What to Know About Finances When Moving to a New City
Moving to a new city can be exciting. It is a chance to explore a different area. Although, it is essential to keep finances in mind. So, here is what to think about financially when you’re moving to a new city.
1. Research the Cost of Living
Before moving, it is important to know how much it costs to live within that city. This way, you’re prepared and have enough money saved up for everyday expenses. Research the average cost for housing, food, and utilities with the city.
Housing is a significant financial consideration for moving to a new place. Once you narrow down the area you want to live in, consider looking at local realtor sites. This can help you to get a more accurate price range.
Also, think about any new expenses you may accumulate. If your new city has fewer public transportation options, you may spend more money on gas. Researching state and local taxes is also a good idea. Look into income, sales, and property taxes. These may vary slightly from what you pay currently.
To help analyze costs between your current and new city, use online cost of living calculators. These sites use the cost of living index, comparing the average housing, transportation, and healthcare expenses among different geographic regions.
To get some local opinions about finances, check out local social media groups or visit the Chamber of Commerce’s website.
2. Create a Budget
A budget is important to keep your spending on track. It can help you figure out your required expenses and how much you need to save. When relocating, you want to create two separate budgets. There should be one for moving expenses and one for the expenses you will have in your new home.
The budget for your move will include costs associated with transferring your belongings and settling into your house. If you are traveling a further distance, you want to add the payment for a U-Haul into your budget.
You also want to be prepared to pay upfront fees that come with the home, such as the mortgage. If you’re renting, then you should be ready to pay the application fee and security deposit. You may also want to save up for rental insurance to protect your personal belongings.
When creating a budget, consider using automated payments to keep track of your spending. This can also help reduce the urge to overspend.
3. Add to Your Emergency Fund
Creating an emergency fund is essential when managing your money. It is also a significant financial consideration when moving. You want to prepare for any unexpected cost, such as a flat tire during your drive. Set aside around three to six months’ worth of your living expenses for the emergency fund.
4. Check if You Need to Change Your Banking
Keep in mind if you use a local bank, you may be charged ATM fees. Before moving, check with your bank to see what ATMs you can use free of charge, or they can refund you. If these options are not possible, consider looking into setting up a new bank account.
When it comes to choosing a new bank account, determine what services are important to you. Consider the types of accounts you need and if you use ATMs often. Then compare different banks in the area based on features such as interest rates and fees. Before making any final decisions, browse online reviews to get outside perspectives.
5. Optimize Your Credit Score
Whether you’re renting or buying a home, your credit score will come to play a role. This is why it is essential to have a good credit score. If you’re buying a home, your credit score impacts your mortgage interest rate. If you’re renting, your score influences your application approval and your deposit amount.
Paying your bills on time and lowering your credit utilization can help improve your credit score. Your credit utilization is the amount of available credit you’re using.
What to Think About Financially When Moving
When it comes to moving, there is so much to think about. Finances should be at the top of your list. To help you get started, follow these tips for a successful move.
About the Author
Ginger Abbot writes about learning, living, and exploring for college students and graduates. Read more of her work on Classrooms.com, where she serves as Editor.