Last year, 12% of Americans packed up their belongings and moved to a different home, according to the U.S. Census Bureau. That’s up from the record low of 11.6% in 2011, but people have generally moved less frequently since the Census Bureau started keeping track in 1947, when the rate was 20.2%.
Regardless of how many Americans move in a given year, each one has to consider the costs associated with such a change. Whether it’s a trek across town (people most often move within the same county) or driving a few states over to a new home, there are a lot of expenses people should factor into their decisions to move.
1. The Cost of the Physical Move
Maybe money is the driving factor of the move, like a new job or choosing a more affordable dwelling. But before you start budgeting with the new money situation, consider the first stage of the move: the trip.
Weigh the costs of hiring movers, renting a moving truck, shipping belongings or enlisting the help of friends. Don’t forget about protecting your possessions, either.
Jane Young, a certified financial planner and contributor to Credit.com, said to make sure movers have the proper insurance so you don’t incur the cost of damaged belongings. On the topic of insurance, make sure there’s no gap in coverage if any of your policies are changing.
There’s more than the moving truck, too: How much will gas or plane tickets cost? A long trip may mean spending more money on food. Are you taking time off for the move? Make sure you account for any change in income.
2. Finding a Home
Housing has been the most common reason people move since 1999, but if finding a new home isn’t the main reason for relocating, it’s still a massive part of the process.
Say you’re moving to a new state for a job or to be closer to family: Even if you know you want to own a home, it may be best to rent first, to be sure you like the area. Young recommends visiting the new location, if possible, to be certain it’s a fit.
“Rent first rather than going in and buying a house,” she said. “Get to know the neighborhoods, get a feel for a new community.”
She also warned against getting caught up in two mortgages and suggested either selling ahead of the move or waiting to buy in the new location until someone purchases the previous home.
Once you have that new home, don’t forget to budget for unexpected fix-ups or adding security features. Bills are likely to differ from home to home, as well.
Everyone should have an emergency fund, but it’s crucial for the mover. The reason for an emergency fund is situational: Perhaps you’re moving before you’ve lined up a new job, or you’re moving to a place known for severe weather. It may also take a while to perfect a new budget, so having savings to cover unexpected costs will come in handy.
Planning is the key, so if you know you want to move, start saving. Young recommends saving at least three months in advance, but six would be best. Not everyone has the luxury of planning, because life changes can happen suddenly, which is more of a reason for everyone to build an emergency fund.
4. Start-Up Costs
The farther the move, the more services you’ll need to restart. You may find yourself needing to change everything: power, water, gas, cable, gym membership, parking permit, license plate, driver’s license — it can be a long list.
There are also the things that don’t cost money but take up a lot of time. You have to change your address for a slew of organizations, starting with your financial accounts and the postal service. Changing banks might be necessary if you’ve used a local or regional institution. You’ll want to make sure the credit bureaus have your proper address, and don’t forget about subscriptions and voter registration.
5. Cost of Living
This is the catch-all. Imagine your life in a new place: Will you travel far to work? You need to know how much gas or public transportation will cost. Are you satisfied with the school district? If not, opting for private school can be costly. Your take-home money will change, too, because states and counties have different taxes. There are a lot of nifty tools online to help you anticipate cost changes. Whynotmove.org helps calculate tax differences between states, for example.
Many cost-of-living questions can be answered through a good Internet search, and it always helps to know people in the area who can tell you what to expect.
“So much of what I do is done through people I know. It’s really important for people to establish new networks,” Young said. “It’s really good to establish some networks where they can get some good, dependable information.”
Above all, planning and research will make the transition work best for your finances, Young said.