Remote working isn’t new, but it certainly hasn’t always been as prevalent as it is today. With more employees allowed to work from home due to the changes necessitated by the COVID-19 pandemic, flexible work arrangements are likely here to stay.
The Benefits Of Remote Work
Working in the comfort of your own home has its set of perks. For instance, this setup can help you carve out time to attend to other responsibilities, enjoy quality time with your family, and prioritize work-life balance. On top of those obvious benefits, working from home will let you save money from your daily commute, coffee runs, lunch takeout, and more.
Steps To Be In Better Financial Shape While Working Remotely
However, if you’re new to this work arrangement, you might encounter a few challenges as you make the transition. For instance, you might not anticipate having extra time on your hands.
Given that spare time, why not take this opportunity to be in better financial shape? After all, remote work can affect how you handle your finances. To get started, follow these four steps to become financially smart while working from home:
1. Buy Only The Things You Need
For some employees, spending more time browsing the internet can imply more opportunities to splurge on nifty items they see on sale. It can be tempting to add random items to your digital cart with all the online ads, flash sales, and notifications you receive from your favorite brands. It’s perfectly fine to buy furniture, home office supplies, and certain devices to support your productivity needs, but make sure to purchase necessary items only.
To save money from creating your makeshift office, try to look into the resources you already have at home. Perhaps you can find long-forgotten things that could still be of some use to you. You may also opt to repair equipment instead of purchasing new ones. By being resourceful, you can stick to your budget and give old items a newfound purpose.
Furthermore, working from home can be the perfect time to shop for home goods you’ve been putting off purchasing for some time. Of course, make sure to check the item’s quality before placing your order.
For instance, suppose you want to buy mattress online. Read up on whether or not the item will provide you with adequate support as you sleep. You’d want to wake up feeling refreshed and energized to tackle a new set of tasks at work.
Remember: you should reward yourself accordingly. Keep an eye out for online sales to save money, but be careful so you can catch yourself before you overspend.
2. Review Your Budget
The next step to becoming financially savvy while working from home is to create a budget that works for you.
To make your life easier, learn to take advantage of budgeting templates and applications to classify and record your cash flow. The categories you can use include but aren’t limited to your utility bills, credit card statement, discretionary spending, savings, and investments. In this way, you’ll know where your money’s going and be able to readjust your budget so your financial goals aren’t negatively affected.
Learning to tweak your budget as the need arises allows you to be flexible without having to consume most of your financial resources. At the same time, in keeping track of your finances, you can decide whether or not it’s best to have a side hustle for additional income.
As you look at your tracker, you’ll also be able to reflect on your spending habits and money management techniques. Upon reviewing them, determine if these are still helping you progress toward your financial goals.
3. Build Your Emergency Fund
If your income has been affected due to business changes, keeping track of your expenses will enable you to shift your priorities and remind you to allocate money to more important things, such as your emergency fund.
Having a backup plan is a financially savvy move because with this, you can be more prepared and calmer when emergencies and certain contingencies strike. No matter how secure you think your job is, a cash reserve can make a big difference. With extra cash on hand, you won’t have to scout for ways to borrow money. This’ll help you stay on budget and avoid touching your savings.
Start building your emergency fund by allocating money to it every month. Depending on your income, you can put as much money into this reserve. Ideally, an emergency fund should be anywhere from six months’ to a year’s worth of your income.
However, if you’re still paying off debt, you can set aside a minimum of three months’ worth of your income. In this way, you can sleep well at night knowing you’ll be covered for the next few months or so if you suddenly lose your job for some reason.
Additionally, it’s a must to have an emergency fund if you plan to put your money into the stock market and other similar volatile investments. Your cash reserve can help you stay afloat during economic downturns.
4. Inquire About Company Reimbursements
While it’s true that working from home does help you save money, this shift might also contribute to hidden costs that could accumulate due to lifestyle changes and home office needs. If you have to use money from your savings to purchase work-related devices and supplies, try asking your human resources (HR) department if the company has reimbursement programs.
Your company might be able to cover expenses for software upgrades, office stationery, digital platform subscriptions, and Internet costs. In this way, you can minimize your work-related expenditures and put more of your earnings into savings.
Inevitably, working from home can change the way you handle your finances, but that adjustment doesn’t have to be a bad thing. In fact, it can be used as an opportunity to begin tackling tasks you’ve been putting off, such as revisiting your financial tracker and assessing your spending habits.
Moreover, by following the steps above, you can learn how to plan and take control of your finances so you can save more without having to compromise on your basic needs.
I am Tristan who loves to ride and spend time with my jenny (horse) and my love Mark. After completing my graduation, I have been working as an accountant in a private firm in Cologne.