You or your significant other got a new job offer in another state — congratulations. Moving across state lines is an exciting adventure, but it can also have unexpected financial implications.
Before you commit, sketch out a budget that takes into account ongoing expenses and one-time set-up costs. Also consider other factors that can affect your bank account. It helps to ask the following questions.
[See: 8 Big Budgeting Blunders — and How to Fix Them.]
How much does housing cost? Whether you’ll be renting an apartment or buying a home, you’ll need a ballpark estimate of how much you’ll pay every month for housing. Remember that if you’re thinking of buying, higher home values also often mean higher property taxes. Housing costs are critical to determining what your standard of living will be in the new place.
Maybe you’ll decide the job opportunity or excitement of a trendy city make it worth downsizing from your spacious house to a shared apartment. Just go into the move knowing what trade-offs you may have to make.
[See: 10 Money Leaks to Shut Down Now.]
What will transportation cost? Transportation costs can vary widely depending on how you get to work and how long your commute is. Are you moving to an area with good public transportation? Even that can be expensive. Do your research and put a rough number on how much you’ll need to spend every month for bus or train fare.
If you’ll be driving, will you need to buy a car? If so, you’ll need to account for that big investment. Also consider the cost of gas, auto insurance, car registration fees and repairs. You can find online cost comparisons by state for all of these factors. Parking in some urban areas can take a big chunk out of your budget, too. Figure out whether you’ll need to pay extra to park at your apartment or your workplace and calculate those costs into your monthly budget.
How much are other factors that affect your cost of living? Food, entertainment and health care costs all go into your overall cost of living. And if you have kids, don’t forget about education expenses. The quality of public schools in a particular area may affect what part of town you want to live in and, therefore, the cost of your housing. Perhaps you’ll decide you want to enroll your children in private schools. That’s a substantial cost you’ll need to consider.
Think about other costs you might have forgotten. Will you need a different wardrobe for a different climate? Maybe you’ll be moving from a temperate locale where utility costs are low to a state where you have to run the heater for eight months out of the year. Or you’ll need to pay extra for insurance to cover the risk of floods or other natural disasters to your home. Calculate your monthly budget around those costs.
Travel is a budget component, too. Moving away from friends and family may drive you to spend extra to go back and visit them every year. On the other hand, moving to your dream climate may mean you feel less desperate for pricey beach getaways every February.
[See: 11 Expenses Destroying Your Budget.]
How is the job market? You may already have a job offer, but what happens once you’ve outgrown that job? Is the economy in your new state growing, and are there other employers you’d consider working for? You can read up on the job market in general and check job boards to get a feel for how many other opportunities you might want to contemplate in the future.
Also, of course, consider these questions for your spouse or significant other. If the pickings are slim for one or both of you, ask whether it’s worth uprooting yourselves for this one job.
What are the tax implications? Find out what the state and local tax structure is. Take a look at property taxes and sales taxes, which are sometimes higher in states that don’t tax income. Calculate your after-tax income before you accept a job there. You may need to negotiate a higher salary just to keep pace with your living expenses.
How do state employment laws differ? States have different laws about minimum wage and overtime, as well as required sick time, dependent benefits, labor protections and discrimination prohibitions. These could all affect your paycheck and your rights, so it’s good to know about them going in.
How much will moving cost? Ideally, you’ll have an employer who will foot the bill for your relocation. If not, figure out how much it will cost to sell your house or get out of your lease, move your belongings and vehicles, find new housing, and pay for food, gas and accommodations along the way. These all go into your one-time set-up costs.
If nothing else, you may be able to deduct some of your moving expenses. For more information, see IRS Publication 521, Moving Expenses.
What’s your backup plan? Of course, you hope that once you move, you’ll love your new home and want to stay for a while. But it always helps to have a plan B in case it doesn’t work out. Maybe your new job turns out to not be a good fit, or your family just can’t make the new location work. How much would it cost you to move back or to a third place you’d like to live? This may seem like a scary question, but it can be liberating to know you’ve considered basic what-if scenarios.
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8 Financial Questions to Ask Before Moving to Another State originally appeared on usnews.com
