How to Calculate Your Work From Home Budget
Many people mistakenly believe that working from home means not spending any money. While you may be spending less money, a number of expenditures are associated with a work-from-home job or business. Developing a work-from-home budget can help you to manage expenses and income and serve as a reference point for paying taxes or growing your business.
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Instructions
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Determine your monthly expense by adding all yearly expenses for your work-from-home job or business and dividing the total by 12. These costs might include professional licenses, phone book advertisements and web hosting, for example.
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Write all monthly or weekly expenditures below the yearly expenses. Separate these into exclusive business expenses and shared expenses. For instance, a separate business phone line or Internet service used solely for your job or business is an exclusive expense, whereas a portion of the electrical/heating bill paid for the entire home, including the home office, is a shared expense. For shared expenses, a good rule of thumb is to identify one quarter of the total bill as a business expense.
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Divide the total of one-time and infrequent expenses by 12 to obtain a monthly expense amount. A new computer is an example of a one-time expense that must be budgeted. A supply of paper or ink cartridges purchased every 3 months is an infrequent expense that must be budgeted as well.
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Add all expenses to determine the amount of monthly expenditure required by your work-from-home job or business.
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Compare expenses to the amount of income being generated. If expenses are smaller than income, you are making a profit and working at home is a good idea. If your expenses are greater than your income, identify areas where you can save money or consider an alternative job or business.
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