you can deduct is 300 square feet ($1,500).
The average American house is about 1,800 to 2400 square feet. Assuming you use 10% of your space as a home office, you would save from $900 to $1200 in tax deductions.
Working from home has plenty more benefits than the monetary savings mentioned above. The main one being the time you save not having to commute to your job. We'll look into those numbers as well in a future study.
Good points regarding the benefits of working from home. However, you should also indicate the incremental costs of working form home. not typically covered by the Employer. Examples include higher utilities, internet, stationery and other office equipment and supplies, food (no office snacks or free lunches) and so forth.
It would be good to explore what percentage of remote workers receive a monthly remote workers allowance or stipend!