Working from home can be a great way to reduce costs. It also allows you more time that, for many people, can equal money on the long run if used to generate more business or do paid work. But not all jobs that can be done from home are equal. Some may actual end up more costly than they initially appear.
That is why when you’re considering a home-based job, there are many money points that you must investigate and consider as part of the financial package. Don’t model your decision based on someone’s job or experience. In addition, you must make sure that you’re fully aware of any potential costs from big expenses such as required licensing and equipment to running costs on items that you just need to get the job done.
With that in mind, think about the following points as part of your decision-making process.
Freelance or telecommute
People who work from home can be freelancers (working independently and not affiliated with one particular company), or they can work for a company but in a position that doesn’t require their presence in the office.
The two scenarios can be very different in terms of the costs involved. For example, working as a freelancer in the UAE requires you to get licensing, which can run into thousands of dirhams every year to maintain. Does the work that you anticipate justify this sort of cost? In addition, in some countries, freelancers may be still required to pay taxes and other sorts of social security payments. Because they don’t have an employer, they must take care of their own health insurance coverage, which probably will be much higher than what you get from an employer.
All of this must be considered you’re looking into the amount of money that you anticipate to make. Being a freelancer is similar to running your own business. In you look at the revenue without considering the expenses, you’re totally miscalculating your net income.
Telecommute positions are often different, however. If you’re employed by a company, you probably will be on a payroll just like when you work in an office. You probably will still have access to employer benefits, especially I you work full time. These jobs won’t require you to manage business licensing of running costs. The company may even cover the costs of your equipment (computer, phone, etc), and provide other support such as with IT issues.
Perceived savings
Before you start a job that can be done from home, you may think of many areas of potential savings that don’t turn out to be realistic. For example, many parents think that they can totally save on childcare because they work from home. If they work a set number of hours similar to office hours, this plan may not be possible. Young children may require constant attention that makes taking care of the children and getting the work done simultaneously impossible. Getting some help or placing children in a day care becomes a cost that you’ve planned for initially.
Similarly, you must account for all the costs that will come from working from home. Will you be buying your own stationary? Do you need additional equipment (printer, scanner, additional phone line, etc)? Who will cover the costs of work-related phone calls, and will you need a separate phone line? Will you be using your own car for business? All of these costs may offset any savings that you think you’re making by working for home. That is why you must explore and be sure about the exact costs that you should anticipate.
Future costs
If you are working from home as a freelancer or in a telecommute job, you also must consider how you will handle potential increases in costs. For example, if you eventually will have to move to a larger apartment to have sufficient space for your home office, that can be a major cost. On a much smaller scale, will your pay potentially increases in line with inflation?
These questions, again, may be overlooked in the initial consideration of the comfort of working from home. But only will you take these into your calculation from the get go, you will be able to negotiate a package that is fair and covers your current and future costs.
