(CNN)Ian and Nikki Aguilar were overjoyed when they welcomed a baby girl, Emilia, in July. But when they started investigating day care centers in their neighborhood, the new parents experienced some serious sticker shock.
The toll of child care costs
To work or not to work?
Do you know how much it costs you to go to work? Perhaps you’ve wondered how much money you’re spending on a long car commute. But there are other hidden expenses associated with working outside your home. If you buy a coffee and/or a meal a few times a week, the monthly total could easily rival your cell phone bill. Most office jobs have a dress code that requires you to buy a certain amount of business casual clothing. And if those clothes are dry clean only, you’re looking at another $50/month or so.
Ultimately, the biggest cost of working outside of your home might be all of the convenience services the modern professional is often willing to pay for in exchange for precious free time. From lawn maintenance to house cleaning, and all of the smaller things like grocery delivery in between, outsourcing your life can easily encroach on your net income. Not to mention the retail therapy we often indulge in after a stressful day or week at the office.
If you’re a freelancer or your employer will let you do it, working from home is a great way to eliminate many of these unnecessary expenses. It can also improve your health and wellbeing.
In this article we break down the common costs of working at an external location and show you how much you can save by spending your work day at home.
The price of a long commute
With about half of America’s jobs located in a few congested metro areas, many workers can’t afford to live near their workplaces. They buy or rent in outer-ring towns to lower housing costs and opt for public transit or longer commute times.
According to AAA’s cost of driving charts, a person driving 10,000 miles a year in a small car could spend about $5,700 annually. Commuting on public transit is cheaper, but still a $150 monthly train pass adds up to $1,800/year.
For example, let’s look a person who makes $75,000 a year and lives in San Francisco (the median household income for SF is $92,500). With median rents within 30-40 minutes of the city in the $2,000 range, living within commuting distance of San Francisco would take up about 50 percent of this person’s salary. On the other hand, if they have to commute without access to public transit, they’ll incur the following costs:
Car-related expenditures
With bridge tolls above $10 a day, gasoline costs likely $200 a month, and the additional need to insure a car ($125, say) and park ($500 a month or more) you are spending more than $1,000 a month just driving around. That’s the equivalent of a full-time, minimum-wage job.
Lost time
Commuting to San Francisco via car from a more affordable city like Martinez, CA would take about three hours a day. This time cost would be less in most areas, but can safely be suggested to be over $500 a month plus the money lost from “time cost”—working from the assumption that one could use the two to three hours spent driving and taking trains around, doing something economically viable.
Live anywhere and spend less on housing
You can work remotely for your San Francisco or New York office and find a place to live that’s far less expensive. Living in cities like Lancaster, PA or Cincinnati, OH would in terms of rent or mortgage cost $1000-$2000 less a month than if one were to live in a smaller house or apartment in New York or San Francisco. Lest you fear you’d be bored living away from the big city, Lancaster was featured in our list of best cities for artists along with four other small, affordable, and vibrant places.
Improve your health and wellbeing
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One important thing that people with high-stress office jobs tend to forget about is self-care. Studies have shown that extensive sedentariness leads to obesity and heart disease. Furthermore, losing time you could use to prepare healthy food can result in a poor diet.
Working from home will free up all that commuting time to care for yourself. In the long-term, this leads to decreased healthcare costs.
Generally, people in poor health have a higher chance of having chronic conditions (i.e., diabetes; joint issues requiring replacement) in their 50s and 60s, which in aggregate can add hundreds of thousands of dollars to late-life health costs. Much of this money will be coming from your own pocket.
Take more tax deductions
Freelancers can write off things like the use of your home as an office, your internet provider service (if it’s primarily used for business purposes), your car (for instance, if you have to present work to a client, the gas mileage can be written off at 0.55 cents a mile), and health-insurance related expenses (including health expenses that came from your own pocket because your insurance didn’t cover them).
When the commute is worth it
Telecommuting as an employee or working from home as a freelancer can be financially beneficial and free up more time to do things you enjoy, but there may come a time when you want or need to give up your home office. Here’s why you might consider working in an office again.
You’re less likely to get promoted
This is true; even in today’s digital age, companies have very few managerial-level staff who work off-site. You may be in a situation where you have to accept a lower income ceiling. Note that, from a money standpoint, this may still be better: making $60,000 and living in Lancaster or Cincinnati is infinitely better than trying to make it in San Francisco on $80,000.
However, you may find that after a few years, you’d like to make a next step in your career that isn’t possible without returning to an office job. This may be beneficial economically if, long-term, you boost your salary by at least $30,000 (about $1,600 a month after taxes in most places). Such a raise may be worth it and offset the additional costs associated with commuting and working outside of your house.
You need the benefits
Working from home as an employee usually comes with health insurance and other benefits, but freelancers may find they need to take an office job simply for the healthcare.
Summary
There are a variety of obvious and hidden costs associated with commuting and working in an office. Telecommuting can help you save money on transportation, eating out, and other convenience services, but you may eventually find you want or need to return to working on-site to advance your career or gain benefits unavailable to freelancers.
Source: Money Under 30
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There’s been a lot of discussion in the flexible job market about how working remotely will save you money. But how, specifically? A couple of years have passed since we last explored in detail how not working in an office environment can amount to real savings. Here, we’re updating our research with the latest figures.
Spoiler alert: The average person can save at least about $4,000 per year by working remotely.
Where do the savings happen? Check out the six ways described below to find out how working from home will save you money.
1. Gas: $686 saved per year
How we reached this number: The average worker spent about 52 minutes commuting to and from work in 2015, roughly 30 miles each way, according to federal data. Nationwide, the average cost of gas is about $2.20 per gallon as of this report, according to AAA figures.
Assuming you average about 25 mpg, you can save $686 a year on gas by not commuting to work.
2. Car Maintenance: $767 saved per year
How we reached this number: An estimate by AAA put the average annual cost of car upkeep at about $767 per year, based on routine factory-recommended maintenance and repairs.
3. Dry Cleaning & Laundering: $500 to $1,500 saved per year
How we reached this number: While dry cleaning costs can vary by region (and including variables like the higher cost to clean women’s shirts compared to men’s), the average household spends about $500 per year on dry cleaning, according to one source. But another says that women spend on average $1,500 per year.
4. Lunches & Coffee: $1,040 saved per year
How we reached this number: You may already be painfully well aware that eating out for lunch and buying coffee frequently can add add up fast. This is a discretionary cost that can amount to hundreds of dollars over the course of a year.
Say you have a relatively cheap lunch out twice a week, paying $7 each time, and you purchase a $3 cup of coffee twice a week. That would be $20 a week, or $1,040 a year—not an insignificant figure.
5. Professional Wardrobe: $925 saved per year
How we reached this number: Bureau of Labor Statistics research on consumer spending patterns shows the average amount spent on apparel in 2015 was about about $1,850. Let’s assume the average professional worker spent about half that amount on clothing for work. That amounts to $925 per year.
6. Tax Breaks: $750 saved per year, if you’re a freelancer or self-employed
How we reached this number: If you work from home as a freelancer or self-employed professional (not an employee of a company), you can deduct your home office, taking advantage of recently streamlined IRS options that apply to home-based workers. It’s worth noting that the home office deduction for employees was eliminated in 2018 in the Tax Cuts and Jobs Act.
If your home office deduction is $3,000, you can lower your tax obligation by $750.
TOTAL:
For Employees: At least $3,918 a year when you’re a full-time telecommuter at the low end of the dry cleaning estimate, and $4,918 if you’re at the high end. We’ve excluded the home office deduction for this group.
For Freelancers: Adding in the home office deduction, you’ll save at least $4,668 if you’re at the low-end of dry cleaning expenses and $5,548 if you’re at the high end.
A Bonus Way That Working Remotely Will Save You Money
Vacation Time & “Real” Salary: An additional $4,867 saved
How we reached this number: Have you ever tried to place a value on the amount of time not spent commuting, and what that means for your financial bottom line? Let us explain. To begin with, consider time spent commuting as part of your total workday. After all, the entire purpose of slogging to and from the office is to do your job.
Given that the average commute time is 52 minutes (see above), that’s nearly another hour every day devoted to a work-related activity, namely, commuting. However, by working from home, the average former commuter will be spending 225 fewer hours on a work-related activity, or about 28 fewer eight-hour days every year.
How does that translate when it comes to your salary? Say you earn $50,000 a year and you’re commuting to an office. That would mean your making about $21.70 per hour (because you’re working an eight-hour day plus your 52-minute commute, or just under nine hours daily).
Compare that with making $24.04 an hour for an eight-hour day when you’re telecommuting and really working eight hours. Add that up throughout the year, and it’s like you’re making $4,867 more annually by telecommuting.
Source: FlexJobs
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The astonishing human potential wasted on commutes
The American commute is getting longer.
It now takes the average worker 26 minutes to travel to work, according the the U.S. Census Bureau. That’s the longest it’s been since the Census began tracking this data in 1980. Back then the typical commute was only 21.7 minutes. The average American commute has gotten nearly 20 percent longer since then.
According to the Census, there were a little over 139 million workers commuting in 2014. At an average of 26 minutes each way to work, five days a week, 50 weeks a year, that works out to something like a total of 1.8 trillion minutes Americans spent commuting in 2014. Or, if you prefer, call it 29.6 billion hours, 1.2 billion days, or a collective 3.4 million years. With that amount of time, we could have built nearly 300 Wikipedias, or built the Great Pyramid of Giza 26 times — all in 2014 alone.
Instead, we spent those hours sitting in cars and waiting for the bus.
[Hate your commute? It’s going to get even worse]
Of course, not all of us have 26-minute commutes. Roughly a quarter of American commutes are less than 15 minutes one way. On the other hand, nearly 17 percent of us have commutes that are 45 minutes or longer. And the prevalence of these long commutes — and of really, really long commutes — is growing.
In 1980, for instance, fewer than 12 percent of American workers commuted for 45 minutes or more one way, according to the Census.
The Census didn’t even bother separating out 60- and 90-minute commuters in 1980, since it was relatively rare. But they began tracking these mega-commuters in 1990. That year, 1.6 percent of workers commuted 90 minutes or more one way. In 2014, 2.62 percent of workers were commuting this long, an increase of 64 percent over the prevalence in 1990.
These 90-minute-one-way workers — 3.6 million of them — spend a huge chunk of their lives simply going to and from work. Consider this: If your commute is the typical 26 minutes each direction, that works out to a total of nine full days a year spent traveling to work and back. That’s more than you’d like, probably, but it’s not a huge number.
By contrast, a mega commuter with a 90-minute commute is spending three hours a day on the road. That works out to more than a full month out of the year commuting. Imagine spending the entire month of August — 24 hours of every day — stuck in your car or riding the bus. That’s what it’s like for 3.6 million American workers.
This is a terrible way to live. People hate their commutes more than just about any other activity in their lives. Nobel laureate Daniel Kahneman and economist Alan Krueger asked a group of 900 Texas women to rate how they felt during various daily activities and found that the morning commute came in dead-last in terms of positive emotions, behind work, child care, and home chores.
There’s a massive body of social science and public health research on the negative effects of commuting on personal and societal well-being. Longer commutes are linked with increased rates of obesity, high cholesterol, high blood pressure, back and neck pain, divorce, depression and death.
At the societal level, people who commute more are less likely to vote. They’re more likely to be absent from work. They’re less likely to escape poverty. They have kids who are more likely to have emotional problems.
[Where Americans go to work when they don’t work near home]
Speaking more abstractly, there’s a huge pool of more or less untapped human potential currently locked up in long commutes. Thought experiment: Let’s say we could wave a magic wand and reduce the commute times of the most extreme commuters — those commuting for 90 minutes or longer one way. And let’s say we could reduce their typical commute from 90 minutes down to, say, 30 minutes — closer to the national average.
Consider the transformational effect this would have at the individual level, giving these folks two hours of their day back. And then multiply that two-hour time savings by the 250 work days in a typical year — that’s 500 extra hours a year. Multiply that by 3.6 million workers, and you come out to about 1.8 billion man-hours of potential productivity released back into the economy. That’s the time-equivalent of 900,000 full-time jobs.
Now if you give a person two free hours, he’s probably not going to spend that time working. He’ll watch TV or play Candy Crush or drink beer with his friends, or do other things that are not necessarily productive. But over time, that person will have more time to be civically engaged. He’ll have more time to take care of his kids or his health or his marriage. He’ll be better-rested, and a better worker for it. The benefits are potentially limitless.
Of course, we don’t have a magic policy wand we can wave to make this happen. But it remains a useful illustration of just how much those super-long commutes are costing society.
Commutes are often framed as a question of consumer preference, and to a certain extent they are: There’s a delicate balancing act between “living close to work” and “living in a bigger home,” and many workers opt for the latter — especially when they have children.
But cities are becoming more and more expensive. For many working families, living close to a job in a city center is no longer an option at all, regardless of house or apartment size.
One way to fix long commutes would be to make cities more affordable. But there’s an even simpler option: promote the use of telework.
Working from home is becoming more common, although perhaps not as rapidly as its earliest boosters envisioned. In 2014, 4.4 percent of the workforce worked primarily at home, according to the Census. That share has nearly doubled since 1980, when 2.3 percent of workers worked from home.
Certain types of jobs will never be amenable to telecommuting. Surgeons can’t operate from home, for instance. Cashiers need to be at the register to ring you up. But plenty of work — from writing code to answering phone calls to data entry — can be done in a home office just as well as in a cubicle.
Companies can be understandably squeamish about remote work for any number of reasons, from IT concerns to fears about employees missing out on the benefits of casual workplace interactions.
Meanwhile, though, the workforce is suffering the very concrete ill-effects of longer commutes, which affect not just the workers but their families, companies and communities, too. And as the Census data show, those commutes keep getting longer — and are likely to continue doing so.
Source: Washington Post
2. EXPENSES IN JULY 2019: $2,051
- Freelance employee: $1,000
- Content writers: $680
- Web development: $150
- Web hosting: $86
- Email marketing: $49
- WP Rocket plugin: $49
- Grammarly: $19
- CDN: $18
If you want to make up to $60/hr, you must attend a FREE work at home workshop here. Caitlin Pyle, multi-millionaire work at home mentor will show you how to work from home as a proofreader and makeup to $60/hr! HEAD HERE to begin your work-at-home career.
3. NET PROFIT FOR JULY 2019: $19,548 (90.5% GROSS PROFIT MARGIN)
Source: Adam Enfroy
The post Work From Home and Save $60,000 a Year! appeared first on How We Make Money Online .
* This article was originally published here
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