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Smart Money Steps if Remote Work Is Becoming Permanent
During 2020, many people were forced by the pandemic to switch to remote work. Office workers, programmers, journalists and many others suddenly found themselves no longer going into the office and instead figuring out how to do their work from home, often completely on the fly.
For some, a return to pre-coronavirus work habits has already occurred or is on the horizon. For others, however, this has turned into a more permanent situation. Many employers found great success with remote work and recognized that it can be a huge boon for their business to cut back on the expense of maintaining an office.
For the first decade of my professional life, I worked in an office environment with a 20- to 30-minute daily commute. Starting in 2008, I have worked entirely remotely, mostly from home. As I began to realize that this shift was likely permanent, we began to also make some permanent changes to our finances in response. The following steps were the ones that really paid off.
Have a large emergency fund
This is always a good idea, but it’s even better in a post-coronavirus world when you’re working from home. You may find yourself adjusting to new expenses, including professional ones. You may experience some bumpy periods when it comes to employment, particularly as the economy reshapes itself.
In short, any transition should be a period in which you have a larger emergency fund, and as we transition into a post-coronavirus world and you transition into permanent remote work, you should have one, too.
So, how do you build an emergency fund? You don’t actually need a big pool of cash to get started. Instead, consider starting with just a little amount from your checking account and set up an automatic small weekly transfer to your emergency fund. Set up your emergency fund using a savings account at a reputable online bank (so that you’re less tempted to tap it) and simply have that new bank transfer a small amount automatically from your main checking account each week.
What did I do? We maintain an automatically funded emergency fund, much like what is described above. We never turn off the automatic transfer. It typically has at least a few months of lean living expenses in the account.
Extend the lifespan of your car
One big shift for people who move from an office environment to a home environment is that you’re no longer commuting. For many, that means that a car that once served as a daily commuting tool, requiring fuel and maintenance, now sits in the driveway or parking lot instead, used only for getting supplies or going out.
While this is an obvious cost savings in terms of fuel, consider also that this is likely extending the lifespan of your car. You’re putting fewer miles on it each year, which means that the replacement cycle is longer. For example, if you previously replaced a car every five years, and now you’ve halved the miles you’re putting on the car, you’re now on a pace to replace it every 10 years. If you save up to pay cash for a car instead of using debt, you can now save half as much each month. This is a perfect opportunity to stop using leases and car loans to pay for your car.
In some situations, you may even consider downsizing the car. If you live in a place where most of the services you need are close by and you have access to mass transit, do you need a car outside of a couple times a year? Could a car rental service take care of you in those rare situations?
What did I do? We essentially kept our previous car-buying routine, which was to buy late model used cars, stick to the maintenance schedule, and drive them until they wore out and became unreliable. Remote work simply extended the lifespan of our vehicles, meaning the cycle of replacing cars was much longer than before (extending from about six years to about 11 years).
Consider moving to a lower cost of living area (with some caveats)
If you can move to a place where you can buy more home for your dollar or the rents are lower, that gives you substantially more financial flexibility going forward.
There are risks with this, however. You need to ensure that you’re moving to an area that provides the resources you need to be successful. If you’re considering moving to a lower cost of living area because of the freedom afforded by remote work, also consider the following.
You’ll need good internet access. In fact, this is vital. You need to evaluate the state of internet offerings in the communities in which you’re considering moving. Is there a highly reliable high speed internet service in that community? This is essential. Do not assume that the service will be as fast or as reliable as what you have now.
You’ll need to consider services and cultural features you consider essential. What things are truly important to you in terms of how you live your life? What are your hobbies and passions that rely on social structures and communities for enjoyment? What services do you require? Don’t include everything you want, but consider what would be make-or-break for you. Then, use those as a filter for deciding where to live.
What did I do? We moved to a community that had strong residential internet service with relatively low cost of living and fairly close access to the Des Moines metro area.
Develop and invest in a devoted workspace at home
For many people who fell into working from home in 2020, finding a spot to work at home was tricky. Many people co-opted kitchen tables or the ends of couches or other uncomfortable spaces to work. While this is fine for short periods, it comes with several problems. One is that it’s not particularly ergonomically healthy to work in those spots for the long term, as they’ll eventually contribute to neck, back and wrist problems. Another is that a multi-use space does not psychologically indicate to you that you should be in “work mode.” Yet another is that a multi-use space does not put your work supplies in a convenient place.
If working from home is going to be a long-lasting situation for you, invest in converting some spot in your home into an ergonomically sound spot devoted to work — a true workstation. Invest in a small desk, an ergonomically healthy chair, shelves if you need them and so on. Make this spot devoted to work, so that you’re in a work mindset when you’re there. This is an investment in your health and in your future productivity, so that this becomes a long-term sustainable thing.
What did I do? While our children were young and it was easy for them to share rooms, I used a spare bedroom as an office. Later, I converted a corner of our basement into a devoted workspace, which features an adjustable standing desk (which I mostly leave in the standing position). When I’m in that spot, I work, and that becomes a mental trigger for work.
Identify low-cost alternate places to work, too
One of the advantages of remote work is that you can in fact vary the place you work. It’s usually convenient to work from home, but there is a lot of value in changing your environment sometimes.
The easy answer to this is a coffee shop environment. Just finding a comfortable coffee shop and setting up shop there for a few hours can be a great change of scenery that fuels work. You might also consider shared workspace businesses that are designed for remote workers.
The problem with both of those options is cost. At a coffee shop, you’re expected to buy coffee. At a shared workspace location, you’re required to pay some sort of cover charge for using it.
A much better approach is to identify spots where you can work outside the home without extra expense. Some suggestions:
- A local park with a shelter house, or even in an open space or in the woods. If you have a wifi hotspot or your phone can serve as one, this works wonderfully.
- A local library. This not only provides free wifi, but also provides lots of research materials.
- A hotel lobby. This is a good spot to “people watch” and you’ll typically be ignored or seen as a business traveler.
- A museum with free admission. This is another spot to “people watch” and often includes wifi, although you’ll want to use a VPN for your data protection.
- A shopping mall. Again, it’s a great place to “people watch,” usually isn’t busy at all during the middle of the day on weekdays, and often has wifi.
What did I do? I often use two different local libraries for working (at least, prior to coronavirus). I also use three different local parks within walking distance, one of which is almost always completely empty and the other two only occasionally have walkers and joggers. This gives me a variety of spaces to work for free.
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