Whether relocating for a job or just seeking greener pastures, a big move brings major money shifts. Getting finances organized early makes the transition way smoother.
Calculating Moving Costs
Long before packing those first boxes, crunch the numbers on moving expenses like:
- Hiring professional movers or renting a truck.
- Temporary housing if there is an overlap.
- Travel costs like gas, lodging, and meals.
- Deposits for utilities and other new services.
- Purchasing packing supplies.
Average moving costs within the same state run $1,000-$5,000. Cross-country moves are $4,000-$10,000 on average. Build a reasonable cash cushion to avoid sticker shock.
Housing Costs at Your New Spot
The biggest money factor when moving is your new monthly housing payment. Research rental rates or home prices in your desired neighborhood.
The people at Denver based Mortgage Maestro recommend getting pre-approved for a first time or conventional home loan if buying. This helps gauge your max home price based on factors like:
- Income and employment.
- Current debt.
- Credit history.
- Projected mortgage rates.
Build a budget using realistic home costs, rental rates, average utility bills, etc.
Don't Forget Furniture and Decor
Especially when up-sizing, renovations or buying new furniture quickly adds up. It may be that you are ditching outdated pieces or need to fill extra rooms at your new place.
Set aside funds for sprucing up window treatments, fresh paint, light fixtures, and decor that makes the new house feel like home. Also think about lawn equipment if moving from an apartment.
Factoring in Employment Changes
If you are staying with your current employer, negotiate relocation assistance if it is available. Many companies provide funds to ease the moving burdens on star employees.
If you're getting a new job, understand timing around last paychecks, 401(k) rollovers, benefits eligibility periods and other human resources details. You may need a cash reserve to cover income gaps.
Don't underestimate job search costs either if you're relocating first. Budget for things like new interview attire, resume services, temporary housing, and transportation getting around to interviews.
Planning for New Taxes and Cost of Living
Research income, property, and sales tax rates in the new area compared to what you currently pay. Higher earners could get a shock moving from low- to high-tax states.
Overall cost-of-living differences make a significant impact too. Use an online calculator to estimate how far your current income stretches in the new locale.
Decide if adjusting tax withholdings from each paycheck makes sense until you understand the full impact.
Don't Forget About Your Nest Egg
A major move can also affect your long-term savings and investments. If you own a home in the current location, decide whether you'll be keeping it as a rental property or selling it. Account for potential capital gains taxes from selling.
For taxable investment accounts, make a plan for transferring these over to a new bank, brokerage firm or financial advisor if you'll be switching. Avoid accidentally creating taxable events by taking the proper transfer steps.
Setting Up New Services
Notify lenders like mortgage holders, banks, credit card companies and student loan servicers about your impending move at least 30 days ahead. Provide new address details to continue getting statements.
Forward or cancel other services like cable/internet, trash pickup, landscaping, etc. Research what's available at the new place and get set up in time.
Make lists and a schedule indicating what needs to be updated or set up from utilities to car registrations. Spreading those tasks over weeks reduces overwhelming "final stretch" difficulties.
Conclusion
With solid savings, conservative budgeting for new living costs, and an organized approach to splitting obligations between locations, any relocation anxiety melts away. Since even local moves cost thousands on average, smart money management prevents cash crunches.
