Moving to another city is exhilarating, daunting and, often, much more expensive than you think it will be.
If you’re considering a move for work, you have a lot to consider — especially when negotiating your salary and, if applicable, your moving bonus.
But there are also some steps you can take to avoid the sticker shock of settling into a new home.
Costs of setting up
If you can get the company to pay for some or all of your moving costs, you will be in a much better financial situation once you settle in. That’s because once you’re in a home, you’ll still have to pay a lot of upfront cash for deposits.
“When we first moved to Virginia from Munich, I didn’t have enough cash on hand to cover all the initial deposits,” says Cara Sindir, who recently moved with her husband and two small children. “It’s important to remember that even if you do get some moving costs reimbursed, you probably won’t get that money until two weeks to a month until you’ve moved. Prepare for that.”
Some bills they had to pay immediately included deposits for utilities, setting up internet, the first and last month’s rent for their home, down payment for a car, car registration and activity fee costs for daycare.
That added up to thousands of dollars.
Sindir says when calculating the cost of moving, she grossly underestimated how much it would be, even though she has moved multiple times in her life.
With two children, she was much less flexible on neighborhoods because of the need for good schools and daycares as well as the condition of the home.
“When we looked online, the homes in the price range we wanted to pay looked much better than they did in person,” she says. “I’m glad we visited first and saw that before committing to a contract.”
You might want to ask the company if they offer corporate housing for a few weeks, so you can take your time to find a good place to live. And, Sindir says, if they have relocation services, definitely use them.
“We were lucky to have a service that would search for homes we could rent in neighborhoods that fit our needs,” she says. “It would have taken me forever to do that on my own.”
Calculating the salary difference
If you’re moving for work, it’s probably because you got a better salary, a better position, or a way to get your foot in the door to a new industry.
In any case, when calculating your living expenses and salary requirements you’ll want to consider more than just the difference in home prices.
“I moved from a state with no state income tax to one that had it,” says Phallan Davis, who moved from Houston to Washington D.C. for work a few years ago, before returning to Texas. “Don’t forget to look at what the rate might be when calculating your take-home pay.”
States also vary in income taxes, and some cities charge a tax as well. Look at the different rates for your salary to calculate accurately what you will be bringing home each month.
Other hidden costs that could chip away at your salary including health and auto insurance premiums, which could go up depending on where you’re moving, and property taxes if you plan to buy a home.
You also might end up having to pay much more in childcare than you’re used to, so compare costs by looking at the specific neighborhood and daycares you’re considering.
“When we did find a house that worked for us, it ended up being double what we planned,” says Sindir. “We had the same situation with childcare.”
If you’re moving to a major city, also calculate the cost of keeping your car. Shipping it, paying for parking and potential increases in car insurance are costs you’ll need to consider.
If there is good public transportation or you’ll live close to work, you might find using a car share service for the times you’ll need a ride a more affordable option than paying to keep a car.
Take the time to do it right
If you have the luxury of time, use it.
You might own a home in your current city, and selling it at the wrong time of year could cost you thousands of dollars.
Consider renting it out in the interim to avoid the financial loss, or ask your new company to provide subsidized or free housing until you’re able to sell your current home at a decent price.
If your job won’t provide corporate housing, you can test out neighborhoods through short-term rentals to avoid signing a contract you’ll regret.
“If you rush into a place, you may not be satisfied and you might waste money,” says Davis. “I moved from my first apartment a few months after I moved to the District. I only saw it online and it didn’t end up being the safest place.”
Some cities have free apartment finders – they earn their commission from the landlord – to help you scope out neighborhoods you’re considering before committing long-term.
lso, determine what you’ll need if you’re moving from a smaller place to a bigger one. Resist the urge to splurge on a bunch of new furniture to fill up the space. Start with what you have and you can slowly build up over time.
You don’t want to rack up credit card debt in all the excitement and then get your first paycheck, only to realize it’s not as much as you expected it to be.
The bottom line
By doing your research, calculating costs, save up for the initial deposits and finding the right place, you can avoid a lot of the financial stress of unanticipated moving expenses.
“The amount work is still ongoing,” Sindir says. “I’m still in waiting mode for the stress to ease off.
“There are still boxes to unpack.”
