Moving to another state or even country for a job can be a big – and very expensive – hassle, but in today’s labor market many job seekers are willing to consider it.
In a 2009 survey conducted by staffing firm Manpower Inc. (MAN), 78% of respondents said they would relocate for work, and 41% said they were willing to do so permanently. More than a third indicated they would even move to another country.
Whether it’s an intra company transfer or a new career opportunity, moving is not only expensive — it’s a complicated financial decision.
Even if you are currently unemployed and just got a much-anticipated job offer, if it involves moving across state or even country lines, you should weigh your decision carefully. Aside from moving expenses, for example, you need to consider factors like the cost of living at your future locale compared to where you live now. What if the new job doesn’t work out? Would you have to move back — and who would cover those costs?
Below, our five-step guide to making this complicated career decision less taxing.
Evaluate Salary Value
Have you heard of the New York Dollar? It’s a term that translates what a dollar would be worth in super-expensive New York City compared to the rest of the country. Making that comparison makes sense for most parts of the United States. For instance, according to Bankrate.com’s cost of living comparison calculator, a salary of $50,000 in Richmond, Va., is equivalent to a salary of $43,443 in Des Moines, Iowa. If you moved from Richmond to Des Moines and kept your current salary, you would effectively be getting a 15% raise.
Since not everything that goes into a cost-of-living calculation applies to your situation, don’t just look at the general cost of living estimates. Look at the itemized list of expenses considered in the index. For instance, you may not care what an optometrist costs because you have vision insurance. Even the importance of energy costs can differ from person to person. For instance, if your apartment is solely the place where you sleep, rental costs are more important than electric bills.
You can also conduct a basic cost of living analysis via online research for all out-of-state job opportunities including:
- Real Estate Costs
- Food Costs
- Entertainment Costs
- Health and Fitness Costs
- Electricity Costs
- Commuting Costs
Try Out Your New Position Before the Big Move
If you own the home where you currently live, wait to sell it until you’ve worked in your new position for several months. You don’t want to pay for a mover and sell your home, only to find out you’d like to move back. While it may seem unnecessary to shell out rent money that could be going towards a new mortgage, it’s better than losing your old home and perhaps even purchasing a new one before making sure that your move will be permanent.
Visit Your Destination For a Trial Run
Desperation leads to rash decisions. Check out neighborhoods and negotiate a price on your rental home before your move. While you can research apartments online, you won’t be able to get a neighborhood feel without a visit. You should visit the city, do a trial commute to work and visit neighborhoods during the day and at night.
Ask Your Future Employer About a Relocation Allowance
Know what your employer will cover in the way of moving costs before you start spending money. Ask specific questions about moving and temporary housing allowances, as well as questions about how reimbursement is handled.
If the cost of the move will be covered by employer, for example, that is good news — but you still may have to pay taxes on the dollar value. And depending on how far you move, your employer may spend tens of thousands of dollars.
According to Worldwide ERC, an association for professionals who oversee or manage domestic and international employee transfers, the average cost to employers to relocate a new employee who owns a home was $66,610 in 2009; $17,877 for an employee who rents.
In addition to that, some employers offer employees a choice of different relocation packages, including arranging for and covering the shipment and storage of goods, airfare and corporate housing or, alternatively, a one-time lump sum payout that you can then use as you see fit towards moving expenses.
Possible questions include:
- How much will I be reimbursed for moving furniture?
- Will you cover my current mortgage payments until I sell my home?
- Do you offer a flat moving allowance rate?
Trim Moving Costs
If you’re not getting reimbursed by your company for the move, you’ll want to keep moving costs down. Here’s how:
- Get at least three quotes from movers.
- Do your own packing.
- Enlist the help of friends.
- Sell non-sentimental furniture if it costs more to move it than to replace it.
For more tips, read our story Moving on a Budget.
Moving for work can cause an instant increase or decrease in your standard of living. Before accepting a new position or job transfer, be sure to do your math.
Reyna Gobel is a freelance journalist who specializes in financial fitness. She is also the author of Graduation Debt: How To Manage Student Loans and Live Your Life.