Does Web Working Really Add Up?

In planning to work from home, we consider in detail the technicalities, the home office setup, and all the fun, exciting things we’ll do to fill in all that extra time we’ll have. This is, after all, a lifestyle change, and there’s a lot to think about.

Unfortunately, though, the financial questions are often dismissed with the cursory thought: “It’ll be cheaper because I won’t have to travel.”

Even if you’re lucky enough to work for a company that will pay to set up your remote office, you’ll still need to take a range of other likely costs into account. So while you may save money, you may not save as much as you think.

It might be worth jotting down a simple budget to work out what the financial implications of working from home may be. If you’re already working remotely, this can be a good way to find aspects of your arrangement that are costing you more than they should.

The Budget

Here’s an example budget that I used to assess how much I’d benefit (or otherwise!) by working remotely. No, it doesn’t itemize my improved quality of life and decreased road rage. If I decided that I was going to use the extra hours in my day to do paid work, though — for example, by taking freelance projects while holding a paid job — I could certainly add those figures in.

I’m going to talk you through my own example, which will hopefully alert you to some of the unexpected elements of your own life that may impact on the cost-effectiveness of your decision to work remotely.


When I worked in the city, I caught buses, trains and trams, and spent around $275 AUD ($240) a month on public transport.

Working remotely, I travel to the city less often, but each time I do, I drive to the station, because the public transport in my local area is only available at peak times. The costs total around $34.75 AUD per trip.

That running figure was calculated using an average cents-per-kilometer cost provided on my local motoring association web site for a car like mine. On a monthly basis, assuming I go into the city six times, I now spend around $208.50 AUD on work travel.

I used to drive to the station about twice a week when I worked in the city, so the actual cost of work travel for me back then was actually around $553 AUD a month. As it turns out, I am making quite a saving on travel by working from home. Woo! I’m off to a good start.

Eating Out

I’ve heard many people comment that if they worked from home, they’d save significantly on eating out, because they wouldn’t have to buy lunch from a cafe every day. Of course, you don’t have to buy lunch from a cafe if you work on site — you can bring lunch from home. As an office worker, I spent more on coffees and snacks than lunch — around $30 AUD a week on average.

As a remote worker, I still find myself in cafes very often — each time I work away from my home office now, I’ll undoubtedly wind up doing work in a cafe, which costs me, at a minimum, the price of a coffee and something to eat. Frequently, I’ll meet up with other people socially for lunch or a drink when I travel to town, so I might end up spending $50 on food and drinks in an away-from-home day.

As a consequence, the $30 or so a week I used to spend on eating out when I worked in an office hasn’t decreased — it’s risen.


Some of my colleagues complain that they have to join a gym because there aren’t enough daylight hours after work in which to exercise. If they worked remotely, they reason, they’d be able to fit more into their day — including exercise outside a gym. And then they could save around $50 a month!

This may be true … provided you can find the time during the day to exercise. You may find you miss the gym equipment enough to join a gym close to home, which may negate some or all of the savings you expected to make.

I didn’t think my cost-free roadside running regime would be affected at all by working from home — until I bought a mountain bike to ride in the extra hours after work, which cost and additional $500 AUD.


If you’re traveling for three or more hours each day just to get to your place of work, you’ll likely enjoy the extra time you have if you work from home. Those who commute know it’s not just the time you spend commuting that’s a problem — its the fact that it tires you before you get a chance to start anything else.

If you’re planning to obtain paid work to fill these extra hours, you might want to reduce your work-from-home expenses by the net income you’ll earn in that time.

Take care, though: it’s easy to overestimate this additional time you’ll have. Though you might be able to do a couple of hours of extra work here and there, you may not have the oceans of extra time you imagined.

Another pitfall, if you’re starting your own business, is to imagine that you’ll have three or more additional chargeable hours in every single day. If you’re starting a business, you’ll likely spend a lot of time initially on legwork, which may not add directly to your bottom line.


While some of us can work with nothing more than a laptop and a chair, if you’re taking your remote working seriously, you’ll probably find that you need to obtain new technology.

Computer, phone and software upgrades can leave you out of pocket. In the first month of working purely from home I spent $180 AUD on unexpected but necessary software purchases alone.

Of course, technology also includes connectivity. If you work from home, you may need to upgrade your home communications service to a business account, which will undoubtedly come at a higher price. I’ve included the upgrade cost in my budget. You may also decide to use any number of paid web apps — security, storage, and so on — that add unanticipated dollars to your weekly outgoings.

When I started working from home, we had to upgrade our wireless Internet connection, and, since that hasn’t made an appreciable difference, we’re now considering paying to have a cable connection put in — not cheap. So far, the trenching has cost us $250. I’ve put this, plus the one-off software purchase, in my budget.

Home Office

The other expense you may not have considered is your home office — you have a chair and table, and think that’s all you’ll need. But you may find over time that you need a better chair, ergonomic devices such as wrist pads and foot rests, lamps, shelves, filing cabinets, reference materials — the list goes on. A few weeks after I started working full-time from home, neck and back pain indicated that I needed to upgrade my desk chair — at a one-off cost of $270 AUD.

As well as the one-offs, there are also ongoing costs like paper, postage, couriers, office supplies and so on. Make sure you include those in your budget, no matter how small the cost might be.

Believe me: These items add up. I left my nice cushy office job expecting to save money, and swiftly found that working from home wasn’t nearly as cheap as I’d expected. As you can see, working from home saves me just $154.50 AUD per month — I was definitely expecting to save more than that when I first considered it. Moreover, the unexpected expenses that have cropped up so far have totaled a whopping $1,200 AUD. Even if I hadn’t bought my mountain bike, I’d still be $600 worse off than if I’d stayed working on-site.

What About Tax?

It’s likely I’ll be able to claim many of these expenses as tax deductions, which is great news. Of course, as any business owner knows, it’s best to keep the expenses low in the first place, rather than rationalizing wild spending with the possibility of reduced taxation.

I’ve included a column in my budget to itemize my tax deductions, and as you can see, though I’m doing OK here, the deductions don’t come anywhere near my total expenditure. Traveling to and from client meetings isn’t a deduction in my country; nor are the coffees I purchase while working in city cafes. These costs, and the price of my expensive bike, come straight out of my pocket.

As you can see, before you make the leap — and start planning what you’ll do with all the money you’ll save by working from home — it’s worthwhile to do some quick sums to make sure your expectations are reasonable. Of course, now that I know what I’m spending, I can also think about ways to reduce my non-deductible expenses if I wish.

If you’re thinking about making the leap to web work, check out our free “Web Work 101: How to Escape the Cubicle” e-book.

How has working remotely affected your budget? What unexpected outlays did you face in establishing your work-from-home lifestyle?