6 tips and tricks to save money while working from home

Whenever big changes occur, it’s a good opportunity to reassess all aspects of our lives, especially our finances.

Now that many of us have been working from home for a period of months, how could you better prepare for your future? Inverse reached out to financial advisors Douglas A. Boneparth, president of Bone Fide Wealth, and Sid Misra of Beacon Financial Group for their tips for people now working from home. Here’s what they had to say.

6. Budget (obviously).

“Take the time to review how cash flow has changed while working from home,” Boneparth said. “Go over the past four months of bills to see how your spending has changed from before WFH. This will help you understand if you actually are saving more money or just redirecting your spending to other categories.”

Misra stressed that budgeting means awareness.

“You need to be aware of where your money is going and how much you are spending in light of now working from home,” he said. “Factor in your rent, car payment, food expenses, subscription services, and entertainment costs. The math is simple. You cannot build wealth if you spend as much or more than you make.”

5. Hold a large cash reserve.

“We’re working from home because there’s been havoc in our country and economy,” Boneparth said. “That means uncertainty in almost every aspect of our lives. Having extra cash — nine to 12 months living expenses — can help you sleep well at night knowing you can be OK for quite some time before needing to use other financial resources.”

Misra agreed, adding that many people have little to no savings, forcing them to put expenses on their credit cards, with average interest rates over 20 percent. Especially if you’re looking to invest, make sure you have enough money in your emergency account.

4. Automate whatever you can.

“Now is the time to think about the future, so take advantage of automation to help with saving and investing,” Misra said. “The average person will spend what is available to them, so make less money available for yourself. If your company offers a retirement plan, contribute to it! Set up an automatic transfer program to move money from your checking to savings account. After a few months you’ll see how much your savings have grown.”

3. Protect yourself.

“See if you need additional liability or umbrella insurance for bringing your work home with you,” Boneparth said. “It’s always a good idea to assess what risks you’re exposed to, especially when such a time-consuming aspect of your life is now at home.”

2. Focus on yourself.

“Especially during hard times, it’s easy to read too much into ‘success’ posts on social media,” Misra said. “The reality is that these posts are a carefully curated snapshot of one moment in someone’s life. It’s the tip of the iceberg, and we don’t know what’s really under the surface. Perhaps this person has a ton of debt or is supported by their family. You will never be happy chasing external validation. Don’t set yourself back financially for years to come trying to keep up.”

1. Learn new skills.

“Now that many of us are working from our homes, it's a great chance to educate ourselves,” Misra said. “Personal finance classes are not a requirement in the US. Many people grow up not understanding how to manage their finances and this is a huge problem. While we can place blame on the system for allowing this, we must also take responsibility for educating ourselves.”