Do This, Not That: Managing a Work From Home Budget
Managing your finances while working from home full-time can bring in some unique challenges. Unexpected home office expenses can certainly take a toll on your finances and mental wellbeing. However, being at home may also give you the needed extra time and flexibility to re-evaluate your budget and properly manage your money. Further reviewing your financial situation and having a monthly budget can give you greater financial security in the long-haul. Follow along on some of our do’s (and don’ts) for making sure you set yourself up for work from home financial success.
Do: Take a careful look into your necessary expenses
The first step every budget-savvy person should do is to take a careful look at how much they’re spending every month. For those working from home, it’s important to remember that your bills will likely be different than what they were before working from home. For example, your utility bills will likely be higher since you’re spending more time at home, which may require you to take a look into ways to lower your energy usage. Taking a close look at all your spending will give you a clearer picture of what adjustments you need to make going forward and make managing your finances that much easier.
Don’t: Assume that you’re not overspending
For some, it may be easy to assume that your spending is fine the way it is and that it doesn’t need adjustments, whether you’re working from home or not. To assume you’re not overspending and turning a blind eye on your expenses will be a detriment to your budget and could prove risky when you get hit with additional expenses in the future. Even if your home office expenses and monthly bills are well-managed, it’s never a bad idea to double-check!
Do: Crack down on fees you may be getting hit with
Monthly fees are everywhere, and they could be a cause for concern to your wallet. When taking a look at your expenses, you may notice that you have monthly maintenance and overdraft fees from your bank. While a few dollars a month may not seem concerning, this can add up quickly! Consider signing up for a no fees spending account to allow yourself to save up a little extra and take the stress out of managing your finances. Even if it’s only a few dollars a month, having some extra money to save will be sure to add up over time!
Other fees you may be dealing with can include monthly subscriptions that aren’t used frequently, such as streaming services or gym memberships. Listing out all your wants and monthly subscriptions will allow you to make decisions about them and cut down on those you may not need, leaving you with more room for other wants and needs, such as home office expenses.
Don’t: Stick with the status quo because of convenience
Sticking to the status quo and not canceling or switching over memberships may be less of a hassle, but it can also leave you with little spending money for what matters most. Even if it’s only once or twice a year, re-evaluating where your money’s going can be a huge relief on your mental wellbeing and allow you to spend more time focusing on work or relaxing.
Do: Think long-term
Thinking about the future can be a cause for stress. But when it comes to money management, it’s crucial to keep a long-term approach at the top of your mind. Managing your budget means making sure you’re prepared for everything from unexpected medical emergencies to retirement. If you don’t already have one, be sure to create a plan for your retirement and know where your future money is going to come from. This will not only give you financial peace of mind but will also allow you to make needed adjustments to your budget.
Don’t: Leave your finances in the present
It’s easy to allow your mind to stay in the present. However, this type of mindset is dangerous because it could lead to not having enough money saved up for emergencies or retirement. While a present mindset may serve you well in certain situations, money management should always be looking toward the long-run.
Do: Set a monthly budget and stick to it
Once you’ve taken a look at your expenses and adjusted accordingly, now it’s time to set a monthly budget and stick to it! Setting yourself up with a monthly saving strategy and sticking to it consistently will allow you to see where you’re struggling financially and make smart decisions on where to adjust your spending. Be ambitious and really try to save up as much money as you can. For most, home office expenses are covered through a stipend or simply don’t take up much of the budget, so take advantage of not going out as much to save aggressively for the future.
If you’re struggling with keeping all this information organized, fear not. There are plenty of online tools and budget templates available to use. Having and using these tools will force you to write everything down and ensure you’re truly sticking to your budget.
Don’t: Vary your budget every month
What’s the point of a budget if it’s not stuck to consistently? Varying your budget based on the month or not writing down your progress each month is a recipe for disaster. While sitting down every month and tracking your spending can be a pain, it will allow you the financial freedom of knowing exactly where your money is going and how you can make adjustments in the future. Of course, changing up your budget every once in a while is perfectly fine, but not having the information laid out will result in poorer decision making and hold you back from financial success.
Setting up a monthly budget can be tricky towards the beginning of the process, but once you have a routine down, it will set you up for long-term success. Working from home allows you the time to dig into your finances and make the necessary adjustments to your spending habits. Now it’s time to crack down on your finances and get to it! Believe us, your wallet will thank you later.