There are numerous, readily apparent benefits to working from home: the ability to design your ideal work environment, avoiding a long commute and the increased freedom, just to name a few. Even though when I started working from home there were some hurdles to overcome, after 6 months I have never been happier, or more productive. In fact, I have a hard time even imagining returning to the office.
I probably won’t need to either. The company I work, like many companies that adapted during the pandemic, is not going back to a brick-and-mortar business model; why would they? Employees proved to corporate America that they can be just as productive from home, while saving businesses millions of dollars in real estate costs.
As working virtually becomes the norm, and it will likely become the standard for many industries, the ability of employees to earn more money is also increasing. This is both due to the fact that workers are no longer confined to the state, or even country that they live in for opportunities, but also because increased productivity affords people more time. As I get accustomed to the thought of spending the rest of my career working from home, my thoughts turn to how I can leverage this new-found freedom to increase my financial outlook. Especially, if I can do so without additional time or risk.
The top 5 reasons that working virtually will help you make more money in the long run.
1. Increased productivity frees up time
When you aren’t obligated to get up early to shower, dress, eat and commute, you save a lot of time that can be spent elsewhere. With time on your hands and the multitude of ways to make money online, it’s not hard to see how these pieces start to fit together.
Related: 15 Money Mistakes You Can’t Afford to Make
You don’t even need to pursue new opportunities in order to make more money working from home, with more time on your hands you can focus more on your full-time career to secure a raise or promotion. However you look at it, the ability to streamline your workload will equate to a higher net worth if you use your time productively.
2. Working from allows you to plan your life in the most ideal manner
Just as gaining additional time is a huge benefit to working virtually, the ability to control your schedule allows you to plan your career around your personal life, instead of the other way around. Of course this depends on the nature of your job; not every position is equally flexible. However, if you can adjust your work hours even moderately, you can work when you want to and maximize your earning (or sleeping) potential. For instance, if two working parents are at home, they can likely coordinate the care of their young children to save hundreds, to thousands, of dollars per month. The ability to plan allows you to do more with your time.
As people focus more and more on building revenue streams, rather than traditional, single source employment, traditional work opportunities will likely become more attractive for those who want to work from home. Hopefully the trend towards a greater work-life balance continues, because though money can sometimes buy happiness, time is our most valuable resource.
3. You can save a lot of money by not commuting
Aside from the money you will save by freeing up time, when not commuting for hours a day, you save a lot of money by simply using your car less. These days, my car has been mostly relegated to running errands and dropping off our kids at daycare, which has saved us hundreds of dollars per month in gas, maintenance and repairs, and insurance. Not to mention that it has helped us reduce our carbon footprint, the amount of greenhouse gases we produce.
4. Regardless of employer fears, there are fewer distractions at home than at work
The technology that enables employees to work virtually has been around for years. So, It seems like a no-brainer for businesses producing intangible services, to reduce rental real estate costs and allow the majority of employees to work from home. Then why haven’t we made this leap already? It seems that the hesitance to “mobilize” (if I’m allowed to ascribe new meaning to that word) work forces boils down to fear that businesses would be unable to motivate employees who are not in the office. This was largely disproved during the Covid 19 pandemic, at least in the companies I have examined, as productivity has actually increased. In his work-from-home survival guide, Financial Samurai estimates that you are: “twice as productive at home while also saving on commute time.”
Humans are social animals, along with our unique ability to reason, in a evolutionary sense, our social skills are crucial to our survival. So it’s no surprise that people are often much more social, and consequently less productive, when they are at work. I’m not espousing a lifestyle devoid of socialization, in fact connecting with people is often energizing to people and helps them avoid symptoms of depression. What I am saying, though, is that employees are more focused and less distracted at home and increased productivity typically equates to increased earnings over time, both for businesses and for employees.
5. Virtual workers are not confined to local opportunities
Perhaps the most attractive aspect of the trend towards more people working from home, is that employees are no longer limited by local opportunities. Expanding your job search across state and even country lines has never seemed so possible. And, with this increased reach comes the ability to make a lot more money. There’s little reason, for instance, that someone who is currently working from home in California, for a California company, shouldn’t be able to move to, Texas, where there is no state income tax, thus instantly giving themselves a 13.3% raise.
Here is a list of states that do not have a personal income tax:
- South Dakota
Income taxes aren’t the whole story though, many states without income tax make up for it with higher property taxes (like in Washington). In financial terms, you should focus on the overall tax burden of any state you plan to move to, and include cost of living comparisons. There are innumerable other factors that you should evaluate before moving to a new state, but if you can increase your financial outlook by moving, working in the “cloud” definitely makes it easier.
“There are innumerable other factors that you should evaluate before moving to a new state…” Yes, a slight advantage on your finances (if at all) may not account for the quality of life you may end up compromising for your family.