With the housing market and overall economy starting to improve, more Americans are packing up and relocating. According to the U.S. Census Bureau, the number of people moving for a new job or transfer numbered 3.5 million in 2011-2012, up from 2.8 million the previous year.
Whether you’re planning to move for a new job or transfer, or you’re accompanying a spouse or partner who has accepted a new position, it’s important to consider how your new location will impact your bottom line.
Comparing Costs
There are many costs that can vary from one geographic location to the next. Depending on where you’re moving to, you may be in for a pleasant surprise or a financial shock. Here are some things to consider:
Housing
The cost of housing is a significant financial factor in your move. Relocating from a high-cost area like New York City to a lower-cost area like San Antonio might translate into several thousand dollars’ worth of annual savings on housing costs. Also, keep in mind that if you’re buying property, higher housing costs will most likely mean higher real estate taxes.
General Cost of Living
Aside from housing, will other items like groceries, transportation, utilities (e.g., heating/cooling, electricity, water, cable/phone/Internet), health care, and child care cost more or less in your new location?
State and Local Income Taxes
Seven states have no income tax—Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Other states have a variety of state and local income taxes. You can use an online paycheck calculator to get an estimate of what your net income will be in different states.
Bottom Line
will your new location cost more or less? If you haven’t already negotiated your new salary, you can investigate the salary you would need to earn at your new location to maintain your current standard of living. Many online job boards have cost-of-living comparison tools where you can compare the costs of different locations.
Other Considerations
You may also have other considerations that partly involve costs, for example:
Commuting Time
Will your new commute be longer than your current one? In addition to costing more, a longer commute will mean less time for you to spend at home or on personal endeavors.
Family and Friends
Will you be moving far away from family and/or friends? If so, there might be airfare and/or other travel costs in your future. Unfortunately, airfares at peak travel times like holidays and school vacations are typically the most expensive. You may also find yourself allocating more of your vacation time for visits with family.
Keeping Up with the Joneses
No one wants to admit this is even a factor, but you might be surprised at the subtle influence this dynamic can have on your bottom line. For example, does everyone in your new neighborhood drive a certain kind of car, hire professional landscapers, or send their children to camp all summer?
Your Spouse’s Job Prospects
Has your spouse/partner been able to find a job in your new location? If not, are there ample job opportunities for someone with his/her experience and skills?
Relocation Expenses
As for how you’ll pay for the move, some employers offer relocation packages that cover the costs associated with selling your house, hiring a moving company, transporting your belongings and vehicles, finding a new house, and paying for food, fuel, and lodging along the way. If not, you’ll be on the hook. But you may be able to deduct some of your moving expenses; for more information, see IRS Publication 521, Moving Expenses.
If you have questions or need assistance, contact the Experts at Henssler Financial: experts@henssler.com or 770-429-9166.
Disclosures
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
