icon of two gears to show concept of expanded lessons Expanded Lesson 6 min read

Working from Home: What to Do with the Money You Save

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Many companies have started letting their employees work remotely. You can attend meetings, take calls and answer emails without going to the office every day. Working from home helps to improve worker retention, work-life balance and can even reduce certain expenses. The average person saves around $4,000 a year by working remotely. So, what are some things you can do to put that extra money to work? Use this guide to make smart money management decisions and get the most of every penny you earn while working from home.

Smiling woman on web conference call, working from home.
Yellow notepad with pen svg icon Lesson Notes:
  • Working from home can potentially help you save money on housing, transportation, childcare and food.
  • Plan out your new lifestyle to make sure you have everything you need to work from home and save money.
  • If you have extra money left over, work towards a financial goal like paying off high-interest debt or investing to start saving for retirement.

How to Save Money Working from Home

There are many ways to save money when working remotely. But how much you save will vary based on many different factors, including how much you were spending before, your professional and personal needs and how you plan on working from home. Whether you just got a job working remotely or you’ve been doing it for a while, use this guide to help save as much as possible.

Make a Plan

If you are planning on working remotely for the first time, there are a few things you should consider in regard to your new work environment.

First, you will need to make sure you have a comfortable place to work at home. You might feel the need to buy additional furniture or equipment to set up your home office. You will also need a reliable internet connection. If you don’t feel like turning your home into an office or don’t have the option of doing so, you may need to join a co-working space or work out of a local coffee shop or internet café. If you don’t already have everything you need to work at home, make a budget and compare the costs of items you will need to get a sense of how much you’ll need to spend. Check with your company to see if they provide any equipment or stipends to help cover the cost of remote work.

Next, envision what your life will look like now that you’re working remotely. If you are used to being around people every day, you might miss all the social interaction that comes with working in person. Many people that work from home like to engage in other social activities to break up the isolation, including joining a local gym, co-working space or taking classes. Working remotely may mean losing out on certain company benefits, such as the onsite gym, childcare or free lunch in the cafeteria. Envision what you want your life to look like, and factor in these new costs or potential savings into your budget.


Let’s start with one of the biggest expenses in your life: housing. Now that you’re working remotely, you might have the option of moving to a less expensive neighborhood or state. Many remote workers will use this opportunity to relocate to a more suburban or rural community where the cost of living is cheaper. However, relocating may not be an option if you still need to commute to work occasionally or have a family to consider and don’t feel like uprooting your life. Working from home can help you save money, but you may also have to pay more for internet, electricity, water and other utilities.


You won’t need to commute as much now that you’re working from home. If you have a car, this means spending less money on gas and car repairs. If you take public transportation, you won’t have to pay for a monthly metro card or bus pass. If you’re a multiple-car household, working remotely may allow you to downsize the number of vehicles you have and eliminate a monthly car payment and other related expenses.


You can also reduce your car insurance bill now that you’re not commuting to the city. The more accidents that occur in your neighborhood, the more expensive your premiums will be. Living in a quiet suburban community can knock a few hundred dollars off your bill every year.

Child Care

Your relationship with childcare may change as well. If you are working from home, there is a chance that you may be able to watch your kids at the same time.  However, trying to work while watching your children comes with its own challenges. If your kids are self-sufficient or your job has flexible hours, you might be able to do both at once, so you don’t have to pay for a babysitter or daycare.

Food and Eating Out

Spending more time at home can make it easier to cook your own meals. You can easily prepare ingredients or pop the food into the oven in between assignments and meetings at work. If you used to eat out a lot during the work week, working from home can help reduce your food bill.

What to Do with the Money You Save

Once you start working remotely and saving money, consider putting this money towards the following:

Create an Emergency Fund

Set aside enough money so that you can cover your expenses in an emergency. You should have enough money to cover your basic expenses for at least three months should you lose your job or are unable to work. If you don’t have that much saved yet, start small and create milestones until you reach your goal.

Pay Off High-Interest Debt

If you have debt from student loans, credit cards or other loans, you may want to focus on paying them off with the extra money you’re saving by working from home. If you’re wondering how to pay off debt, one way to start is by focusing on the loans with the highest interest rates. Put as much money towards these debts as possible to help avoid paying interest and to save money over the life of the loan. Make sure you are still paying the minimum amount on your other debts as well to avoid fees and missed payments which can hurt your credit score.

Let Your Savings Grow

If you don’t have a lot of debt, consider investing your money in investments like mutual funds or ETFs to help grow your savings over time. If you’re not comfortable investing, you can always put your money into a high yield savings account or money market account for less risk.

Use automatic transfers to automatically send the extra money to your savings or investing account so you pay yourself first and don’t have to worry about remembering to make the transfer every month.

Put It into a Retirement Account

It’s never too early to start saving for retirement. Create a retirement plan that will help you make the most of your golden years. Take advantage of any workplace retirement plans, and if your company doesn’t offer one, consider using an individual retirement plan to help save and invest for retirement in a tax-efficient way.

Now that you’re working from home, you may have a great opportunity to improve your personal finances. Use these tips to help reach your financial goals as soon as possible.

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