Financial Focus: The savings & costs with a ” work from home” strategy
By Professor Anthony Rivieccio MBA PFA
Before CORONAVIRUS, working from home, or self employment , was 13% of America’s economy. Today, we believe , by choices of both , the employee and employer, that number will grow to close to 20% by the end of the year.
Is it therefore a new and important topic for at least 35% of America’s now, work at home employee’s?. Absolutely!.
Not withstanding tax implications, your stay at home ” savings & costs” should be examinated and written on a budget.
For example, ” commuter related “expenses are no more, right! That’s travel, clothing and food. Travel by car? Then your saving more, from Gasoline, tolls and parking headaches.Clothing? Put on sweatpants!. Now, many are calling this the ” sweat pants” revolution as all you have to do, especially if your using videoconferencing tools , is to wear a great shirt or top. I can share with you right off the top of my head many Clients that probably spend at least 15-20% of their Gross Income on these items. What you can do here is count this as ” savings”
Your NEW ” at work from home expenses” could be : Phone, electricity, supplies, from computer monitors, equipment, to, redefined hardware, file cabinets and maybe even ink.
So if you add up your ” savings” and subtract your ” costs”, this will at least tell you if you have any ” Net Savings” or in short, ” Is it economically worth it for you to do” ?.
Write your ” savings” & ” costs” on paper like below:
Savings. Monthly. Year
Travel. $200. $2400
Clothing. $100. $1200
Food. $250 $3000
Total Savings $550. $6,600
Phone. $50. $600
Electricity $100. $1,200
Supplies. $100. $1,200
Equipment $200. $2,400
Total Costs $450. $5,400
Net Savings $100. $1,200
Yes, I show a net Savings !. But what if I did not?.
One option: You can see if your job will reimburse you for those ” costs”. Make sure you go there with proper and legal receipts and documentation. Many employers will consider transferring that deduction, from you to them.
To make financial costs right for you when you stay at home, especially if your employer will not pay for your costs is at least make sure that you show ” positive Net Savings” . Showing negative net savings ( or higher costs to you) only means your job has transferred their expenses from themselves- to you. If you are showing more ” costs ” than savings, then while you might be enjoying your home life better- you are indeed paying for it with less annual income.
So ” work from home” budgeting is definitely a must learn, as many try to be one adjust to the new normal .
Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info and The Bronx Chronicle. Mr. Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University. You can reach Anthony at 347.575.5045.
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