Wednesday, August 29, 2012

Being Home Saves Money

As a follow-up to my last post, I wanted to highlight some of the other benefits of working from home - or just being home - that are often overlooked when one is thinking about jobs.

The most important is the cost of having a job. I know it seems kind of counterintuitive to believe that it costs money to work, but it does. Consider that the average commute is sixteen miles, which is thirty-two miles, round trip, per day times five days equals one hundred and sixty-two miles per week. The average "worker" spends almost an hour, per day, driving to and from work, which amounts to five hours per week, and two hundred and fifty hours per year. In dollars, that's almost $2500 per year of time wasted on a commute (at $10/hour).

In actual dollars of cost, if we say that the average driver gets 25 mpg and gasoline is $3 per gallon, it costs almost $1000 per year - in just gasoline - to get back and forth to work. There are other costs involved with owning a vehicle, however. Insurance costs, on average, $1500 per year. Then, there's the annual taxes/registration that's around $100, and a car payment and/or maintenance and upkeep, which can be thousands of dollars per year.

So, just to own a car to get one back and forth to a job can cost as much as $5000 per year. At $10 per hour for 40 hours per week for 50 weeks (allowing for two weeks of vacation per year) is $20,000 annual gross income. Just the commute costs one-quarter of one's income.

Then, there is the cost of childcare, which will add $5000 to $11,000 per year to the cost of working outside the home - and that's just for one child. If there are multiple children, double it, and between the commute and childcare for two kids, it no longer makes sense to work at a $10 per hour job.

There are other expenses, too. Most jobs require employee-purchased uniforms or "work" clothes. Even fast-food restuarants, notoriously the worst paying of all low-wage jobs, require that employees buy shoes and pants for work.

And, then, there are the costs, that we never, ever, consider calculating into the cost of working equation, and those costs are not easily quantified, because we live in such a convenience-driven society that the idea of self-sufficiency is almost comletely an alien concept ... or something those hippies do.

The fact is that, if I stay home and cook meals from ingredients that I've grown here at home, I've saved my family thousands of dollars on food. If I mend our clothes rather than buying new ones, I save us money on replacement costs.

There are dozens of other ways that a SAHP (stay-at-home Parent) can implement frugal practices that save significantly over what that parent might earn in the workplace. The problem is that our society does not value saving money as much as we value spending money, and so, we've made this push for everyone to get a job.

With everyone working, more (usually low-wage) jobs are created to accomodate those working parents. And the result is that we're working to pay someone else to do what we can (and should) be able to do for ourselves, if we didn't spend hundreds of hours per week working to earn the money we think we need to pay for those services that we could (and should) do for ourselves.

If we could stop racing around that treadmill and honestly evaluate our needs versus our wants, and really calculate those things we pay for that we actually need to survive, I know we'd find that we could work a lot less, and enjoy our lives a lot more.

But don't take my word for it. Sit down. Pull out a piece of paper and a pencil and make a list of expenses. Cross off anything that doesn't fall into the "necessity" categories: shelter (include utilities like water and electricity - but with the understanding that both expenditures can be reduced significantly with some lifestyle modifications) and food (which can also be reduced with lifestyle modifications).

That number, the cost of shelter and food, is the baseline - the absolute minimum that must be earned.

And then ask, could that money be earned doing something other than participating in an expensive commute and/or a low-wage corporate job?

As Yentl proclaims, "Nothing's impossible!" and working from home is an option for anyone who is willing to take that first, scary step through the wardrobe into the unknown. Who knows what riches lie on the other side?

6 comments:

  1. "Then, there is the cost of childcare, which will add $5000 to $11,000 per year to the cost of working outside the home - and that's just for one child."

    hahahhhahaha! Uh yeah, I WISH! Try $15K a year for one kid! But it's OK. I know what I signed up for and that's a cost I am willing to pay.

    I'd love to work from home and rumor is that the way the legal industry is going it will be that way in the future. However, until the older boomer attorneys start retiring or dying, it's not going to happen.

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  2. Daycare is definitely expensive, and the cost will vary depending on where one lives.

    Based on the information from this site $5000 to $11000 seemed about average. In Maine, a home daycare (which is usually less expensive) is just under $7000 for an infant and a center is just over $9000 for an infant.

    Make sure you're training those younger attorneys now, to think "home-based paralegal", or else they'll learn bad habits from their elders, and you'll be stuck in the office forever ;).

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  3. Interesting that you should post about this topic. Just this weekend NPR had a financial guy who explained that if one parent in a family made $40,000 or less, it actually cost them to have that parent work. "Work" clothes for parent, meals or meal money for parent and child, gas, childcare, etc....just like you stated.
    I've scaled down quite a bit on my "wants"....except for saving for my future parcel of land ;)

    Great series, Wendy!

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  4. I haven't seen this mentioned in the debate on working at home or away - when I worked for a large insurance company there was an 'event' almost every week that I was expected to contribute to - and the suggested amount was usually $5-$10. It was often for a birthday or moving to a new house, etc. And of course for the holidays it was more for gifts and/or food donation to other office workers. Since I was working because I had to I found this very difficult. I kept track and during my 13 months employment I had contributed $370.

    Now, when I worked at a trucking company we donated to a charity at Christmas and had a potluck party - no amounts suggested and nothing else during the year. The management knew we all needed to work and discouraged anything else.

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  5. Thank you, thank you, thank you, for the timing of these posts about working from home. I am a strong proponent of telecommuting and self-employment, but I sure felt better about it when I was pulling in a bigger paycheck by working for someone else via telecommuting instead of trying to make my own go of it. I caught myself making the comment "If I had made more with the business..." during several recent discussions with my husband about future options. This post, especially, reminds me of how much money we have saved by me not trying to work outside of the home - whether I was bringing IN cash or not.

    I needed that reminder, because I used to feel really good about how well we'd done this way before. Having a paycheck come in was sure nice, and not making the profit I anticipated has really gotten me down. THANK you. :D

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  6. @ Farmgal & Melonie - When I first started really researching at-home work, I was surprised by how small that paycheck had to be to actually make-up for what I could have been making if I'd been working outside the home - after we factor out all of the "work-related" expenses. I don't make a lot of money working from home, but because I've been home all of these years, we've saved at least $108,000 on the cost of daycare.

    The other benefit I didn't mention, but which applies to my family is that, because I was already home, we were able to consider, and then actually start, homeschooling.

    @ Bellen - Thanks for mentioning that. There's also the constant pressure to support some co-workers' kids' fund-raising endeavor - from Girl Scout cookies to wrapping paper, it just never ends, and the workplace is where most stuff, these days, gets sold.

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