Relocating can be a thrilling yet nerve-wracking experience. Depending on your motive to move, it can either be the dawn of a riveting new chapter or merely a transition. Your relocation might be driven by a career change, the pursuit of fresh opportunities or any number of other reasons, but it can bring significant improvements to your life.
Starting the moving journey often brings its own challenges, as the expenses of packing up and shifting your belongings can appear daunting. The initial costs of hiring movers and readying your home for relocation might seem hefty, but the subsequent financial perks of relocating may astonish you.
If you’re contemplating a move and assessing the expenses or potential advantages – given that it’s not obligatory – mull over these five different ways how relocation could enhance your financial situation:
1. IMPACT ON LIVING EXPENSES
The variance in living costs between New York City and Tulsa involves more than just geographical differences. Certain locations in the United States and globally are pricier than others, for instance, hiring a moving service in Los Angeles could be considerably cheaper than doing so in New York City.
City attraction, geographical characteristics and frequently the cultural, entertainment and employment opportunities can dictate its cost of living. Generally, living in high-cost cities would mean higher expenses – from housing to transportation and daily items like food.
However, in these cities, you’re also likely to earn more and therefore have greater purchasing power. Your finances could enhance significantly depending on whether you opt for a high-income, high-cost city or a low-cost city. Make sure to balance your income against all aspects of living expenses to determine if you will truly be financially better off.
2. STATE TAXES
Yes, taxes are unavoidable, regardless of where you reside. But did you know taxes vary state by state?
For instance, Massachusetts, Utah, Indiana, or Colorado impose a flat rate income tax on all residents. However, if you move to Wyoming, Washington, Florida and some others, you could escape state income tax.
Changing location can indeed, modify the structure and quantity of your taxation. In a few cases, you might even end up paying less. Since taxes take a sizable portion of your income, a move to a state with lower taxes can boost your net income.
3. HOUSING EXPENSES
What costs $500,000 for a home in Wichita, KS, can easily shoot up to a million dollars in a city like Denver, CO. Housing costs can fluctuate dramatically from state to state.
Ideally, rent should not exceed 20 to 25% of your monthly net income. But in expensive cities, this percentage could go substantially high. Moving to a less pricey city or even to the outer suburbs could reduce your housing expenses, thus positively affecting your financial health in the long run.
4. TRANSPORT COSTS
Owning a car can be a costly affair, especially in certain cities where living without personal transport is virtually impossible. Car expenses extend beyond just fuel. Maintenance, repairs, insurance – all drain your earnings more than you may realize.
Relocating to a city with efficient public transport that is widely used can significantly cut down these substantial car-related expenses. Besides, having to commute less to work could save on fuel and vehicle wear and tear, making your traveling costs lighter.
5. JOB PROSPECTS
Job availability varies from city to city. Some are teeming with job openings while others have scarce opportunities. Living in a city with limited available jobs could impact your career growth and financial stability in the long haul.
Moving to a city buzzing with job chances or where the minimum wage is substantial, could increase your earnings. Further, it could place you in a more secure financial position for the future.
IN CONCLUSION
Factoring in the expenses for items like boxes, movers, the truck and the relocation itself, your relocation might not seem cheap. That said, even neighboring cities can drastically differ in terms of cost of living, housing market, tax rates and employment rates.
A small shift can significantly alter your financial landscape. Although relocating can be daunting – given our inherent fear of the unpredictable – being open to new places and opportunities might not only boost your lifestyle but also your financial well-being.
Have you ever thought about moving for a job? Are there any experiences you can share regarding higher or lower cost of living in different cities?
