Friday, March 14, 2008
Considering a Home Office? Here's a Breakdown of the Dollar & Green Savings
Posted by Planet Green on 3/14/08:
While quitting your job to save money may sound counterintuitive—and to folks from my parents' generation, pure insanity—Trent from The Simple Dollar estimates that his leap from 9-to-5 drone to work-from-home mercenary will save him approximately $8,000 per year. He does the math for us:
1. Reduced breakfast costs: Trent eats breakfast at work three days a week because he's crunched for time. Replacing these three $6 breakfasts with oatmeal or fruit, at a cost of 50 cents or so, will save him about $16 per week, or $832 per year.
2. Reduced gasoline usage: With a daily commute that guzzles about a gallon and a quarter of gas for 30 miles, Trent spends roughly $4 per day on his commute. Even if he has to make a similar trip every week for research purposes, he'll end up saving roughly $832 per year.
3. Reduced lunch costs: Trent eats out with co-workers on average three days a week. Replacing these $10 meals with at-home chow or leftovers can add up to an annual savings of $1,404, he estimates.
4. Reduced daycare costs: Even if daycare costs drop by only $50 per week for Trent's two kids, he and his wife can conceivably save around $2,250 per year.
5. Reduced incidental spending: Outta sight, outta mind. Trent says he often buys something incidental he doesn't need, simply because he happens to be at a store with a co-worker during lunch. Let's say he saves $30 a week—that adds up to an extra $1,560 each year.
6. Reduced clothing expenses: Because Trent doesn't have to doll up at home like he has to in a professional setting, he says he'll likely save around $300 per year.
7. Reduced eating expenses: Rolling up his sleeves in the kitchen, instead of ordering takeout or dining out with his wife every week, will save Trent roughly $520 per year.
8. Eliminated travel expenses: Trent's job required him to travel once every three months, and the reimbursement policy was what he called "stingy." Because he would often pick up a souvenir for his wife and kids, each trip easily cost him an extra $100 beyond what he would normally spend. That's $400 in the bank per year.
9. Reduced entertainment expenses: Ah, office-related social events. Because each one cost between $15 and $20, putting the kibosh on these extras saves Trent an estimated $240 per year.
The best part, he says, are the after-tax savings….Each month, the expenses of my job were eating just about $700 out of my pos-tax income-my real paycheck. Those expenses simply disappear-and knowing that eases at least some of the fear of making that leap!