Just when many of us had settled into working in cozy sweats with a handy "Zoom top" nearby, return-to-office mandates started rolling in. In fact, some major employers now require in-office attendance, with others likely following suit.
Remote and hybrid work, adopted out of necessity during the COVID-19 pandemic, brought employees flexibility and convenience. Now, as companies rethink the balance between remote and in-office work, employees must navigate how this shift impacts their budgets.
And the difference can be substantial: One survey found that hybrid workers spend $61 daily when working at the office, compared with $19 at home.
For some, the change is unavoidable. Others can weigh the trade-offs, considering work satisfaction, life balance and financial implications. Read on to explore the key considerations.
The Rise of Work From Home (WFH)
While remote work had already been an option for some, it became far more prevalent when the majority of workplaces shuttered their physical locations in 2020. And in many cases, this new way of working persisted. A survey from the Pew Research Center found that 35% of workers with jobs that can be done remotely were working from home all of the time as of March 2023, up from only 7% before the pandemic.
Those who can remain in a virtual environment cite a number of benefits, including flexibility and work-life balance: Employees can often create schedules that accommodate their personal needs, whether it's ferrying children to school or running errands on their lunch break.
A home office eliminates a lengthy and stressful commute, saving time and money. And many find that remote work offers a quiet, distraction-free environment, which can lead to increased productivity and better focus.
However, the tide may be turning on companies' permissiveness: The KPMG 2024 U.S. CEO Outlook survey report found that 79% of CEOs believe employees whose roles were traditionally based in the office will return within the next three years.
The Impact of the Return to a Traditional Office Setting
What's behind this move back to the office? Employers may hope to inspire in-person collaboration and improved company culture.
Interestingly, not all workers prefer remote setups. One survey found that only 28% of respondents favor fully remote work, while 40% prefer fully in-person and 32% prefer a hybrid schedule.
Face-to-face interactions can offer opportunities to build connections and cultivate relationships with colleagues and mentors. These in-person interactions can spark spontaneous conversations and a sense of camaraderie, which may be harder to replicate in a virtual setting. Newer employees can also benefit from observing seasoned professionals in action—especially during high-stakes presentations or client interactions.
In-person workers may also boost their chances of career advancement. Managers often express greater confidence in the leadership and communication skills of in-person employees, whose increased visibility can translate into access to coveted assignments.
While the flexibility of WFH is appealing to some, others may find that returning to the office provides a clearer boundary between work and personal life.
Weighing the Costs of Each Type of Work
While your job provides financial rewards, it also comes with expenses that can eat into your bottom line. The financial implications associated with a home versus office environment may be one factor that helps you determine the best situation. Here are the key costs to consider for each setup.
Expenses associated with working from home
Working from home might appear “free," but there are various expenses that can add up and impact your overall budget, such as:
- A home-office setup: This may include a desk, chair and computer, along with a printer, scanner and other necessary technology.
- Software and productivity tools: If the employer doesn't provide these, they must be funded independently.
- Increased utility bills: With more hours at home comes rising energy consumption for lighting, heating, cooling, internet and other electricity needs.
- Higher grocery bills: Your budget may feel the effects of stocking up on lunch and snack items, particularly if subsidized beverages and meals were previously provided at the office.
Some employers may provide a stipend for home-office and other work-from-home expenses, so check with your HR department.
Expenses associated with in-office work
Commuting to an in-person job involves time management challenges, but also costs, including:
- Transportation: Driving to the office may include paying for fuel, tolls, parking and vehicle wear and tear. If you're taking public transportation, fares can add up. Workers estimate they spend $27 on their commute and parking.
- Office attire: Say goodbye to sweatpants—building or refreshing a professional wardrobe can be a significant expense, especially if you're starting from scratch.
- Meals: Buying lunches or snacks daily can add up quickly, especially if you work in an area with limited affordable options. In fact, workers estimate they spend $34 on breakfast and lunch when working in the office. Long commutes and tight schedules can make meal prepping difficult, increasing the temptation of takeout.
- Additional childcare: While many remote workers already have childcare, commuting may require additional coverage, such as before- or after-school care, due to longer workdays.
Building a Budget for Your New Work World
If you already have a household budget, factor in the costs for each area mentioned above. No budget yet? Now is a great time to make one. (This article offers tips to get started.) Track your expenses for a month to get an accurate picture of your spending, and be sure to review and adjust your budget regularly as needed.
Whether you're saving money by working from home or receiving a stipend from your employer, having the right banking products can help you manage your work-related expenses effectively. Here are some options to consider:
- High yield savings account: If you receive a stipend or save extra dough from WFH, park that money in a high yield savings account to earn interest on your deposits while keeping the funds easily accessible.
- Credit card: For work-related purchases, consider a credit card that offers cash back rewards.
- Money market account: Whether working from home or the office, an emergency fund is essential. A money market account lets you earn a competitive interest rate while keeping your funds liquid for unexpected expenses.
- Certificate of deposit (CD): If you have a lump sum stipend or savings, consider putting it in a CD for a more competitive interest rate than a traditional savings account.
READ MORE: What is a Money Market Account and How Does it Work
The Bottom Line
As the modern workplace continues to evolve, some employees have the privilege of choosing where they work, whether from the comfort of home or in a bustling office environment.
Productivity and job satisfaction can vary greatly depending on your individual needs, work style and preferences. Consider how your work setup impacts your lifestyle and budget and find ways to create a work situation that supports your overall well-being and financial stability.
Looking for more tips on how to save money on everyday expenses? Read 12 Frugal Living Tips to Help You Save More Money.
