Working from home certainly has its benefits, and the opportunity to save money is a big one. Just how much cash are we talking about? Obviously, it depends on factors such as your commute, your tendency to either buy lunch or pack your own, and your wardrobe maintenance needs (think dry cleaning and the like). But if your manager is willing to give it a shot, working from home could be the one thing to really change your financial picture for the better.

How much do you stand to save?

The most obvious form of savings in a work-from-home arrangement is not having to pay to commute. According to data from Quartz at Work, here's what you might save annually on driving costs in a number of major cities by working from home full-time:


Annual Savings (Driving Costs)





Los Angeles











Of course, not everyone drives to work. If you're used to taking public transportation, here's what you might save by forgoing that monthly transit pass, according to data from Lending Tree on the average yearly cost of public transportation:


Annual Savings (Public Transportation)





New York








San Francisco



And then there's the cost of prepared food to consider. This data is trickier to aggregate, as prices vary tremendously from city to city. But let's assume a store-bought lunch costs $10 on average. Since food establishments typically charge a 300% markup, that means you can prepare the same food yourself for just $2.50. If you typically buy lunch every day, you're therefore spending an extra $37.50 per week, or $1,875 per year, on food, assuming you work 50 weeks out of the year.

Of course, you're not obligated to buy food for work the same way you're forced to pay for commuting. But it's a habit many folks get into nonetheless.

Man working at a laptop in a room with a couch


And let's not forget the cost of purchasing and maintaining a business wardrobe. Sure, you'll still need to wear clothing if you work from home, and possibly even professional clothing if you do a lot of videoconferencing, but it's safe to say that you'll save some money by not having to buy new pieces and dry-clean as frequently. In fact, if you typically spend $100 per month to update your wardrobe and another $100 on dry cleaning, and you're able to slash your costs in half, you'll pocket $1,200 a year.

So let's pretend you live in D.C. and are able to bank an extra $2,844 annually by not commuting, another $1,875 by not buying daily lunches, and an additional $1,200 in wardrobe-related savings. All told, you're looking at $5,919 of extra money. Talk about a windfall.

What to do with your savings

If you're fortunate enough to get the option to work from home on a full-time basis, you'll want to make the most of the money you pocket. Your first goal should be to fund your emergency savings, especially if you're among the 57% of U.S. adults with less than $1,000 in the bank.

Once you're set on immediate savings, you should take the money you're pocketing and use it to pay off any credit card debt you might be carrying. Remember, credit card interest can compound daily, so the sooner you knock it out, the less money you'll waste.

Your next priority should be to use your newfound savings to fund your retirement plan, whether it's an individual retirement account or a 401(k). Currently, workers under 50 can set aside up to $5,500 a year in the former and $18,500 a year in the latter. These limits increase to $6,500 and $24,500, respectively, for those 50 and over. Now your work-from-home savings probably won't allow you to max out a 401(k), but based on our example above, the money you pocket could be enough to max out an IRA and then some if you're under 50, and get close if you're 50 or older.

Finally, you can use your work-from-home savings to meet other goals, like buying your first home, improving your current living space, or paying for college. The opportunities are endless, but the key is to make the most of that savings rather than spend it frivolously.

Remember, working from home is a terrific perk, but it isn't a given; you never know when your company might decide to scrap the policy and bring more bodies back into the office. So if you're saving money at present by working from home, you might as well make the most of the opportunity while you can.