The reason we set up a home office is to replicate the work environment we’re getting away from. Unfortunately, a lot of work from home people bring the financial challenges, of the business, with them.
They try to match, dollar-for-dollar, their old cubicle. Soon, a good chunk of their income is going toward things you either don’t need or spending too much on.
This article will cover five things you must do to create a financially efficient home office.
#1: Cut down (or eliminate) software
There are a lot of free alternatives to the common, business software you’re using at home.
Do this: Search for “Open Source” + Software Alternative.
Adding “open source” will help you find actually free software — not ones with limited trial runs or are bloated with ads (or even malware).
Else, turn to SaaS.
It takes a bit of fiddling with but you can port over existing files and software setups online. This saves on recurring software costs and also lowers costs having to keep hardware constantly up-to-date.
#2: Merge work and entertainment as one
Some work at home people can turn off the distractions — I’m not one of them and I doubt you’re only on your computer for work, either.
There’s no reason to fight it — but you can save money by merging work and entertainment with cheaper DirectTV packages. This will let you run your favorite shows off to the side.
You’d think it to be distracting but the nice, background noise helps a lot of people focus on work. Plus, it’s fun to take a break to recharge and come back to the tasks with full force.
#3: Network and negotiate kickbacks
We’ve already covered ways to save money by negotiating. But, what if you took those skills and applied it to your networking and business reach?
- Request needed products in exchange for a review
- Trade services vs using finances as a middleman
Plenty of small businesses would love to trade. It’s a win/win scenario for both parties because taxes aren’t involved. Plus, it builds great, business relationships.
You could use your art of negotiation to foster these opportunities. Often, all it takes is a nice phone call to a local product or service provider.
Doing so could save you hundreds (even thousands) on the normally paid, premium items you use to operate.
#4: Set up for tax deductions
Deducting the home office on your taxes is a bit tricky because it’s easy to blend the line between work and personal use.
However, if you’ve set up in a separate room — and dedicate it to work — then you’ll likely pass the requirements for home office deductions.
This actually creates a two-fold benefit to saving money when working from home:
- You’re more aware of your expenses/write-offs
- You’ll likely plan better
It’ll put you in a mode where frugality and business begin to blur. You may opt for second-hand office furniture or older software to avoid high costs; or, maybe you finally do an upgrade because you know it’ll come off during tax season.
It’s hard to judge where technology will go in the coming years (let alone the next few months). Many work from home professionals will spend money for in-the-now hardware or software to get the job done.
Unfortunately, these items are soon replaced by better alternatives or if they’ve broken along the way.
Invest in quality equipment:
- Sturdy computer chair
- Top-branded desktop or laptop
- Quality office furniture
Go for the long-haul with your business. It may require higher up-front costs but the quality will help you save thousands throughout its operations.
Also… avoid following tech trends.
There are plenty of hardware, software, websites, and business “one-offs” that look good now but go belly up after a few months.
Stick to the brands that have shown longevity. And, if you do decide to follow a trend… at least let it mature before making an investment.