I travel a fair bit for work and when I do I get a set per diem each day for food. I get this money whether I spend it or not. This creates an opportunity to make money tax free. Saving per diems can add up really fast and boost your savings or debt payments.
Most companies give traveling employees a set per diem for food. It makes accounting a lot simpler by not having to process a ton of receipts. My company does this and I make it a point to never spend all of my per diem. I eat cheaply and bank the rest. I must also note that I do try to eat healthy with sandwiches, salads, soups, and the like. I don't eat McDonald's all the time to save money.
In my example I get $40 per day while on the road. Most hotels include breakfast so that is covered. I usually do $5 to $7 for lunch and try to keep dinner around $10. After tax and tip I should be able to bank about $20 per day. Traveling an average of 5 days per month means $1200 per year in tax free income!
I should also point out the indirect savings of traveling for work:
- You are not putting milage on your own car so you are saving in gas and maintenance costs.
- You are not eating the food at home (obviously) and they are paying for meals.
- While not home your utilities will be lower as you can turn most things off when you are gone. (savings on electricity, natural gas, and water/sewage costs)
- You can earn airline miles or points which can be accumulated and used for vacation flights
- You can earn hotel reward points to use for free hotel stays
- You can ear rewards points on your credit card for work related expenses that get reimbursed
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