Recently, I’ve had several clients all embark on out-of-state moves with their families. Moving is a really stressful life decision. The last thing you want to do when you tackle a move to a new city, or even a new state, is to add extra stress (financial or otherwise) to your life.
I’ve guided several clients through big, life-changing moves over the course of the years. So, to make things easier on you if you’re considering a move in the near future, I put together this quick list of rules to follow.
Rule #1: Don’t Buy a House
Many people who choose to move also choose to buy a house right away. I get the emotional drive to settle in, and start putting down roots straight away. The home buying process can be very emotional. There’s a lot of expectation and excitement tied to owning your own home – it’s a lifestyle choice that’s a good fit for some families.
However, buying a home when you’re making a big move to a new city or state isn’t always in your best interest. It’s tough to know what part of town you’ll prefer when you first relocate, and it can be risky to lock yourself into a mortgage before you know whether or not you even like your new home (or your new job). Instead, consider renting for a year.
You’ll get to know the different schools and neighborhoods, know more about where your friends and colleagues live, and more, after you’ve been in the area for a little while. Then, you’ll be able to make a better home buying decision that fits your new lifestyle.
Rule #2: Have a Budget For The Move
Moving is expensive. Before you decide to relocate, it’s important to know what costs you’re facing, and how they’re being paid for. A lot of companies chip in with a moving stipend, and some even cover all of your relocation costs. However, if you’re relocating for personal reasons and paying out-of-pocket, it’s going to be even more important for you to set a budget for your move.
Here are a few ways you can move within a budget:
- Shop around for different moving services
- Rope friends and family in to help you with packing, loading and unloading the truck, or even bringing over pre-made dinners to save you money on eating out
- Know the cost of living where you live – and where you’re moving to – so that you can adjust your monthly expenses budget accordingly pre-move
Rule #3: Be Smart With Cash Flow
Speaking of cost of living, remember to be smart with your cash flow. A lot of times a big move means relocating somewhere more financially comfortable for your family. Even if your new home is going to be significantly cheaper, make sure that you have a plan for the newly freed-up cash in your budget.
A few smart ways to use a surplus in your budget are:
- Put money aside for a post-move safety net in case there are unexpected expenses after you get settled in
- Pad your emergency savings
- Adjust contributions to your other goals – like debt repayment, or retirement/education savings
- Put the surplus toward a new goal – like buying a home in your new area (after you’ve made sure your emergency savings is adequately topped off)
The last thing you want to do after a move is to make a big financial decision because you have a cash surplus in your budget – and regret it when other expenses crop up. For example, let’s say you relocate to a lower cost of living area, and so you decide to spend a large portion of your nest egg on a down payment for a new house.
Your emergency savings is now drained, but you figure the surplus in your cash flow each month will help you to boost it back up. Then, a few unexpected expenses crop up with your new home – and you’re stuck without the savings to pay for them. Moving is already stressful enough as it is, you don’t want to put yourself in a situation where you’re strapped for cash in a new place.
Rule #4: Move Because You Want To
As someone who lives away from family, I can attest to the pressure that family and friends can put on you to move home. It’s not necessarily a bad thing – they love and miss you, and just want you to be closer to see you more often! Unfortunately, people often make a life-changing move because they’re feeling external pressure to do so. That pressure can come from family, friends, a spouse, or your job.
Moving is a big change for you and your family. You want your move to be a decision that’s working toward the life you want. If you move because you feel forced into it, you’re more likely to experience more stress and possibly make decisions you’ll regret. You might get into an argument with your spouse or partner, feel frustrated with your new job, or over-spend to try and make the transition feel better (even though it’s still not what you want).
Finally, make sure that you keep expectations for your move in check. Even if your move is exactly what you want, and it’s going to help you and your family continue building your dream life, it’s still going to be stressful. Getting used to a new place is going to be overwhelming. Being by family (even if that was the goal!) might still feel like a little bit much when you first arrive. Moving is never going to be fairytales and rainbows right off the bat. If you give yourself some time to adjust and have patience, you’re going to be better for it.
Have questions about a big move coming up? Wondering how to pull it off without busting your budget? Reach out! I’d love to walk you through a few steps you can take to make your financial life easier during this transition.