Education, work or family can take you to places. Your reason to relocate could be any, but it is always stressful and expensive to move cities. Firstly, you have to make several decisions right from choosing the right neighborhood to choosing your wifi provider. Secondly, uprooting your life from a familiar place and moving lock, stock, and barrel to an unknown city can be unsettling. Besides, relocation costs are so high that it can impact your financial well-being.
However, you make your relocation process a smooth one by considering the following financial aspects.
Understand the financial impact of relocation
Moving to a new city is a big decision, and it is suggested to work out the numbers to understand if you can afford to move. You must consider expenses such as insurance and transportation costs in this calculation. It may help to check how much money you have to relocate and if there is a possibility to borrow. If you have to proceed with the latter, you may want to determine how much can you pay towards monthly repayments. If you are moving for work, you can check with your company if they provide any relocation expenses.
Research the housing costs
The housing costs are a significant monthly expense for any individual or family. It is a good idea to decide whether you want to lease a house or buy one in the new city. Depending on what you want to do, you can do some online research before you finally make the call. Every family has different needs. For instance, you will have to consider the neighborhood school and the safety of the locality if you have kids. If you are unmarried, a studio apartment could suffice to your needs. Thinking about these aspects in advance can give you more clarity about your expenses.
Decide what you want to take along
The more you pack, the higher will be your relocation expenses. If you have made up your mind to relocate, it may help to decide what you would like to take along. It would make sense to donate your extra clothing and home linen. You can also sell your couch and other furniture items if they are adding too much to your relocation costs. You can get a furnished house in the new city to make up for them. Another idea is to leave your extra stuff at a friend’s house and pick them up later.
Look for professional movers
Before you decide to work with professional movers, you may want to work out your relocation expenses. It will save you from any unpleasant surprises later. Take quotes from at least three to four professional movers to make an informed decision. It will also help to do your reference check to make the right choice.
Start packing early
It is perfectly alright if you want to move without any professional help. It could be because you do not have too much to take along or simply because professional movers are expensive. Start with a budget to get boxes, bubble wraps, etc. for packing. It will help to start packing as early as possible so that you are right there with your schedule. If possible, ask your friends if they can help you with packing. It will certainly save you a few hundred bucks. You may also check with them if they can lend you any spare boxes to reduce your costs. Plan early to see how much can fit in your car. For the rest, you can take quotes from multiple shipping services and go with what works the best for you.
Take the tax deduction
You are in for some good news if you are relocating for work. You can apply for a tax deduction and reduce your taxable income. However, there are certain requirements that you need to fulfill to become eligible for this tax deduction. Firstly, your new location should be at least 50 miles away from your current location. Secondly, you can apply for it only if your employer does not reimburse your relocation expenses. Lastly, these expenses must happen within a year of moving to the new city.