Relocating for a new job can be both exciting and intimidating at the same time. It’s critical to consider the financial obligations that come with making the move. Depending on the location of your new job, you’ll have to account for changes in your living costs, daily spending, taxes, and additional expenses. Follow along as we highlight several financial tips to consider when relocating for a new job this spring.
RESEARCH THE COST OF LIVING
A crucial step in the relocation process is to research the cost of living in the new city/state you’re relocating to. It’s critical that you understand potential changes in your finances such as housing, transportation, entertainment, and even schooling. Depending on your current situation, certain expenses may change drastically in comparison.
To start, you can use online tools to compare your current costs to the new location and get a better idea of what to expect. If you have family members or friends that already reside in this new location, it’s best to pick their brains about specific expenses. If that’s not the case, communicate with locals or research online what to expect financially from this area. Perhaps one of your colleagues has relocated to this area, try connecting with them to gather important insight.
CREATE A BUDGET FOR YOUR EXPENSES
Moving for a job can be quite expensive so it’s crucial to create a budget for any expenses tied to the relocation process. Some of these costs include hiring professional movers, a moving truck rental, packing supplies, cleaning services, and in some cases moving insurance. Depending on how much you’re moving with, some of these expenses may vary. It’s important to be as financially prepared as possible.
It’s also best practice to set aside funds for unexpected expenses that may arise because of the relocation process. Don’t shy away from asking for some assistance from your employer. In some cases, your new employer may have a version of an employee relocation package available for you. If that’s the case, try to negotiate what would be the best fit for your circumstances. To maximize your move, see if they can reimburse your relocation expenses or transportation costs, or at least provide a signing bonus.
FIND THE RIGHT HOME FOR YOUR RELOCATION
Finding the right place to call home is one of the most important aspects of the relocation process. Depending on your projected tenure and budget you may be interested in buying a home as opposed to renting. If you choose this path it’s important to understand the steps to buying a house because it’s a large financial investment that can dictate your professional future. Making the right decision can seem daunting at first, but understanding how to find the right fit is possible and will make your move much less stressful.
When buying a home, three important things to consider are proximity, convenience, and flexibility. Proximity plays a major role in terms of not only the distance from your office, but more importantly the surrounding features – entertainment, groceries, and more. Convenience to amenities like a washer/dryer and furniture is another factor that can hinder or highlight your space. Flexibility is especially important because it provides confidence if you’re deciding on a short-term or long-term tenure.
MANAGE YOUR FINANCES DURING THE MOVE
Managing your finances in the middle of a move can be extremely stressful. During the transition period, it’s important to maintain your finances to the best of your ability. Some best practices include monitoring your budget, recognizing when you can save on everyday expenses, and identifying any new financial requirements.
If you don’t know where to start, hiring a financial advisor can help you maintain your finances during the move. In terms of your temporary budget, it differs from your overall budget because it focuses on additional expenses that arise during the moving process. Some of these expenses can include hiring a moving company, moving truck, any moving supplies and optimal storage space. Like any financial plan, you should focus on where you can save to get the most out of your budget.
CONSIDER POTENTIAL TAX DEDUCTIONS
Depending on your occupation and income, you may be able to utilize tax deductions for your move. Some of these deduction costs include relocating your household items, travel expenses, and potential storage usage. If you have a hard time getting a grasp on your potential tax deductions, talk to a tax professional. With their insight, you may be able to determine what you qualify for and how you can save money.
Relocating for a new job can create an array of positive emotions but comes with a variety of financial obligations. By understanding your current finances and organizing your projected budget, you can find the right place to reside when you move. You’re never alone when relocating, if you need financial assistance there are tools and resources out there to help. With proper planning and research, you can find confidence in your finances when making the move!
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