In my last post in this series, I addressed some general pros and cons with an emphasis on “Social Senarios” I’ve observed over the last seven years. These may help you decide whether working from home is right for you.
In this installment, I talk about the pros and cons of finances, one of the most important aspects of working from home.
As I’ve explained in a previous article, working from home—at least for me as a freelance editor—means I kiss a regular paycheck good-bye. This was a tough adjustment for me at first, but now I’m grateful and wouldn’t have it any other way.
Nope. There’s no direct deposit every two weeks. I get paid by completing each project, and I complete projects based on deadlines. When I get a project done, I invoice a client and wait for the check to arrive in the mail (though one client pays me by direct deposit).
Pros: Since I’m paid by the project, I decide how much I want to work and how much money I want to make (at least to some extent). I truly believe that when folks are responsible for reaching their own financial goals this way, they will work harder and be more productive. And if God has called you to this life, He truly will provide.
Cons: I have to purchase my own health insurance (about $232 per month pre-ObamaCare), computer equipment, office supplies, and so forth. And yep, coffee and lunch are on my dime.
Pros: There’s no drive to work during a snowstorm, no “work” clothes to purchase, and less wear and tear on my vehicle. In fact, due to my working from home, our household went from two vehicles to one (no need for a second vehicle). We save a lot of money on vehicle expenses like repairs and auto insurance.
If you establish a formal home office (as in a dedicated room), you may be surprised by the tax deductions you qualify for when you’re self-employed. I can write off some of my electric bill, and we even qualify for a home-heating credit.
And about those business expenses . . . If I need to purchase a new computer, I can deduct that work expense from my taxes. Don’t forget about this important perk.
Cons: If you tend to get anxious about finances, this may not be the job for you. You will need to be self-motivated and disciplined on a calendar to balance various projects and hit your monthly income goals.
Because the work-at-home pool is growing, finding the better-paying projects can be competitive and sometimes difficult. Projects tend to be low paying at times for the time required; however, the more quickly I can get them done, the more income I can make. I decide.
That being said, I generally make less money per hour than my last job at an educational institution, so I do spend more time working than I used to. Sometimes the workload can demand evening and weekend hours. Sometimes I really put in the hours, but remember, I don’t need to go anywhere.
There’s no company 401k. No paid overtime. No paid sick days or holidays. If you don’t work, you don’t get paid. But . . . if you make extra income during a particular month, those funds may allow you to take a vacation, for example.
Because of the lack of face-to-face business connections, you may find some questionable clients and get stung. One client from five years ago still owes me more than $1,000, which I will probably never see. Yes, taking on clients can be a step of faith. (One solution to this problem would be to invoice clients and refuse to do work until the money is in hand.)
Pros: Because so many companies are cutting back on full-time positions and downsizing due to ObamaCare and other economic reasons, there are more opportunities now than ever before. It’s a great time to work at home.
Companies who hire you don’t need to pay for your insurance or computer equipment because you supply those resources. Their gain is your gain. They save money by hiring you, and you get to stay home while making money. It’s a win-win.
There’s no long commute to work. I just get dressed, brush my teeth, comb my hair, and go downstairs to my home office—it’s a cinch. I used to drive an hour and a half each day to work (that’s seven and a half hours per week on the road!). I save lots of money on gas I no longer need to buy.
So yes, I do make less money per hour than I used to, but my out-of-pocket expenses are much lower. And the perks more than make up for the drawbacks.
That it for this installment. Have questions? Please comment, and I’ll get back to you.
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