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How Moving Can Affect Your Finances

Whether you’re moving to another city for a job opportunity, love, or you’re looking for a change in setting for various reasons, there are certain questions regarding your finances that you need to ask yourself before you commit to it. Having a budget is always a good idea when moving, but you’ll also want to research just how your new location is going to affect your wallet. Plan the expenses the move itself is going to cost you, as well as the expenses of living in another city – and you’ll avoid a potentially hazardous situation where you’re running out of money in a completely unknown setting.

This article will take you through the usual costs of moving and what effect they may have on your overall budget.

How Does Cost of Living Compare to Your Current City

Okay, you probably already know that life in NYC is more expensive than living in Georgia, but for the purpose of moving to another city, you’ll have to be more specific than that.

You can use a cost of living calculator to check exactly how your city compares to the one you’re planning to move to. Just input the city you’re currently living in as well as well as the city you’re moving to and you’ll get the comparison for food, transportation, entertainment, clothes, personal care, and housing. You’ll also get the overall estimate which city is more expensive and how much, which will of course vary depending on your lifestyle.

If you already have a job offer in the city you’re going to, it might be a good idea to check what you can get for that money in that city, compared to what you already get in your city for the amount you’re being paid.

Sales and Income Taxes

Different countries have different taxes and you’ll be especially interested in these if you’re planning on settling (buying a property) in another country. You can check out how countries rank by taxes if you’re moving abroad, or you can look around for taxes in different states if you’re moving interstate. Taxes can really affect what you can do with your money, as well as how much you’ll have to pay from your overall income. Keep in mind that some countries might have a higher tax rate, but do offer a cheaper (or free) healthcare, so they might actually be cheaper than some other countries.

Housing Costs

We already covered some of this issue in the first paragraph, but since it’s such an important factor you’ll want to take a deeper look at housing costs in the city you’re moving to. Are you going to be renting an apartment, or you’ll be buying a home? Whichever option you go with you’ll need to estimate how much it will cost you each month in order to be able to plan out your living costs. Without this, you’ll never be able to predict what your standard of living will look like, so take your time and do it right. If you’re more of an adventurous type, you might want to rent a shared apartment until you get on your feet.

Job Market

You should be interested in this one even if you already have a job secured in your new location because you never know what the future holds. How’s the unemployment rate in the city you’re relocating to? Maybe there are job offers you haven’t even considered before but are becoming viable now. Knowing the job market and how easy or hard for you would be to find a job is also important for your current position, as you’ll have a better time negotiating a raise in salary if there are other opportunities waiting for you out there.

Relocation Costs

Moving to another city can be quite expensive, so make sure you’ve planned it well enough to avoid any unnecessary expenses. If you already have a job or a job offer, ask your employer if the company would cover some or all of the expenses of your relocation. If they don’t, you’ll be spending quite a lot of your own money and if the reason for your relocation is a job itself you might want to reconsider. Storing some or most of your stuff is also viable and might actually save you the money you’d otherwise spend on transportation of the stuff you don’t really need. If you want to temporarily store some of your stuff, you can always opt for supereasy storage as it can provide you with a secure space for all your belongings that you won’t be using for the time being

Schools

This one’s really important if you have kids or you’re planning to have kids. Even for people who don’t consider having kids, this can be quite important because it affects the resale value of your home, as well as how much you should be paying for it. Find as many school districts within a reasonable distance of your home and check how it all looks like. What do the parents from that community think about the quality of education? You should also know what the student-teacher ratio is for a better understanding of education in that area.

Financial Services

Remote banking has never been easier than today, but that still doesn’t mean you’ll be able to use the same bank and credit card if you’re moving abroad. There are certain foreign laws that sometimes prohibit U.S. banks and/or investment companies from operating within their borders.

Get a sense of how financial services operate in your new location. Is there a bank you’d like to be a part of? What are their credit card fees and can you sustain them with your current job? If you have to move to another bank, it’s usually best to do it in advance and in person.

Have a Backup Plan in Place

Everyone hopes that after they move everything will work out fine and they’ll be able to improve their way of living compared to the previous stage in their lives. This isn’t always so, and you might run into obstacles in your new location that you couldn’t possibly predict or plan for. Maybe it’s a bad neighborhood, or you just don’t enjoy working in a smaller market for longer periods of time. Maybe you’ve moved in with a partner but that’s about to end as well. For situations like these, it’s usually a good idea to have a backup plan in place. Where will you go if things go south and how much it will cost you? Are you going to return to your original city, or are you going to be looking for a third option? No one likes to think about all this when they’re thinking positively, but thinking about it may actually liberate you and give you multiple options if things go bad.

Bottom Line

Relocating is a pricey endeavor in itself – the further you’re moving to the more money you’ll have to pay for it. But there are other financial impacts that you possibly haven’t considered and accounted for, which will affect the way you can live in another country/city. Preparing yourself for any scenario is always the best option when it comes to your finances and if you ask yourself the questions we mentioned in this article you’ll be sure to stay ahead of the curve.

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