How to Financially Plan Before You Move to a New Place

Moving from one place to another is a part of life, be it due to job or education. Even if you have to move to a new place within your city, this is a hectic activity and can be financially straining. Indeed, your finances matter when moving. Therefore, understanding the costs upfront helps avoiding ‘surprises’ along the way.

Moving to a new place

While some costs may be very clear to you while you are pondering over your move to your new home, some are not so obvious. The rent is one of the clearest expense you will have, but there are others too. If your calculations are not right, you might end up regretting your decision to switch places.

That being said, it can be easy to note down the different financial impacts of moving into a new place. If you are deciding on moving, you are in luck as we have listed down a few of the most important things to consider.

Clear Your Dues

While moving and relocating does mean expenses, never forget that you might have some incurred ones that need to be taken care of BEFORE you move. Look up on your debts. And by that we mean anything that needs to be paid off. Bills, credit card statements, loans – everything. Try to pay off or cut down on these.

Moving can be financially straining and already having debts will only add to your burden. Perhaps relocating will not have an impact on your ability to pay off your debts, but it can still pull you back significantly. For example, if your credit card is already used to a higher level, you don’t want to be caught off guard in a new place only to find the card is maxed out.

The best option would be to either pay off your debts as much as you can. Alternatively, if you have the cushion, you can pay off the ones with the highest interest rate (or at least aim for paying off a major chunk, if not completely).

Relocation Expenses

While you may have factored in the rent of the new place, the cost of actual relocation might not. Some of the most important ones to consider are:

  • Real Estate Hunting: The time and money you will spend on finding a suitable place to live. This can take days and the more time you spend, the more money you will burn.
  • Agent’s Commission: A real estate agency is the best way to find out a place to live as they are aware of available accommodations in their area. This can be a big expense, depending on the amount of commission the agency or agent will charge.
  • Packing and Moving: Over time you will have collected a lot of stuff, some essentials, some not. TV, furniture, clothes etc. These will have to go with you to the new place and this means renting out professional movers. You can cut down on this expense by getting rid of stuff that you don’t need or selling them. Though the money you recover might not cover the cost of buying stuff for the new place, sometimes it will be cheaper to take all along.

Moving house

Before Moving In

Remember, the new place might be new for you, but it will not essentially be “new”. While hunting for a place to live, check in details all the maintenance required. Washroom fixtures, utensils, electrical systems and general cleaning can be required and though the owner is responsible, you might end up paying these by yourself if you need to shift in time or the landlord is delaying it.

At the same time, don’t forget to discuss with the landlord on any utility bills that need to be cleared by his/her side. You might end up paying for electricity used by the previous tenant.

Look at other essentials too:

  • Food: What are your options in the locality? Are they expensive? What about home delivery?
  • Office Commute: How far is the place from your office? Is there a public transport options such as bus or train? Will you be using your own vehicle?
  • Home Essentials: Cable and internet have become an integral part of our lives. Who are the service providers and what do they charge?
  • Banking: Does your bank have a branch in your area? If not, you will need to set up a new account. What are their specifics and charges?

Post Relocation

Now that you have figured out all the expenses you will incur during shifting and to live in that place, you must also factor in other expenses that you might not foresee during the first few months, but will have a major impact later on.

Taxes, for example, will not bother you till the end of the financial year. The new place may be in a high tax area. Alternatively, if you are moving to a new job or position that carries a higher pay, you could be shifted into the next tax bracket and when the tax man cometh, you just might end up paying more than you expected.

The Final Planning

Make a budget with all these expenses (and any other you might foresee). Break these down into monthly of biweekly timelines and compare it with your income.

If you still see some money left over after all the costs, congratulations, you can easily now decide to move to the new place you are seeking!

Shares

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.