While moving to a new city is certainly exciting, it is an overwhelming experience with some trepidation. However, you can’t just pack your items into a moving truck and leave. Moving to a new city comes with several unexpected costs, which can strain your wallet. Before actualizing the move, you should ascertain that you are ready for the move. Budgeting and proper planning can make the moving process less challenging and prevents unexpected mishaps. Below are a few tips to reduce financial stress when relocating to a new city.
Table of Contents
1. Research the new city’s cost of living
You should begin by comparing the cost of living in the new city with where you currently live. You should focus on specific monthly expenditures, such as rent, utilities, and other recurrent monthly costs. This applies whether you intend to rent or buy a home in the new area. You should also evaluate any additional charges you’ll likely incur after moving.
As you prepare for the move, you should understand the basic structures of the new city. For instance, if you are moving from a city with robust public transit and bike trails to a place where car culture is established, expect your transportation costs to increase.
Another important factor is the rates of state and local taxes in your new city. You should check tax rates with specific reference to your potential taxable income, property, sales, and other local taxes that apply specifically to residents.
For instance, most states, such as Virginia, tax vehicles as properties annually. Residents of Virginia pay 5% of the vehicle’s value every year for owning the car. Knowing these factors helps prevent unpleasant surprises as you settle into your new city.
2. Budget appropriately
Budgeting is an important tool to help you understand and control your finances. Unfortunately, most people plan their moves blindly, ignoring the importance of having budget estimates. Your budget for the move should include the expenses involved during the move and what you’ll spend in your new home.
You should start by estimating how much it will cost to move your belongings to the new city. Generally, relocating to a new city within the state can cost up to $1000, while out-of-state moves are costly. While you can adopt various cost-saving practices, such as hiring a moving truck or packing yourself, expect to spend amounts in the four-figure for moves more than 1000 miles.
That aside, settling into a new house comes with other hidden expenses most people overlook. For instance, if you decide to purchase a home, mortgage and closing the deal comes with several charges. Similarly, if you are renting, you should part with the application fee, security deposit, and other expenses. You should also budget for utilities. These charges can strain your wallet.
3. Work directly with reputable moving companies
A big percentage of the moving costs goes directly into paying moving companies for their services. However, you can save the cost of moving by doing due diligence before working with a moving company. For starters, you should compare quotes from various moving companies. However, you shouldn’t compromise the quality of moving services by hiring companies that quote low rates.
You should also avoid negotiating with moving brokers who connect moving companies with potential clients. Most of these brokers don’t quote the real moving costs. Your best bet of hiring a reputable company after checking company reviews and recommendations. Don’t rely on online suggestions, as some malicious companies use fake reviews to promote their services.
4. Supplement your emergency fund
Saving money for emergencies, such as medical issues, car repairs, or living expenses before you find stable employment, relieves financial stress after moving. Generally, you should have enough money to sustain yourself for three to six months.
Unfortunately, accumulating emergency funds can prove challenging, especially if you have a few months to plan for the move. However, even with strict financial commitments, ensure that you remain consistent in contributing to emergency funds. Use the budget to determine the amount you can contribute monthly and automate transfers from your checking accounts.
5. Optimize your credit score
Your credit score is important whether you buy or rent property in a new city. Most landlords run credit checks before approving rental applications. Landlords also use credit scores to determine the security deposit. On the other hand, if you want to buy a home, lenders check your credit score before approving a mortgage. Therefore, you should focus on improving your credit score by:
- Not applying for new credits
- Making timely payments of debt
- Minimize credit utilization
The Bottom Line
Unfortunately, you can wing your way into a new city. You should prepare extensively, especially when it comes to finances. If you don’t have permanent employment in the new city yet, you should have enough cash to sustain you for the period. Actualizing the tips mentioned above can help alleviate financial stress after moving.